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?


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. 

The Dennis Principle

Cover of "How to Get Rich: One of the Wor...

Cover via Amazon

In 1969, Laurence Peter and Raymond Hull wrote the book, The Peter Principle and since then the observation that every employee tends to rise to his or her level incompetence has been synonymous with the title of their book.

The idea is that folks tend to perform competently at some levels and then are rewarded with promotion until they eventually reach a level where they are no longer competent.

If only that were true.  In my experience, competence is not what is rewarded with promotion.

I think Felix Dennis describes the scene more accurately in How to Get Rich, when he discusses delegation (p. 186):

It used to be surprising to me why so many people appeared to have a problem with delegating.  But I finally figured it out, and the answer isn’t a pretty one.  It concerns our old bugaboo, ownership.

If you own a company and that company’s purpose is to make you wealthy, you will be content, delighted even, for any amount of glory to go to anyone who works there, providing you get the money.  It is in your best interests to delegate whenever it makes sense in such circumstances.

If you do not own the company, or any part of it, then it is possible you are only a senior manager because you like power. It is not true of everyone, of course. But often enough. You like bossing people about.  You enjoy telling them what to do.  If that is the case, then you might be understandably reluctant to delegate real power or opportunity, in case the person you delegate to proceeds to excel. This, in turn, may well demonstrate to the rest of the company what a ho-hum manager you really are.

This is a warped way of thinking. But I am convinced it lies behind much of the reluctance to delegate I have encountered in my business life.  I used to be surprised at this reluctance of others, both in and out of my own companies.  Now I’m not surprised at all.

Bossy people and glory hounds are mostly interested in building a power base so they can have yet more people to boss about. It’s pitiful and a little sad, but we have all seen it.  We saw it in school. We saw it in the playground.  We saw it in college. And we saw it in our first job. If you are observant, you have been seeing it nearly all your life.

This type of managerial toad will often talk about training and delegation in sepulchral tones, but then, as the old proverb tells us, “the Devil can quote scripture for his own purpose.”

You can’t deal with bossy, puffed-up sods who won’t train you and won’t delegate.  You can only move departments or change your place of work.  It isn’t worth the time to do anything else.

Based on my experience, such folks tend to reward inputs (did you do it the way I said to do it?) instead of outputs (was it successful ?).  They somehow manage to assume credit for successes (which they then don’t easily share) and masterfully distance themselves from failures. They are expert horn tooters.

I’ve often scratched my head at the behavior.  It seems counterproductive.  But silly me, I viewed it from the owners perspective for some reason.  As Dennis lays it out, it makes perfect sense.

What’s really sad to me is that this is the type of leadership that has been taught to us since we were young.  I often struggled when myself or my friends attended leadership development camps or training.

My intuition told me that even the leaders of the camps didn’t really have a grasp on true leadership.  What they discussed was more of the bossy/glory hound leadership — how to stand tall and speak with authority and how to make yourself look busy, even when you don’t know what you’re doing.  It’s about managing up and improving your image.

I’ll add my own observation to Dennis’.  These types of leaders tend to gravitate to organizations that are already successful.  They say things like, “we are professional managers that will take over where the founders left off” and “we can take the business to the next level”.

In reality, it’s the organization’s prior success that allows it entertain such leadership for awhile.

I prefer Dennis’ style of leadership.

Pay for performance in education

Today the Wall Street Journal reports that School ‘Bonus’ Plan Comes Up Short.

In short, $57 million has been spent in a school bonus plan in New York City Public Schools since 2007 to see whether it could improve test scores.  It didn’t.

As pointed out in the article, part of the problem might be with the bonus plan design.  Generally, the bonuses were not paid to top-performing teachers.  Rather the bonuses were pooled at the school level based on test scores and distributed evenly.  That might be part of the problem.

Personally, I don’t expect much test score improvement from such pay-for-performance attempts for two reasons.

First, I don’t think test scores are a good measure on which to base performance.  There are too many variables that impact test scores when averaged at a teacher or school level.

I don’t choose new restaurants based on test scores, nor do I choose which school to send my kid to based on test scores.   I generally choose both based on reputation and recommendations of my friends and family.

The better measure of performance is the percentage of parents who would recommend the teacher to other parents and/or the number of parents who request a specific teacher.

In a world with a competitive education market, the teachers who garner high recommendations/requests from parents are rainmakers for the school.  Administrators would generally hire, retain and pay teachers who bring in students.  This would act as a buffer against the politics and arbitrary decision-making they currently fear from their administrators.  There would be no need for the faux and limited-dimensional accountability system that branches up to the highest levels of government.

Second, I don’t think pay-for-performance operates in the manner many people think it should.

Generally, when I hear pay-for-performance discussed, it seems people believe that it is supposed to improve the performance of the existing teacher population.  They seem to think it will make bad teachers mediocre and mediocre teachers better.

But, that’s not how pay-for-performance can improve education quality.  It improves education quality by attracting better and more talented teachers.

If you put me on an NBA team, do you think paying me more to produce better results will cause me to produce better results?  Probably not much.  The NBA pay-for-performance works because it attracts people with immensely greater basketball skills than most.

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.