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About me: I'm an unrepentant generalist finding my way in a world of specialists. I started this blog to review books, but I now talk about topics ranging from management to cognition to social software.
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This book is recommended by Joel (mentioned in his post on “Econ 101 Management”) so we read it recently in our book club at work.
The premise is that measuring employee performance is guaranteed to distort an organization’s desired results. This assertion contradicts management mantras everywhere, such as “You can’t improve what you can’t measure”. How can a manager know her employees are doing the right thing for the company unless she measures their performance?
Austin attacks this conventional wisdom by creating an economic model of how managers and employees will interact, and then exploring the consequences of that model. The model assumes a certain amount of intrinsic motivation - that the employee wants to do the right thing, but is only motivated to work so hard on their own. So the manager has to offer incentives to get the employee to work harder.
In the model, the employee has two dimensions along which their performance could be measured. If the manager offers incentives based on only one of the dimensions, that will distort the employee’s efforts. Austin uses the example of a job placement service which offered incentives based on the number of job applicants each employee interviewed. The inevitable result was that the employees spent all of their time interviewing applicants and none of their time calling companies to find jobs for those applicants. The goal of the organization was to connect applicants with jobs, but because of the distorted incentive system, it failed completely. Another example is from 21 Dog Years, where customer service representatives at Amazon were measured by how many phone calls they answered per hour. Mike Daisey hung up on every third caller and won a customer service award because he answered so many calls.
At this point, many managers are saying “That’s because the measurements were stupid - if I measure enough aspects of performance, then I can construct an appropriate incentive system.” The problem is that not only do managers have to measure all aspects of performance that contribute to company goals, they have to measure them all equally well. Otherwise, Austin’s model shows that the poorly measured aspects will get ignored in favor of the well measured aspects, and the same sorts of performance distortion occur.
Furthermore, measurement has a cost. An organization has to spend time and resources constructing measurement systems and reviewing the results. If an organization has to measure many aspects of performance to monitor employee performance, the cost of such measurement may outweigh the short-term benefit in increased employee performance.
Austin acknowledges the possibility that in a system with perfect knowledge of what an employee should be doing, such as an assembly line, it might be possible to perfectly measure performance along all relevant axes. But in a knowledge and service based economy, the measurement of performance is always going to be inexact. Because measuring performance directly is impossible, organizations use easier-to-measure proxies for performance. And because there is not a direct correlation between measurement and performance, distortions are introduced into the system.
Austin recommends managing by increasing the intrinsic motivation of the employee to do a good job. He makes the assumption that employees know the most about how to do their own job, so they are the only ones who can optimize their effort among the different aspects of their job. So a non-measuring manager needs to convince the employees to do their best “by example and through persuasion, and in clearly communicating direction to employees”.
The weakest part of the book is that Austin’s thesis rests on the model he constructed for how employees might behave in a measured environment. While the model is appealing, he provides very little data justifying the assumptions he builds into the model. For instance, he assumes that the employee knows better than the manager on how to optimize effort, but that assumption would not hold in a situation where a recent college graduate is being managed by a twenty year veteran. He also assumes employees want to do the right thing for the company/customer, which is not universally true in my experience. Austin is playing the same game as the managers he criticizes - he makes convenient assumptions and constructs a system that will work for those assumptions.
Despite having issues with his methodology, I agree with Austin’s recommendations for management. I hate being measured, as my rant about timesheets illustrated. Don’t revert to Taylorist management methods that treat the employee as an automaton that has to be bribed into doing the right thing. Hire skilled people who want to do a good job, point them in the right direction, and then clear obstacles from their path so they can get there.
I recommend the book as a thought-provoking read despite its weaknesses. Austin’s model is a good counterweight to the pithy aphorisms spouted by management consultants. His thought experiment provides ammunition for a more human-oriented style of management, where employees are treated as more than numbers in a spreadsheet.
After reading Survival Is Not Enough, I figured I would go ahead and pick up another of his books since it was in the office library. This was another very quick read, with one good idea. To wit, Godin suggests that it is no longer good enough to have an outstanding message or advertising campaign; your company has to have a product that stands out from the rest of the marketplace, something that is really different and attracts attention - for instance, a “Purple Cow”. The downside to creating something really different is that it won’t appeal to everybody. Some people will hate it, some will love it, and that’s okay; that means it is not in what Kathy Sierra calls the Zone of Mediocrity.
The rest of Godin’s book is filled with inspiring stories of companies that took chances, catered to the extremists rather than the mass market, leveraged the gossip power of early adopters (he calls them “sneezers”), etc.
I liked the book, but there’s not a lot there. Borrow it if you can.
Another book from the Joel reading list. Subtitled Guerilla Tactics for an Imperfect World, this is a book by a career programmer on how to survive in the corporate world. Having spent eight years as a software developer in a variety of corporate environments, I was curious to see how much these tactics would have helped me in past skirmishes I had participated in. The answer? Not much at all.
