Eric Nehrlich, Unrepentant Generalist » management

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Action despite uncertainty

Thursday, June 2nd, 2011

Scott Berkun just posted about situations in life where good data is impossible, which reminded me of a quote I’ve been meaning to share.

I once went to a talk by Bob Sutton where he cited a quote by Andy Grove, CEO of Intel:

“I think it is very important for you to do two things: act on your temporary conviction as if it was a real conviction; and when you realize that you are wrong, correct course very quickly.

Investment decisions or personnel decisions and prioritization don’t wait for the picture to be clarified. You have to make them when you have to make them. You take your shots and clean up the bad ones later.

(So you have to keep your own spirits up even though you well understand that you don’t know what you’re doing)”

I think this is one of the hardest things to learn as I progress in the business world – many situations I’m asked to handle are novel, because routine decisions are handled by bureaucracy in the form of established processes or at a more junior level. Taking action when I know I don’t have enough data requires a leap of faith that I’m best positioned to make a decision anyway.

Call your shot

Thursday, March 3rd, 2011

Babe Ruth pointing to the stands, and then hitting a home run.

Joe Namath guaranteeing a Super Bowl victory despite being an 18-point underdog, and then going out and winning it.

There’s something magical about calling your shot – telling people you’re going to do something impressive and then doing it.

Even in the workplace, the way to earn more credibility, more trust, and more freedom to do what you want without interference, is to call your shot. Tell your audience, whether it’s your managers, your team, or your investors, that you’re going to do something ambitious and then execute. Every time you call your shot and make it, you earn yourself a longer rope. If you watch the dynamics at your workplace, you’ll see this play out repeatedly.

Of course, the downside is that if you call your shot and fail, then you may lose credibility. It’s a risky ploy in that way.

But the bigger risk may be not committing to any goals at all for fear of failure. Not calling a shot means that you are subject to those around you – the freedom and credibility will go to those who take risks, while you are left behind.

Which risk do you prefer? The risk of inaction or the risk of trying something ambitious and failing? And does it change the decision to realize that trying and failing is more respected and more satisfying by far?

Who is your audience?

Sunday, February 20th, 2011

One of the broader points that I don’t know if I made clearly in my last post is that effective communication depends not only on the message you are delivering, but also on the audience which the message is targeting. In the case of writing a resume, you have to remember that you are targeting a busy hiring manager who will spend less than ten seconds in glancing at your resume before making a decision. To get the phone screen, you need to tailor your resume for that audience, rather than doing what is most convenient for you.

This idea of knowing your audience resonates in all aspects of business life. It’s difficult to design an effective communication without knowing who the recipient is. But if you know who are you speaking to and the message you want to deliver to that person, it makes it much clearer how to design that message to reach your target. For instance, when a presentation is not coming together, I am often able to help coworkers by asking who the target audience of the presentation is, and what message they want to deliver to that audience. I’ve learned from my manager to ask of each element of the presentation “So what?” – why should the audience care about what I’m presenting?

As an aside, another aspect of designing effective presentations is realizing that you need to get the audience’s attention in the first 30-60 seconds, just like with a resume. These days, every audience has their smartphones or their laptops in easy reach with lots of distracting possibilities. So your presentation has to grab their attention in the first minute, or they’ll tune you out and go catch up on email or Twitter or Facebook. Any presentation that depends on the audience paying attention for ten minutes before delivering any sort of pay-off is going to fail because the audience will have been lost. As with the resume, what you are really trying to do with a presentation is earn the right to the audience’s attention for a little while longer. Structure the presentation in such a way to deliver value to the audience throughout, or you will lose them.

Being able to understand your audience well either involves empathy or experience. Empathy in the sense that it depends on being able to put yourself in the position of your audience to understand what they care about. Experience can sometimes substitute for empathy as you may have been in the position of your audience yourself (e.g. my experience as a hiring manager has made it clearer to me what other hiring managers might be looking for on a resume). Either way, though, the first step is to step away from your own knowledge and needs to think about what your audience needs to get from your communication.

