“The Geek Way,” by Andrew McAfee

On this EconTalk podcast, Andrew McAfee discusses his book The Greek Way, which is about four cultural norms of highly innovative companies.

After listening the podcast, I bought the book and read it. I highly recommend it.

Here are the four cultural norms with a brief explanation.

Speed of iteration — Geek way companies try things at a frenetic pace, constantly learning from their trials and failures.

I call this an iterative, trial-and-error process.

I personally believe most of our lives fall into this type of process, but we don’t recognize it. Getting a job is an iterative, trial-and-error process. You write a resume, apply, network, interview and you don’t expect 100% success rate. Each iteration you tweak things along the way based on what you learn from each failure.

Dating is the same. Learning to walk and talk. School work, to a degree. You try a homework problem, see what you got right and wrong and keep iterating until you can do it right.

Ownership — In Geek Way companies, people are encouraged not only to have ideas but to take the initiative to try to prove them out, rather than just throw them over the wall to an innovation group or slot them through a bureaucratic review process that arbitrarily decides which things to try.

Science — How does your company settle disagreements? Geek Way companies prefer trying things over other methods, like Highest Paid Person’s Opinion.

Openness — In Geek Way companies, it’s safe to have and air opinions that are different from leadership.

I agree with these and highly recommend the book for anyone interested in innovation.

I lived a good A/B/A test of seeing a company — by accident — go from a typical large company bureaucracy with anemic innovation, to a Geek Way culture back to bureaucracy and anemic results.

During the Geek Way, it was fun, folks across the organization pitched in on things that weren’t necessarily on list of strategic initiatives, we iterated toward successes that are still in use in that company today, learned from failures and hit one big home run.

I can attest that it works.

I can also attest that it’s really difficult for bureaucrats to buy into it.

I do have a few nits of the book, two of which I will mention here and will save more for future posts.

McAfee calls it the Geek Way because this culture is common in tech companies, which are commonly founded by geeks. In some parts of the book it seems like he thinks this culture originated in turn of the century Silicon Valley due to certain factors, like the ability to quickly alter software code to iterate.

I think the Geek Way is common early on in successful startups dating way back. He even provides plenty of examples. It wasn’t clear to me whether he realized this or not.

Second, McAfee offers surveys for folks to rate their organizations on each of the norms.

If I gave those surveys to folks in bureaucratic cultures, I believe many would rate their company high.

“But we already do that,” is the most common objection I encounter when I pitch this culture. I believe that’s because they have no point of comparison.

For example, at the end of the speed of iteration chapter, a survey statement is how much do you agree with: “We have a short cycle time for delivering something?”

Many people I’ve worked with in bureaucratic organizations will strongly agree with this statement. When a project fails to be a commercial success, they even often cite as as success that we at least showed we could get something to market quickly.

Except that usually took 9 months to a year.

I’d re-write the statement from “we have a short cycle time for delivering something,” to “the typical cycle time from initial idea to initially getting it front of real customers in the marketplace is days or weeks instead of months or years.”

This gives them something to compare to.

People ingrained in bureaucracies would be more likely to strongly disagree with that statement.

Though, they would also try to tell you why that’s dumb. “We would not want to do it that quickly! That wouldn’t give us enough time to make sure the product is refined to our high standards.” Or, “There’s no way we can do it that fast and not risk big legal issues if something goes wrong.”

That they can’t imagine ways to overcome these objections and achieve such quick cycle times is part of why bureaucracies persist.

It doesn’t dawn on them that other companies, like Geek Way companies, have figured out how to overcome these and that might be part of the reason they do well.

The Croods

I finally got around to watching The Croods with the family last night. I enjoyed it.

This animated feature follows a caveman family that has survived until now by fearing everything, including new ideas, as they encounter someone who has survived by using his brain to adapt to the world around him. Good timing, because the world is changing (earthquakes and volcanoes) and what has kept the Croods alive up until now doesn’t work any more. The new guy, Guy, helps them survive as the world changes around them.

In one scene, Guy introduces the Croods to fire. They are dumbfounded. What is it? Is a part of the Sun? Does it talk?