Even though it purports to give you tactics for surviving in the real world, I found very little that would have helped me in the various real world conflicts that I’ve been part of. For instance, he assumed that every programming house uses the waterfall development model (specify, design, implement, test), and pitches a lot of his advice on how to cut corners within that model to make deadlines. Since I’ve never worked at a place that used that philosophy, I found that to be a big weakness of the book.
I also found some of his advice to be laughably optimistic. He suggests telling the boss that you need a few days to come up with a good estimate of how long the project will actually take, or that there will need to be as much time on the schedule for testing as there is for implementation. Having tried both of these requests in the past and having zero success with either, I kind of wonder what companies he worked at that made him think a programmer would have the leverage to receive positive results for such requests.
If he had been writing a book on what the ideal software development world, I might have forgiven such lapses. But I found it far too idealistic for a book that claims to be about the real world. Big thumbs down.
I first learned of Scott Berkun last year, when I followed a link to one of his essays and found it thoughtful and well-written. I started reading his blog, joined his mailing list. and kept my eyes out for new content from him. So when I saw his book, The Art of Project Management, in the Fog Creek library, I grabbed it and read it over the past couple weeks.
It’s really good. It’s a well-written book condensing his years of project management experience into chapters with good questions to ask and lists of tactics to try. Lots of sensible, down-to-earth advice about what it takes to manage a project from start to finish, including how to get started, how to define the project, how to relate to your team, and how to drive through to the finish. Check out the sample chapters from the book website
One of the things I really liked about the book is that he starts from the problem that needs to be solved (e.g. coordinating people on a project) and works outward from there, suggesting several possible solutions. Rather than presenting a big-M Methodology, he presents a variety of tactics the prospective manager can use; in the case of coordination, he suggests everything from a whiteboard outside the office listings the current to-do list, to Excel spreadsheets, to Gantt charts, to heavy-artillery project management software. They’re all just different tools that can be deployed to solve the problem. By keeping the focus on the problem, rather than on specfic solutions, he provides a much more useful perspective than other business books that try to espouse the One True Way of management.
Along similar lines, he tends to focus on the questions that the project manager should be asking, rather than the specific answers to those questions. For instance, he points out that the point of a vision document is to answer certain questions about the project; if it is not useful in later guiding how the requirements are developed and the work task list is created, then it has failed as a vision document. He doesn’t give a format for the vision document or meaningless stuff like that; he just explains what it will be used for, and therefore the questions it has to answer.
I was also pretty inspired by his bibliography. The books I had read I really liked (e.g. Sources of Power and Peopleware) and the ones that I hadn’t, he provided really interesting descriptions of that made me want to read them (several of them are winging their way towards me from Amazon as we speak). I often flip straight to the bibliography of books these days to judge whether they’re worth reading, so seeing that he liked several of the same books I do made a positive impression on me.
It’s a good read. I had planned to pick up a copy for my personal bookshelf, but I got a chance at receiving a free copy so we’ll see how that turns out first. But I definitely recommend it - I have a feeling I will refer to it often in upcoming years.
Technically, this isn’t on Joel’s list, but he knows Seth, and several of Godin’s other books are on the shelf in the Fog Creek Library, so I’m counting it under a technicality. I happened to pick up this particular book a year ago in San Francisco from the discount rack in a book store. Seth Godin has some interesting ideas about marketing, and this book promised to relate the ideas of memetics and evolutionary biology to the world of business. But after I bought it, I got distracted, so I put it on my shelf, and it stayed there, unloved, for a long time.
Until last weekend. I was looking for something to read, and my new Amazon order had not yet arrived, so I picked it up. It’s great. Really well-written and easy to read, and completely relevant to where I am right now in my thoughts. Another one of those right-time, right-place kind of reads.
Seth Godin’s main point of this book is that change happens. And it is happening more and more. Therefore any company or person has to learn to deal with change. You can create a viable winning strategy, but that strategy will get overtaken, much like the dinosaurs got overtaken by those pesky little mammals (my analogy, not his). He points out that nature has already come up with a mechanism for dealing with continuous change in natural selection: constant change via mutation, evaluated by sexual selection and natural selection. So he recommends learning from evolution to deal with the phenomenon of accelerating change.
It was good for me to read right now, because I’m the midst of trying to change my own outlook on a bunch of things. He basically endorses the idea of rapid prototyping in life, and encourages ever faster feedback loops. Change all the time, but evaluate all the time as well. The only quibble I have with the book is that he (deliberately?) does not discuss what a proper fitness metric should be for a company or a person in evaluating which changes to keep. I think this is because it varies so much from person to person and company to company, but it does make it harder to apply his advice - I could easily see a misguided company apply all of his advice, but use the fitness metric of “reinforcing the things we have always done”, which would subvert the whole point of his other strategies.