This is also a key skill as a product manager – understand the target user, figure out what problems they are having and design a new product or feature to solve their problem. All too often, product managers start from a self-centered point of view and create a new product/feature based on what they can offer without thinking through what their user wants. This is particularly common in larger corporations where the product managers are often separated by many layers from dealing with actual customers or users. Meanwhile, in my time at Fog Creek, I spent enough time on the phone doing tech support and sales that the perspective of our customers was never far from my consciousness. Again, either empathy for or experience as the potential user is crucial to making the right decisions.

Developing the ability to effectively construct communications for a variety of audiences, whether the communication is in the form of a presentation, a white paper, an email, or a product requirements document, is a skill that is essential to corporate life (and, really, all of life). So before your next important communication, think about who your audience is, what they want, and how you can construct your communication in such a way as to get your message across more effectively.

P.S. It’s interesting to note how my thinking on this has evolved slightly from my post in 2009 asking what is the story, as I now realize that getting the story right involves understanding the audience. Stories are not universal – they are just one way to convey a message from me to you.

How to write a resume

Friday, February 18th, 2011

I’ve written the same email five times in the last several months giving friends advice on how to write their resume, so I figured it was time for me to package it into a blog post that I could then just link to when needed. Assume this is my response to somebody with a few years of experience who is starting to look for a new job and looking for feedback on their resume.

The first thing to remember is that a resume is a sales brochure – the goal of a resume is to convince the HR person and hiring manager to give you a phone screen. That’s it. Your resume is not your career history or academic C.V. where you list everything you’ve ever done – its only purpose is to convince somebody to give you more time to sell them on the fact that you are the right person for the job.

Even scarier, your resume has only ten seconds to make that initial sale and convince the company person that you are a good enough fit for the position to be worth spending more time on. It may seem unfair for your career to be evaluated in ten seconds, but I’m often reviewing resumes at the end of the day, flipping through a stack and seeing if any catch my eye. I’ll review the ones that catch my eye more closely and spend as much as 30-60 seconds looking at the resume before making a decision on the phone screen. But the resume has to grab my attention in the first ten seconds, or it’s gone. I like Rands’s take on how a hiring manager scans resumes to explain the thought process.

If you only had ten seconds to sell yourself to somebody, would you try to tell them your entire life story? Of course not – you would tell them only a few key points that make you stand out and show that you’d be a great fit for the position. You should take that attitude with your resume – anything in your resume that does not contribute to the immediate goal of selling yourself to the company should be removed.

So what does that mean in practical terms? You need to make it really easy for the resume reviewer to learn what you want them to know about you in that initial ten seconds. You can help with that by only including what you want them to know and using formatting to make particular bits stand out. For instance, on my resume, I put my academic degrees at the top because seeing MIT, Stanford and Columbia generally gets people’s attention. I’ve also gotten to the point in my career where I’ve started dropping jobs that aren’t relevant to my current career track (e.g. my physics internship between undergrad and grad school).

You also need to sell yourself on the resume. This is difficult for many engineers and introverts, as bragging is not something that comes naturally to us. But this is the place to do it. Talk about how great you are, and the amazing things you’ve done. You can not expect the reviewer to spend time reading between the lines to understand your awesomeness – you have to spell it out in neon so they can get it on a quick glance.

Along those lines, list key accomplishments, not responsibilities. Don’t tell me that you were doing X, Y and Z – that doesn’t tell me whether you did X, Y and Z well, even if you say you “successfully” did X. Tell me how you changed things for the better. How was the company different because you were there rather than some other person? If you can quantify your accomplishments, even better – increased sales 20%, reduced downtime by 50%, whatever you can measure. As an aside, this is also useful to consider how you are approaching your current job – what are you accomplishing and can you measure it?

Make the resume specific to the job that you are applying for. Remember, the resume is a sales brochure – you want to target your sales job at your customer, the resume reviewer in this case. That may change which of your accomplishments you want to highlight in a given job, or may change what you want to emphasize with formatting on the resume. You can have a “raw materials” career history with all of your career accomplishments from which to draw, but then edit it down for this specific audience.