Guy tells them that he makes it, so the father, Grug, picks him up and tries to squeeze more out of him and injures him in the process. That was a clear case of mistaken cause and effect.

What I thought was funny about this scene is that reminded me of new managers, business consultants and politicians. They come into a business or elected office with the attitude that they know best and what has worked for them in the past will work for them here, not realizing that what has worked for them in the past was luck.

They create a plan forward to solve problems they have diagnosed, not realizing that what they believe to be the causes of the problems is based on their mistaken cause and effect.

They then seem bewildered when their solutions have the same effect as Grug trying to squeeze fire out of Guy’s body. Not only does it not work, but it ends up damaging the very thing that can help.

Leadership

Thanks to my brother for sending me the link to Ken Robinson on the Principles of Creative Leadership on the Fast Company website.  The best piece of it:

The role of a creative leader is not to have all the ideas; it’s to create a culture where everyone can have ideas and feel that they’re valued. So it’s much more about creating climates. I think it’s a big shift for a lot of people.

I found the rest of the article somewhat vague.  But I agree with this paragraph.  Leaders of many organizations — government, companies, non-profits, clubs, charity events, etc. — could benefit from learning this.

Leaders often mistakenly believe their role is to come up with the new ideas to move their organization forward.  They believe they need to chart a course.  The followers don’t help, they also often believe this.  It’s tempting to try to be the hero and to expect leaders to try to be heroes.

But it is also ineffective and risky.  Certainly, it appears to have worked in a few circumstances.  Steve Jobs pops to mind.  But, I would be willing to bet that there are some unsung heroes even in his success stories.

It’s not ineffective and risky for leaders to come up with new ideas.  It’s ineffective and risky when its only their ideas that get attention and organizational resources for several reasons.

Why?  Because so many successes are the result of accidental experiments.  Somebody’s track record isn’t necessarily a good predictor of their future success.  The folks who do have a good number of successes probably have more trials and failures as well.

The reason why this leadership style isn’t prevalent is because few people believe this.

I think back to this and this post on Felix Dennis, publisher and billionaire.  He has come up with a number profitable ideas in his day.  But, the true secret to his success is how he has harnessed the ideas of others.

Manage the right outputs

I believe one secret of good leadership is rewarding and punishing the right outputs, or results.  Bad leaders tend to fixate on inputs and/or the wrong results. 

For example, a business owner complained to me about one of his associates.  His gripes were personal preferences.  He didn’t like the way his associate did this or that.  He asked my opinion.  Rather than giving it based on my five minutes with the guy (which I didn’t think would be fair to anyone), I simply asked how are his numbers?  I thought it would be good to re-focus the owner on the results.  I could read it in the owner’s eyes, good question, I hadn’t thought of that.

My advice to folks who desire to be a successful leader is to grow accustomed and adept at asking and answering …and that resulted in what?

The next step is making sure you hold folks accountable to the right results.

A business professor of mine once told the class his story about bonus structures he experimented with when he owned and operated sandwich shops.

First, he wanted to grow revenue so he tied managers’ bonus to revenue growth.  That resulted in high food and staff costs as managers tried to attract business with over portioned sandwiches and always had more than enough staff on hand to handle unexpected rushes.  While customer traffic was good, profits suffered because of high costs.

Next, he tied rewards to costs to gets costs under control.  That resulted in long lines, under portioned sandwiches and customer complaints as managers tightly controlled staffing and portions to meet the cost targets.  Customer traffic slipped with service and product quality and profits suffered.

In both cases, he felt the store managers didn’t pay enough attention to the cleanliness of the store.  The owner was spent late hours scrubbing trash can lids and cleaning windows to meet his standards.

Finally, he tried a combination plan.  First, he came up with a 70 point inspection checklist that he would use to rate the cleanliness of things like the trash can lids, bathrooms, tables, floors, counters and doors.  He told his managers that he would inspect the stores any time, day or night, and to be eligible for a bonus store the store had to score 69 out of 70.