One other point that I liked as a generalist is that he counsels against becoming an expert, because investing the energy and resources in becoming an expert means that you (or your company) has committed itself to a specific path, and therefore will be unwilling to change later. This can work for a while, and sometimes pay off spectacularly, but since all winning strategies eventually fail, it’s a race against time. If you are changing all the time, then one can continually evolve new winning strategies, and therefore not worry about when the current one will fail. Plan for the obsolescence of your strategies. It was good for me to read this perspective after reading the opposite take last month in The Only Sustainable Edge, as mentioned in this post.
So I recommend it - it’s a quick read, with a couple good ideas. I’ll probably borrow a couple other of Godin’s books from work when I get a chance.
P.S. I know I’ve said this before, but perhaps I will endeavor this week to catch up on my backlog of book reviews. My brain has been fried from too much tech support at work (new product release a couple weeks ago), so I haven’t had much in the way of original thought, and most of my brain has been caught in a fugue-like state of trying to figure out where I want to focus my energy at work. Maybe writing about my thoughts from the books I’ve been reading will help remind me what I think is important.
I was kind of skeptical of this book when Joel handed it to me, but it was surprisingly good. It doesn’t have any original ideas, and didn’t change how I think, but the book was well-written (apparently by Catherine Fredman) and did a good job of describing how Dell had taken some basic business precepts and actually implemented them at their company. Things like “Build a company of owners”, “Develop a customer-focused philosophy”, “Narrowing our focus”, etc. It’s all really basic stuff, but they spin a good story of how these principles apply to the growth of Dell the corporation.
Reading the book did provoke me into thinking about whether I believed in the principles Dell was laying out, and how I would apply the principles at my own company. I do find it a bit ironic that listening to the customer is emphasized so much in the book, yet a couple weeks ago it took us five hours on the phone to get Dell to acknowledge that a part they had sent us was broken and that they needed to replace it. Perhaps the principles are not as well disseminated as they once were.
Summary: Quick read, well done, nothing earth-shattering, but a nice reminder of some basics.
This is a classic book on negotiation, introducing the theory of principled negotiation. The idea is that most negotiations tend to become positional negotiations fairly quickly; I offer a book for sale for $20, you offer me $10, I go $18, you go $12, we end up at $15. Positional negotiations make sense in a zero-sum game, where a gain for one party is a loss for the other. However, in more complicated negotiations, positional bargaining can often obscure the real issues at hand and prevent win-win scenarios from occurring.
The idea of principled negotiation is that you let go of positional bargaining, and instead stand firm on your interests. How those interests are satisfied by various proposals can be negotiated. By focusing on the interests, rather than clinging to positions, there is more scope for creative solutions. For instance, the authors use the example of the negotiations between Israel and Egypt where both countries laid claim to the Sinai peninsula after a war. Neither side was willing to back down. Eventually, there were discussions over the interests at work on both sides; Israel did not feel comfortable with Egypt having the ability to mobilize its army at the border. Egypt had a strong nationalistic historical interest in the Sinai, and felt strongly that its historical claims to the land needed to be upheld. By focusing on the interests of both sides, principled negotiation arrived at the solution where Egypt kept ownership of the land, but agreed to make the Sinai a demilitarized zone as a concession to Israel.
There are lots of similarly good ideas in the book, such as separating the people from the problem (i.e. don’t get mad at your negotiating counterpart - be sympathetic to them, take the time to understand their position, and you may find they will do the same for you). Find ways to work together towards creative solutions. Spend the time to brainstorm ideas, but without committing to any of the proposals. Use objective criteria whenever possible, including a third party moderator if necessary.
I also really liked the one-text solution to negotiating. Have each side write out everything they would like in a final proposal. Turn over the two competing proposals to a independent third party to turn into a single proposal including the best ideas from both sides. Then everybody works together to improve that document. It’s rapid prototyping negotiation, with the proposal as the prototype undergoing iterations.
It’s a quick read. I can see why it’s a classic. Not sure how I’ll incorporate it into my daily life, but it was worth reading.
P.S. I’m going to try to catch up on my backlog of book reviews over the next little bit. I think I’ve got four or five that I’ve never written up.
This is a classic book in marketing, and therefore one of the books that Joel asked us to read. The main message of the book is that consumers have a limited mindspace. They can only pay attention to a certain number of things before they just lose track and don’t care any more. So it is vital as a company to make sure that your company marks out a clear position that is easy for the consumer to remember.
The most distinctive position to hold is to be perceived as the first or the best in a category. It’s a sign of distinction in the authors’ eyes to have one’s brand name confused with the category (e.g. Coca-cola for soft drinks or Xerox for copiers) because it indicates that your brand owns that category.
