JALJA

Seth Godin on fire drills:

An organization that’s run on emergencies and reaction to incoming doesn’t know what to do when there are no problems.

Instead of seeking out new ways to delight, they run around looking for new emergencies, and if they look hard enough, of course they’ll find them.

(Two reasons for this: emergencies concentrate the mind and allow things to get done, and history).

I’ve worked in my share of fire drill factories, which is why I like Seth G.’s thoughts here.

I once coined a code word for fire drills: JALJA. It stands for Jumping Around Like Jack-Asses, which is what a lot of folks do when fire drills come along.

It’s pronounced J-owl-j-uh.

It was a part the lexicon at work for awhile. Even my bosses would use it. They’d call me into their office and say:

Seth (me, not Seth G), looks like we have another JALJA coming our way. Do you have plans tonight?

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A happy, former Walmart employee

You don’t often hear this side of the Walmart story (H/T Carpe Diem). Here are a few of the things this former Walmart employee had to say:

I worked hard and came back during a break from college to be promoted to work in the photo lab (more responsibility, higher rate of pay). I also saw many full-time employees that I worked with move up to become department managers, assistant store managers, and even move on to the corporate office.

Every evening I would go to a meeting with the store manager, who would tell us the stock price, how much we had sold that day, and if there were other expectations before we left for the night.

I also saw the opposite end of the spectrum. Some fellow associates seemed content to do the bare minimum and didn’t go anywhere in the company because of it. In fact, they are still at the same level.

In my opinion, these are also the employees that you hear speaking negatively of Walmart’s employment practices. They want something for nothing from the company and they aren’t getting it.

Your Mom was right: It pays to practice

I recommend reading Geoff Colvin’s book, Talent is Overrated: What Really Separates World Class Performers from Everybody Else.  I found Colvin’s storytelling interesting and the information well-presented.

Cover of "Talent Is Overrated: What Reall...

The longest book I've read on my iPhone, so far (Cover via Amazon)

It seems to be similar to Malcolm Glidwell’s Outliers, which I have yet to read.  Like Gladwell (I think), Colvin concludes that deliberate practice (and lots of it) is the key.  Which means, that what really separates world class performers and everybody else is their ability to find and persevere through deliberate practice.

Several of Colvin’s stories gelled with observations from my own experience, on page 44 (of my edition) he discusses studies done on expert race horse handicappers.

…IQ just didn’t seem to matter.  “Low-IQ experts always used more complex models than high-IQ nonexperts,” the researchers found.  Not only did handicapping expertise fail to correlate with IQ, it didn’t even correlate with performance on the arithmetic subtest of the IQ test.

The researchers’ conclusion: Their results suggest “that whatever it is that an IQ test measures, it is not the ability to engage in cognitively complex forms of multi-variate reasoning.”

That last phrase is not one that most of us use very often, but it’s actually a very good description of what most of us do every day in our working lives, and what the best performers do extremely well.  You just don’t have to be especially “smart,” as traditionally defined, to do it.

I’ve seen this over and over again.  “Smart” people (as determined by school grades and IQ tests) who struggle in the real world as they try to fit it into the supposedly “complex” (but surprisingly simple, once you get past the jargon) models they learned in school and they’re often outwitted by folks that have more contextual experience giving them a much better feel for the dynamics of the situation.

In other words, the “smart” person probably wouldn’t think to consider to factor in details of the horse’s latest bathroom break when handicapping the race, while the expert handicapper probably does that without even realizing it.

I do have one point of contention to offer Colvin.  Later in the book, he explains that folks are taking longer to make significant contributions to their fields.  For example, in 1900 a study of innovators found that people began making contributions to their field at around age 23.  By 1999 that age increased to 31.

Colvin attributes this to having more material for these folks to have to master.

I think there’s another factor, that is a key part of Colvin’s book, but he fails to relate here — the amount of deliberate practice these folks have had.

My guess is that in 1900, folks found their fields at a younger age and were able to spend more time in deliberate practice in those fields, because they didn’t have as many other subject requirements in their education distracting their attention.

My guess is that I could have done without about half or more of the liberal arts education that I was required to take to earn my engineering degree and I wouldn’t have missed a beat.

Had I spent more time while I was studying to become an engineer, doing actual engineering work (as an apprentice or intern), I may have discovered several years sooner that engineering didn’t hold my interest.  I could have spent those years getting an earlier start on my other interests instead.

Is the value proposition back at Walmart?

Yesterday I was looking for two relatively common things to buy for Christmas presents.

Target:  Strike 1

Best Buy:  Strike 2

Walmart:  Homerun.  They had plenty of both in stock.

I may have to rethink the reasons why I went to Target and Best Buy first.  Having things that people want to buy in stock is a key value proposition for a retailer.

Many believe that Walmart’s key to success was low prices.  That was part of it.

But, prior to the 00’s, they had a more complex value proposition than that.  They also happened to have what people wanted in stock more of the time than their competitors (good supply chain management), they had good customer service (good people management) and a no-questions-asked return policy.

Somewhere in the early 00’s, their focus seemed to go to low prices alone.

Customer service declined.  Staff became grumpy and phantom.  One reason I didn’t go to Walmart first is the memories from the early 00’s of going there to buy a couple things and having to wait in 30 minute long lines to checkout because they managed cashier wage expense tightly to keep prices down.

This decline in Walmart’s value proposition opened the door for competitors like Target and Kohl’s and gave a lifeline to Kmart.

Not only did Walmart have plenty of what I needed yesterday, but when I went to check out there was a helpful cashier, without a line, smiling and waiting for me.