Include interesting extracurriculars, especially ones that show achievement. Again, the goal of a resume is to stand out from all the others ones in the stack being reviewed – extracurriculars are one way to do that. We had one candidate last year that included the fact that she had won beauty contests as a teenager – totally irrelevant for a financial analyst position, but it made her resume stand out, and we took a closer look at her actual credentials and brought her in for an interview. In my case, my San Francisco Symphony Chorus experience, which included singing at Carnegie Hall and winning a Grammy, is a nice tidbit to mention.

Keep the resume to one page – this may seem impossible once you have more than a couple jobs, but if you only list one or two key accomplishments from each job, you can do it. Remember, anything that isn’t relevant to making the sale shouldn’t be on the resume anyway. Plus I rarely read beyond the first page of a resume, so if there’s anything on the second page that you wanted me to see, you lost your chance.

I highly recommend converting your resume to a PDF before submitting (I print to a PDF file using CutePDF), just to make sure that formatting is preserved and nobody can edit your resume as it wends its way through the system.

That’s about it. Remember the key points – your resume is a sales document designed to earn you more time to sell yourself on why you’re the right fit for the job. It initially has ten seconds to stand out, and then another 30-60 seconds to convince the resume reviewer to give you a phone screen. Everything on the resume should contribute to closing that sale. If you do that, your chances of getting phone screens will go up.

P.S. I’ve uploaded the resume that got me the interview at Google if you’re interested in what I did last time I was looking for a job. I’d do things differently now, but hopefully it gives some ideas.

Management Innovation Exchange

Monday, April 19th, 2010

The Management Innovation Exchange (aka MIX) looks like an interesting project. It’s a collaboration between McKinsey, London Business School and a couple companies like Dell, with the idea being to open source ideas about management. It’s unclear yet whether it will attract a critical mass of community to discuss ideas (so far, the curation looks weak), but given my long-standing interest in different management structures, I plan to stick around for a while offering up ideas. I’ve already written one post there about the challenges of communication within an organization, and plan to do a couple more this week. Check it out!

Trade-Off, by Kevin Maney

Monday, April 12th, 2010

Amazon link

Trade-Off is a book which explores a simple, but useful, way to frame the world. Kevin Maney plots products along two dimensions, fidelity and convenience, and then spends the rest of the book discussing how products end up in different places on that graph, from the “fidelity belly” to the “fidelity mirage”

Fidelity is essentially quality – what makes a product unique or an experience. Examples include luxury goods that identify the owner as a person of taste, or live rock concerts where the sheer sensory overload is unmatchable by one’s stereo.

Convenience is, well, convenience – how easy it is to get the product. This includes both physical convenience as well as cost – places like Wal-Mart aim to maximize convenience by being a one-stop shop with the lowest prices.

Maney makes a few key points:

  • There is always a trade-off between fidelity and convenience. Trying to position the same product as being the highest quality as well as the most convenient is oxymoronic (one of his interviewees quips that “A successful business is either loved or needed.”). He calls this the “fidelity mirage” where a company attempts to maximize both dimensions at the same time, which generally leads to failure in the marketplace.
  • The products that win pick a dimension to maximize and stick to it. Either they aim to be the high-end of the market, like Apple has with the iPhone, or they aim to be the commodity provider, like Wal-Mart. Being clear about where a product is positioned is essential to success.
  • Products that fail to distinguish themselves along either dimension end up in the “fidelity belly”, neither high enough quality to distinguish themselves, nor convenient enough to compensate for the perceived lack of quality.
  • One useful observation was that technology continually expands the boundaries of the “fidelity belly”. The feature that made your product unique and special a year ago will get copied by your competitors and is no longer a distinguishing characteristic – the fidelity advantage has been lost. Similarly, a supply chain innovation that enabled lower prices can also be copied, losing the convenience advantage. Companies must keep innovating to stay ahead of their competitors, and only by staying focused on one dimension can they outrace the “fidelity belly”.