If the manager passed the inspections, then he or she would be eligible for a bonus that was based on year-over-year revenue and profit growth for the month.  Further, for each month that staff costs were less than a certain percent of sales, staff would receive a bonus making up the difference.

He was pleased with the results.  He said managing the operation became as simple as conducting the inspections.

He no longer spent late nights scrubbing trash can lids.  Managers and staff found ways to increase sales and control costs, rather than focusing on one at the expense of the other.

It took some experimentation, but he seemed to have have found the right outputs to reward.

The Fatal Conceit in Organizations

If you find yourself justifying  centralized decision-making in your organization, especially when you have decision-makers who you will be overriding, you should consider three things.

1) You may have the fatal conceit.

2) You have hired the wrong people.

3) It is not likely to end well for you.

Weekly Roundup

First, from Walter Williams, A Minority View: Excused Horrors.

Nazis were responsible for the deaths of 20 million of their own people and those in nations they conquered. Between 1917 and 1983, Stalin and his successors murdered, or were otherwise responsible for the deaths of, 62 million of their own people. Between 1949 and 1987, Mao Tsetung and his successors were responsible for the deaths of 76 million Chinese.

For decades after World War II, people have hunted down and sought punishment for Nazi murderers. How much hunting down and seeking punishment for Stalinist and Maoist murderers?

…the reason why the world’s leftists give the world’s most horrible murderers a pass is because they sympathize with their socioeconomic goals, which include government ownership and/or control over the means of production. In the U.S., the call is for government control, through regulations, as opposed to ownership. Unfortunately, it matters little whether there is a Democratically or Republican-controlled Congress and White House; the march toward greater government control continues. It just happens at a quicker pace with Democrats in charge.

In Worse Than Taxes, John Stossel makes the point that while taxes are bad enough, what’s worse – and gets little attention – is government spending.

[California and New York] would have big surpluses had they just grown their governments in pace with inflation. But of course they didn’t. Now the politicians act like their current deficits are something imposed on them by the recession.

Had the government of New York state grown at the rate of population and inflation over the past 10 years, it would have a $14 billion surplus today. Instead, spending grew at twice the rate of inflation (http://tinyurl.com/yguvfpm). So New York has a $3 billion deficit.

Stossel quotes Walter Williams:

It reminds me of Walter Williams’ riff: “Politicians are worse than thieves. At least when thieves take your money, they don’t expect you to thank them for it.”

And Milton Friedman:

The true burden of government, the late Milton Friedman said, is the spending level. Taxation is just one way government gets money. The other ways — borrowing and inflation — are equally burdens on the people. (State governments can’t inflate, but they sure can borrow.)

Are You Qualified for that Position?

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 a well-run campaign.

That proves 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, run your state for a term or two, or go run a business, military unit or some Federal department – and have success to show for it.

As for Obama, the ‘well-run campaign’ defense is a joke.  A well-run campaign?  So, 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 perform well to 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 to run your team or the guy who has been your team’s radio announcer for 20 years.  You’re going to look for proven talent within the college and professional ranks 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 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 and telling them they aren’t up making the grade.

All Politicians Are Narcissists

This post at Cafe Hayek reminded me of one my key rules: 

Assume all politicians are narcissist. 

Even the one’s I vote for.   I do not trust them.  I will not spend much energy defending them.  That’s why I love the design of checks and balances in our government.  It’s tough to get a bunch of narcissists to agree with eachother.

Same goes for most people in the entertainment biz. 

The only exception is when I hear a blatant misrepresentation.  For example, my two word defense to people who call Rush Limbaugh racist is “prove it”.  He may be.  I don’t know.  I can’t get into his mind to see what he really thinks.  But, to make that judgement I need evidence.

If I catch myself falling for one of these guys (Sarah Palin), I remind myself of my key rule.  Sarah wrote a book with a big picture of her on the cover.  I’m sure I’ll read it.  Good for her.  I’m sure she wrote really good things.  But, there’s a big picture of her on the cover.  She’s a narcissist.   

 Now, I can already hear some asking, “aren’t you a hypocrite?  You tell others to prove Rush is racist, but you assume all politicians are racist.” 