The Performance Appraisal Myth

Each year, HR departments do their duty and administer the performance appraisal process.  Most folks seem to detest it.

There are good reasons for that.

If you work for company that does not do a good job of training and developing its people*, the performance appraisal process functions about as effectively as a New Years resolution treadmill.  It doesn’t.  It collects dust for a year, then there’s a flurry of activity for a short period and it’s forgotten again for another year.

If you work for a company or boss that does a good job of training and developing  people**, then the performance appraisal process is superfluous.  Good performance feedback occurs regularly.  These are like the fitness people who don’t need a New Years resolution to encourage them to stay in shape.  They have established the behavior and priority to exercise and these companies maintain the the behavior and priority for associate development. So, performance appraisal process becomes one of housekeeping and documentation.

Here’s how to tell which type of company you work for:

*In good economies, other companies tend not to recruit heavily from these companies and the folks who do leave, usually do so out of frustration.

**In good times, other companies actively recruit from your workforce and there’s usually a good number of people who leave through these opportunities, which opens doors for others to advance and replace them.

So, make a point in your next interview to ask your potential new boss whether the company’s talent is recruited away or if they leave on their own accord.  That can tell you a lot about what you may be getting into.

Buffett’s Business Leadership

While I’m not a big fan of Warren Buffett’s thoughts on government and social policy, I do admire his business savvy.  His results are tough to argue with.

Here’s Buffett’s leadership styles in one simple paragraph from the latest Berkshire Hathaway Letter to Shareholders:

At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years (it’s reproduced on pages 104-105) and call me when they wish. And their wishes do differ: There are managers to whom I have not talked in the last year, while there is one with whom I talk almost daily. Our trust is in people rather than process. A “hire well, manage little” code suits both them and me.

He doesn’t seem all too interested in hiring for a specific set of credentials – other than business management ability:

Berkshire’s CEOs come in many forms. Some have MBAs; others never finished college. Some use budgets and are by-the-book types; others operate by the seat of their pants. Our team resembles a baseball squad composed of all-stars having vastly different batting styles. Changes in our line-up are seldom required.

And he relies strongly on the incentives of ownership:

…the directors who represent you think and act like owners. They receive token compensation: no options, no restricted stock and, for that matter, virtually no cash. We do not provide them directors and officers liability insurance, a given at almost every other large public company. If they mess up with your money, they will lose their money as well. Leaving my holdings aside, directors and their families own Berkshire shares worth more than $3 billion. Our directors, therefore, monitor Berkshire’s actions and results with keen interest and an owner’s eye. You and I are lucky to have them as stewards.

This same owner-orientation prevails among our managers. In many cases, these are people who have sought out Berkshire as an acquirer for a business that they and their families have long owned. They came to us with an owner’s mindset, and we provide an environment that encourages them to retain it. Having managers who love their businesses is no small advantage.

Cultures self-propagate. Winston Churchill once said, “You shape your houses and then they shape you.” That wisdom applies to businesses as well. Bureaucratic procedures beget more bureaucracy, and imperial corporate palaces induce imperious behavior. (As one wag put it, “You know you’re no longer CEO when you get in the back seat of your car and it doesn’t move.”) At Berkshire’s “World Headquarters” our annual rent is $270,212. Moreover, the home-office investment in furniture, art, Coke dispenser, lunch room, high-tech equipment – you name it – totals $301,363. As long as Charlie and I treat your money as if it were our own, Berkshire’s managers are likely to be careful with it as well.

Grade Redistribution Part II

I read Robin Hanson’s post on his grade redistribution video, which can be found here.

Here are some of his observations from his post, which I agree with:

  • Ask random colleges student random policy questions and they will feel compelled to come up with opinions.
  • Ask them for reasons for those opinions and they’ll feel compelled to come up with such reasons.
  • Such opinions strongly tend to support the status quo – mostly whatever is, is assumed good.
  • There is only a weak added tendency for students to offer similar opinions and reasons on similar policy questions. Opinions and reasons are not being generated by processes that tend to produce much added similarity.
  • Students are mostly satisfied to grasp at any plausibly policy-relevant difference to justify treating things differently, even when such differences don’t obviously “make a difference” to the issue at hand.

I would expand the first and second to include most people, not just random students.  It is very rare that I hear someone say something like, I’m not sure.  I don’t really have a well-formed opinion on that.  Or, I haven’t given that much thought. Or even, I really don’t have any interest in that.

We seem to speak first and reason later.  We tend to speak from our gut and then back into the reasoning we need to support that gut reaction.  And often our gut instinct, per Hanson’s third bullet, is the status quo.

As a real world example, I see this in performance evaluations in organizations.  Often the evaluation is predetermined from gut instinct and personal preferences by the higher ups in the organization and then they back into the reasoning to justify their gut instinct.

It’s not hard to do.  Over the course of the year, everyone has enough successes and failures, so it’s usually easy to use confirmation bias to back into whatever reasoning is necessary.

You think someone is great?  Well, let’s remember all the good stuff she did and sweep some of her foul-ups under the rug.  After all, there were external circumstances that contributed to those foul-ups.  We can’t blame her for that.

This guy though, (he rubs me the wrong way), he doesn’t deserve a very high rating.  He fouled up here and here. 

The immediate boss might push back: But, those were essentially the same foul-ups as the woman you rated as great. 

Yes, but he could have done something about it. 

The immediate boss again: But, he had some great successes too.

Well, there were external circumstances that contributed to those successes.  We can’t give him full credit for those.