If you’re not on top, the authors describe a couple options. The best option is to create a new category; they use the example of Tylenol. Bayer dominated the aspirin market, so Tylenol started an advertising campaign as the non-aspirin pain reliever. It wasn’t a category that had existed before, but Tylenol’s marketing campaign created it, and by default, Tylenol was the leader of the category.
The other option is to use your secondary status as a plus. The canonical example they use of this is Avis, with its campaign of “We Try Harder”. Harder than whom? Well, obviously Hertz, although they never say that. Avis could paint Hertz as resting on its laurels as the market leader, so they spun their secondary status as a positive.
The other interesting point we got out of the book was the perils of line extension. It is all too tempting as a company to say “We have a successful brand, we want to move into a new area, let’s create a version of our brand for the new area”. The authors argue strenuously against this attitude. Returning to the example of Bayer, the authors pointed out that Bayer had a total grip on the aspirin market. Bayer equalled aspirin in the mind of the consumer. Then Tylenol did its end run creating a new category of non-aspirin pain relievers. Bayer reacted by creating a non-aspirin version of Bayer. Note the cognitive dissonance this sets up for the consumer; if Bayer equals aspirin, then a non-aspirin Bayer is a non-aspirin aspirin. It doesn’t make sense. It confuses the consumer, and ends up making them less likely to buy either version because it is no longer clear what Bayer means. Hence the authors highly recommend always starting a new brand for a new product category. Procter and Gamble are the masters of this; they have a phenomenal number of brand names, each of which is targeted to a specific product category.
I thought it was an interesting book with several good points. It’s highly opinionated, of course, and a bit dated (it’s over 20 years old), but the principles still make a lot of sense. After finishing the book, we had a spirited discussion in the company of how the lessons from the book apply to Fog Creek Software. And I’ve been thinking about how it applies to my own life; I think this positional attitude plays into my obsession with being the best at something. However, as Beemer rightly pointed out and as the example of Tylenol demonstrates, one can always create a category for one to be the best at by creating a new niche. More thoughts on this later.
P.S. I’ve added a new category of books, joelbooks, to indicate books that I’m reading for the Software Management Training Program. There’s a whole slew of books that are on the reading list that we’ll be working through.
I read this book once long ago, but Joel insisted I re-read it after starting last week. So I took it home for the weekend and read it while taking breaks from unpacking. It’s a quick read, with short chapters. And it’s excellent.
What’s interesting to me is that I totally didn’t appreciate the book the first time I read it. It seemed like a bunch of obvious platitudes which didn’t really matter. Upon revisiting it, though, I realized that this book contained many lessons that I had had to learn by doing things differently and suffering through the consequences.
To take a couple obvious examples, it took me many years to figure out that the best way to seem interesting is to ask open ended questions about things other people are excited about. Everybody likes talking about stuff that excites them. Carnegie laid it out for me, but I didn’t really understand. Or how offering genuine specific praise is always appreciated - I used to feel weird about bothering folks just to tell them they did something well (e.g. Telling guest soloists with the chorus how well they sang). But then I realized I always get a thrill out of such recognition (like when somebody cites one of my blog posts), so now I try to demonstrate my appreciation when I can. Another good example is Carnegie’s admonition to avoid arguments, because if you lose, you lose, and if you win, you still lose because you haven’t convinced them, just browbeaten them into submission. As those who know me can attest, my affection for confrontation and argument got me into all sorts of trouble at work for a while before I realized that perhaps arguing wasn’t the best strategy.
So I’m glad Joel suggested I re-read this book. My friend Adam who I had dinner with last night said that a friend of his recommends reading a chapter a day, and trying to apply it to one’s life; when he reaches the end, he goes back to the beginning and starts over. I’m not sure I’ll go quite that far, but it does have a lot of good advice that I can learn from. And having confirmed some of his observations the hard way, I value the others more.
One observation about myself is that although I recognize how well these techniques work and have even adopted several of them myself, they still don’t come naturally to me. I use them because they work, not because they’re how I actually feel; I haven’t really internalized them. For example, I know that showing interest in others is the best way to sustain conversation. And I can do it. But I’m sometimes not actually interested in what they’re saying. Carnegie would claim that if I continue to use the techniques, the attitude will follow, just as the best way to be happy is to force oneself to smile. We’ll see. I may just be a cynical cold-hearted manipulative person by nature.
Speaking of which, next up on Joel’s re-reading list is Cialdini’s Psychology of Influence.
P.S. Completely unpacked, pictures up, trash taken out. Visited Whole Foods yesterday and stocked up on fresh produce, yay! Started answering tech support emails today, and also helped to debug the office VoIP system at the end of the day. Tomorrow night I’m going to go check out an architect duel in Tribeca, cuz that seems like a wacky New York thing to do.