That’s basically the whole book right there. He tells a bunch of stories about how companies succeed or fail framed with this viewpoint, but you get the idea.

The book was a good reminder about the importance of focus and positioning; understand where you can get a step on your competition, and then find ways to maintain or extend that lead. The same applies to personal positioning, as Maney mentions in an epilogue. All in all, it was a quick read from the library, but I can’t particularly recommend it.

P.S. Jim Collins, the Good to Great author, wrote the introduction, and had a nice paragraph explaining the value of finding new mental models as tools:

A strategic lens … does not in itself give an answer about what you should do, and not do. Rather, and much better, it forces you to engage in a powerful question, from which you derive your own insight and make your own decisions. If you engage your team in a vigorous debate stimulated by the questions that naturally arise from the ideas in these pages, you will gain deeper understanding not just of what you should be doing (or not) but, even more important, why. The power of a strategic concept lies first and foremost in giving us a lens and a stimulus for hard thinking and hard choices. The critical question is not its universal truth, but its usefulness.

Chief Culture Officer, by Grant McCracken

Wednesday, February 10th, 2010

Amazon link

I have been a fan of Grant McCracken’s for several years now, so I was eagerly awaiting his new book, Chief Culture Officer. Note that I may be slightly biased in this review, as Grant mentions me in the book as a potential CCO candidate.

Chief Culture Officer is McCracken’s manifesto of how and why culture matters to the corporation. He starts the book with stories like Levi’s missing a billion dollar opportunity in the mid-90s because they didn’t see the hip-hop trend and therefore didn’t understand why anybody would want baggy jeans. Another example is Steve Jobs revolutionizing industry after industry by leading a new wave of culture e.g. using iTunes and the iPod to create an individual song a la carte option in the music industry so people could create their own mixes. Or Geoffrey Frost at Motorola creating an enormous amount of value with the Razr.

McCracken then dives into several of the trends that have been taking place over the last few decades:

  • Culture fast and slow – fast culture is the bleeding edge, particularly notable in the fashion and design industries where “that’s so five minutes ago” is a meaningful insult. Slow culture is represented by less flashy, more subtle trends, like how we think about our food, or how homes are changing to reflect updated needs.
  • Status and cool – status is Victorian and high culture – it’s about aspiring to the One True set of status indicators like the luxury car, an appreciation of art and opera, etc. Cool is represented by outsiders such as the beats – it’s doing what the hip kids are doing rather than conforming to society’s expectations. I liked McCracken’s observation that the two trends, at odds throughout the twentieth century, have now fused into an interesting hybrid where “cool” avant-garde liberties in personal expression are eventually co-opted into the social order of “status” (shades of learn and latch).
  • Producers and consumers – the age of mass media was about few producers and millions of consumers. We have moved towards a many-to-many fragmented culture, as everybody now has the tools of production. That changes our entire relationship to media, both as producers and consumers.

One insight I particularly liked was that “Convergence culture is fleeting. But it supplies order, and for the CCO this order is a gift”. Seeing the right cultural trend splits the world in a useful way and illuminates events by giving a framework through which to view them. It gives us a meaningful story by which we can interpret what’s happening, and testable hypotheses as to what will happen next. McCracken suggests we should be tracking the trends that we think are happening and revisit those predictions, so that we can learn from our mistakes (I would note that blogs are a particularly good way to track such thoughts).

How does the CCO figure out which are the next meaningful trends, and which are fads that will fade away? They need to monitor magazines, TV shows, internet forums – one person can’t do it all, so how do we collaborate? McCracken suggests having a group of advisors/editors who can collectively share tidbits (I would suggest that Twitter can be useful for this purpose if following the right set of people). And once potential trends of interest are identified, how do we convert those into actionable insights? McCracken suggests that the CCO needs to champion efforts in the corporation that catch the rising wave, and fight back against the ones on the subsiding ones.