For that, I’d give you some credit.  However, I’d point out that my rule is, first and foremost, a defense mechanism meant to keep me from getting too disappointed when humans turn out to be humans. 

Second, I can believe someone is a narcissist, but still hear them out on their beliefs about how the world works and decide whether I agree or not.  It would not be easy to do that with someone who I believe is a racist, which is the exact reason why people call Rush racist.  Those people don’t want you to listen to what he has to say.

I Like the Way He Runs the Country

Long ago I asked a friend what he liked about the then President.  He replied, “I like the way he runs the country.”

At the time, I didn’t understand what was fundamentally wrong with his statement.  Now I do.  Many today make the same mistake my friend made.

The President does not run the country.   He barely runs the government.  He commands the military, approves or disapproves of legislation from Congress, makes lower level appointments and nominates people for higher level appointments such as Supreme Court Justice, with Senate approval and makes treaties, again with Senate approval.

The oath of the President is: “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”

The fundamental mistake I encounter in conversation after conversation is this implicit idea that the President runs the country much like how a CEO runs a company.  That idea underlies such statements as: “Let’s give him a chance.  The other guy wasn’t getting things done.”  “There is no right or wrong, let’s just see if this works.”

The goal of the Office is to defend the Constitution of the United States, not to ensure that every pot has a chicken.

The goal of the Constitution of the United States is to protect citizens from the illegitimate exercise of power from others and from the government itself.

There is a right and wrong.  We shouldn’t be wondering if “this guy” will get things done.  It should be really, really clear.

The President is either preserving, protecting and defending the Constitution of the United States with the powers vested in the Executive Branch or he is not.

We should be able to trace each of his official actions, platforms, positions back to the powers enumerated to the by the Constitution or we cannot.

It’s that simple.  It’s that clear.

We can choose to learn from the billions of other humans who have lived (and still live) under kings, dictators, despots and other forms of centralized authority or we can choose not to.

Thomas Sowell’s Brainy Bunch

Here’s a good read today from Thomas Sowell.  Some key words:

There is usually only a limited amount of damage that can be done by dull or stupid people. For creating a truly monumental disaster, you need people with high IQs.

Such people have been told all their lives how brilliant they are, until finally they feel forced to admit it, with all due modesty. But they not only tend to over-estimate their own brilliance, more fundamentally they tend to over-estimate how important brilliance itself is when dealing with real world problems.

Many crucial things in life are learned from experience, rather than from clever thoughts or clever words. Indeed, a gift for the clever phrasing so much admired by the media can be a fatal talent, especially for someone chosen to lead a government.

Smarts creates a dangerous veneer of legitimacy for many.  I prefer experience, as does Sowell, but I’m also skeptical of that.  I prefer results, but take those with grain of salt.

Back in 2005, Paul Johnson wrote a column in Forbes called Five Marks of a Great Leader.  He had some things to say about smart people too.  Two of the five marks were judgment and sense of priority.

What makes a person judge wisely? It is not intelligence, as such. Clever people with enormously high IQs often show scarifyingly bad judgment. Nor is it education. When I need advice, I rarely turn to someone with first-class honors from a top university. I turn to someone who has knocked about the world and cheerfully survived “the slings and arrows of outrageous fortune.” One man to whom I turned for his judgment was Ronald Reagan. Though not a scholar by any gauge, he almost invariably judged correctly on the few big issues that really matter.

Being able to judge well is often linked to an ability to mix with and learn from other people–not so much from experts but from common people, those who lack the arrogance of power or the desire to show off their intelligence but who nevertheless think deeply about life’s trials. A person of judgment develops the habit of asking questions of such wise people and listening to their replies.

In running a country or a vast business, one is faced with countless problems, huge and insignificant, and has to make decisions about all of them. Clever leaders (I’m thinking of Jacques Chirac) often have a habit of pouncing on minor issues and pushing them at all costs, even to the detriment of their real interests. Sorting out the truly big from the small takes an innate horse sense that’s not given to most human beings. It has little to do with intelligence, but it is nearly always the hallmark of a great leader.