Another insight I liked was the corporations breathe culture in and out – “the corporation is not just an economic actor, it is also a social and a cultural one.” Brands are not imposed on people; instead, brands only derive meaning from how people incorporate brands into their self-story. Brands must spark a recognition within the consumer that the brand is a meaningful expression of identity. For instance, cars are a quintessential expression of identity, ranging from muscle cars, hybrids, or minivans. In this vision, brands that aren’t co-opted and multiplied by their users wither away and die.

McCracken finishes up with a chapter on the nitty-gritty of how to observe and monitor culture, including an appendix with “A Tool Kit for the Rising CCO”, which includes recommendations for magazines, TV, events, people, books, etc. His ethnographic perspective emphasizes the act of noticing, both observing a behavior and then explaining it with a story. Part of the challenge of noticing is keeping an open mind. If you go in with an opinion, you’ll fit your observations into that opinion – you have to pay attention what is actually happening and willing to follow up on surprising inconsistencies. The ethnographer is actively engaged, “capturing how and why the assumptions in this life go together, or feel they do”.

I like McCracken’s premise that understanding cultural trends is vital to corporations that want to act effectively in this world. And as usual, I love his insights into our culture – he provides useful stories for understanding what is going on around us. This is the kind of book that is easy to read, but has meaning that is only slowly percolating into how I think. Good stuff.

P.S. As mentioned previously, McCracken is holding a Chief Culture Officer Boot Camp this Saturday in New York. I’m excited to attend, and will report back with my notes and observations afterwards.

Coaching and feedback

Saturday, January 30th, 2010

In my last post, I talked about getting the reps to improve oneself on desired skills. But it’s difficult to make the time for practice, especially for deliberate practice where we are always dancing on the edge of failure. And I think that’s where I think Coyle’s observation that coaching is an integral part of talent development comes in.

One of the keys to being able to stay in the productive zone of deliberate practice is to create a tight feedback loop. Deliberate practice is about pushing oneself beyond one’s capability, failing and then figuring out how to do it right. However, a key aspect of this is getting immediate feedback on both failure and on getting it right. My theory is that part of mastery is repeating techniques until they are built into the unconscious part of the brain, and getting to that point requires consistent and useful feedback.

Fast feedback is also essential. Imagine a thought experiment where you had to wait a minute to find out if your previous action had worked or failed – you would never be able to stay in a zone of productivity because in that minute, you’d get distracted, and maybe even start on a different task (this is the experience of software engineers in languages without a REPL). To keep yourself driving forward, and experimenting with new techniques that may or may not work, instant feedback is a necessity. And that’s what a good coach can provide.

Coaches provide the immediate feedback necessary to stay in the mode of deliberate practice. This is especially necessary at the beginning of the path towards mastery, before the student has developed their own self-awareness so they can detect their own errors. Coyle described two researches watching John Wooden coach the UCLA basketball team; they were surprised to find that so little of his communication was in the form of praise or disapproval, but instead 75% was in the form of information transfer. He was watching his players and offering them instant feedback on what they were doing right and wrong. That accelerated their path to mastery, as they did not have to do trial-and-error experimentation to learn what worked and what didn’t.

One key aspect of coaching is that it’s not just objective feedback, but also why things happened. I could learn how to shoot a basketball better by just shooting a lot of baskets, where my objective feedback would be whether I made the basket or not. But when I missed a basket, I wouldn’t know why. And when I made a basket, I wouldn’t know how so I couldn’t repeat it. I would try a number of different things, and only a few of them would work, so I’d be wasting a lot of time in experimentation. However, if I had a coach, they could watch me, tell me what I was doing right, and more importantly, why it worked, so I could start to internalize the correct techniques. My improvement would happen much faster, because I would be able to integrate the “story” of the right way to do things into my self story.

As an aside, I was thinking about this last week during a discussion on a random Google mailing list discussing an ethnographer’s observations about Google in China. A couple engineers were dismissive, saying that objective data was better than these subjective stories. My point was that these stories help us interpret the data – data can tell us that market share is changing or that Chinese users are using instant messenger over Gmail, but social scientists can help tell the story of _why_ these trends are happening.

I think the other aspect of deliberate practice that a coach can help with is in helping with the motivation necessary to stay on the edge of failure. It’s so much easier to keep on doing what we are already good at than it is to consciously decide to do something that we know we’ll fail at. So having somebody there to encourage us to keep going past our existing competencies is helpful. Even in something as prosaic as weightlifting, I will never be as strong as I was in grad school, when I had a lifting partner who would push me to lift more than I thought I could – and it turned out I could do it. Now when I go to the gym, I don’t push myself anywhere near that hard, and therefore am not getting anywhere near the benefits.

Note that both feedback and motivation will eventually be internalized, and have to be internalized if one is to achieve mastery. Once I reach a certain point in skill development, I know what I’m doing right and wrong, and what I have to do to correct my mistakes. I also can get to the point where I don’t need external motivation because I am doing the skill for myself and can see how my practice and mistakes lead to improvement. But, boy, it’s difficult to get there, and having a coach to help with those aspects make it easier, especially at the start.

I realized as I was writing this that one of the challenges for me in my quest to become a generalist is the lack of coaching. There is nobody that can offer me instant feedback on what I’m doing, so I am in the inefficient mode of trial-and-error experimentation. And while I have been fairly committed to this path for several years now, it’s still difficult for me as I have few role models (Jerry Weinberg notwithstanding), and little in the way of formal encouragement. I don’t have a career path that I’m following, and while my position at work is enhanced by my generalist skills, they are not formally recognized, which is frustrating. I’m not sure what to do about this, but perhaps being aware of the difficulty will let me at least address the problems more directly.

Sorry for the long post – I originally had planned to split this post into one on tightening the feedback loop and another on coaching, but I feel like they work better together. Coyle’s framework is a useful way for me to think about these questions of mastery, and it integrates well with my previous thoughts on the subject. It also helps me to recognize that lessons might be the way to get me started on a new skill, rather than beating myself up for not having the discipline to start something on my own. Food for thought.

Drive, by Daniel Pink

Wednesday, January 20th, 2010

Drive book website
Amazon link

I really liked Pink’s TED talk on the “surprising science of motivation” where he says “There’s a mismatch between what science knows and what business does”. In particular, the compensation and motivation strategies currently used by businesses have been shown to undermine motivation rather than enhance it. So I’ve been interested in reading the book-length version of his argument, and managed to snag it from the library soon after release.

Alas, there’s not much more in the book than what’s in the TED video. So go watch that. Or read his “cocktail party summary”:

When it comes to motivation, there’s a gap between what science knows and what business does. Our current business operating system–which is built around external, carrot-and-stick motivators–doesn’t work and often does harm. We need an upgrade. And the science shows the way. This new approach has three essential elements: 1. Autonomy – the desire to direct our own lives. 2. Mastery — the urge to get better and better at something that matters. 3. Purpose — the yearning to do what we do in the service of something larger than ourselves.

I don’t have much to add beyond that, except to cheer him on. I think that creating new organizational cultures that trust people rather than processes is a goal towards which we should all be aspiring, even if I have no idea how to make that happen.

I also really liked his 2 questions video. The 2 questions:

  • What is your sentence? In other words, if you were forced to summarize your life’s work and accomplishments in one sentence, what would that sentence be? Distilling it to one sentence forces you to pick what your overall purpose is, rather than trying to do lots of things at once (says the generalist).
  • Was I better today than yesterday? After the sentence helps you define your purpose, each day is an opportunity to move closer to that purpose. Having a daily check-in forces us to question every day whether we’re making progress towards our goals. Or to put it another way, using a quote I found on Twitter, “If it’s important enough to you, you’ll find a way. If not, you’ll find an excuse.”

The weekday posts are going to be less thoughtful, but, hey, I’ve got a year’s backlog of books to review, so I can crank those out during the week, and hopefully I can continue digging into more meaty topics on the weekend.

The Design of Business, by Roger Martin

Tuesday, January 19th, 2010

Amazon link

I’m not sure where I heard about this book, but the subtitle, “Why Design Thinking is the Next Competitive Advantage”, pretty much sold me on at least checking it out, since I’m interested in both design and management. So I got it from the library and read it.

Martin frames business as operating in a “knowledge funnel”, which starts with a mystery, gets refined to a heuristic, and is instituted into an algorithm. He uses McDonald’s as an example of the knowledge funnel.

  • A mystery is a new niche or new problem that is not handled by existing solutions. People wander around in the mystery trying things to see if they can figure out something that might work. In the case of McDonald’s, the McDonald brothers were trying to figure out how a restaurant should work in a mobile car culture.

  • Once a partial solution has been found, it becomes a heuristic or rule-of-thumb. The heuristic is a frame that provides a useful way of thinking about the mystery that makes its solution tractable. It doesn’t guarantee results, but generates working solutions more often than not. The McDonald’s brothers created the idea of fast food as we know it, with reduced menu options, standardized cooking, and the drive-thru instead of the drive-in. But it was still dependent on the implementation at each new restaurant.
  • Once a heuristic has shown the way, the drive for efficiency begins, where the uncertainties of the heuristic are mapped out such that every element can be institutionalized as an algorithm. Once an algorithm exists, it can be standardized such that anybody can run it, or even automated by a computer. Ray Kroc bought the McDonald’s chain and compiled explicit instructions for every aspect of running a franchise, from how long to cook hamburgers, how often to clean the bathrooms, and even how to choose a new location.

The knowledge funnel is a nice little metaphor, but it is not a particularly new way of looking at things. Or maybe that’s just my overactive relational mind making connections everywhere, as I think that the knowledge funnel could be seen as another form of Latour’s Collective process or Moore’s Chasm.

Martin did articulate well how a company is often started around finding a heuristic to solve a mystery, and then spends the rest of its existence refining that heuristic into ever more efficient algorithms. But if the company isn’t careful, another company will find a new mystery that disrupts the original company’s business model (aka the innovator’s dilemma).

One of the reasons that companies get trapped into refining efficiency is that tackling mysteries is scary. Once a company is into the refining heuristic stage, decisions can be made analytically. Refinements can be tested to see if they are more efficient and reliable, so that cold, hard data removes the subjectivity of the heuristic.

Tackling new mysteries requires a leap away from the safety of data and reliability. Martin suggests that “validity” is a better way to think about such problems than reliability – a valid solution that works some of the time is more valuable than a less valid solution that works every time.

The rest of the book describes several case studies of companies that have successfully made the leap to “design thinking”, where attacking the next mystery is valued as much as refining the existing solution. His examples included:

  • P&G, which realized that it was better at the heuristic and algorithm phases of the knowledge funnel, so it set the goal of sourcing “half its product innovation from outside the company” to take advantage of its development engine.

  • RIM, the makers of Blackberry – I liked the description that the founders “realized RIM’s strengths lay in designing, building and marketing communications devices for busy people” which is a good mission statement since it is completely technology-independent
  • Herman Miller, the makers of the Aeron chair – where the CEO emphasized the independence of design to the point where he said “You never ask the sales force what they think of a design. Their job is to sell it.”

One suggestion I liked for companies to avoid ossifying around an existing algorithm was for companies to use a project oriented structure:

“In companies organized around ongoing, permanent tasks, roles are rigidly defined, with clear responsibilities and economic incentives linked tightly to those individual responsibilities. This structure discourages all but senior staff from seeing the big picture… to move along the knowledge funnel is by definition a project; it is a finite effort to move something from mystery to heuristic or from heuristic to algorithm. And such projects demand a business organized accordingly, with ad hoc teams and clearly delimited goals.

In other words, when your entire job is defined around a function, you will not welcome others who are trying to disrupt the status quo, even if that’s the right thing for the company. But if everybody works in a project-oriented mode as they do at design firms like Ideo, they will work towards finishing the current project, and moving onto the next.

Overall, this was a quick read with a few good anecdotes and a useful metaphor, but it’s not a book that I see myself buying for my permanent collection.

P.S. Using the cheat code of doing a book review for a blog post, since they don’t require as much thought. We’ll see how long I can keep this up.

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