I’ve spent the last week in a city that is itself a metaphor for leadership, rain dances and dream bubbles – Las Vegas. I’ve been showcasing Piero at NAB 2012 with our special ‘Pieros@Pieros’ event (Piero’s restaurant is not only a coincidental namesake to my company, but also an iconic Vegas restaurant, where scenes from Casino were shot). Like Vegas, faux leadership is also promise of riches with flash and sizzle, but really just a contrived scheme to slow bleed money from you. It would be great if all bass bosses were as clear delineated as the pointedy-haired manager in Dilbert. But the fact of the matter is that the real hazards are the bosses who seduce stakeholders with all the showy trappings of leadership with no intention or capability of every delivering.

I’ve illustrated various ‘rain dances’ that such false leaders perform, but what about the ‘rain dancers’ themselves. Here are a few rain dancers personas to be wary of who exhibit manifestations of Leadership and Management without doing much of either…

• Politicians – These people don’t concern themselves with either optimising the upside or minimising the downside *for the organisation*, but rather operate solely/primarily focused on their own personal gain or loss. The mob bosses of the executive world.
• Non-Execs – Unfortunately, the whole system of ‘Non-Executive Directors’ is so perverted against serious contribution to leadership or management that I have found in the vast majority of cases they are utterly useless. Let’s be clear, a Non-Exec is a plum position which has prestige (‘hey, I’m on the Board’), generous remuneration (thousands of pounds for a few hours work) and no operational responsibility (eg. no deadlines, no deliverables, little accountability). Very *few people rock that sweet gig* with challenging questions or demands. Most appointments are ‘political’ resembling the pragmatic royal court marriages of centuries past where alliances were made through betrothal (Hypercorp keeps well positioned in the industry by appointing exec from Megalith Inc.). The sugardaddied and toy boys of the executive world.
• Task Masters– These bosses don’t focus on either the upside or downside of the outcome because they *don’t really focus on outcomes* at all. They concern themselves with overseeing whether activity is done or not. They do not look at either the higher purpose nor the underlying means. The completion of an activity can have the appearance of and can even be correlated to an outcome, but the confusing the ‘activity’ with the ‘outcome’ is one of the rookie errors of leader/managers. The activity directors of the executive world.
• Cheerleaders– These bosses are all talk and style, but little substance. They may provide a degree of flash-in-the-pan *energizing* , but like a shot of espresso or Red Bull, but the impact is shallow and transient if not supported by more tangible and substantial stuff underneath it. The stage shows of the executive world.
  

The best way to handle any of these types in your organisation, either above you or below you in the hierarchy, is to steer clear of them firstly, but mostly always work focusing the attention on the real outcomes that provide substantive benefit to the organisation and the inherent opportunities and risks in achieving them.

Belated birthday Scott!

Great piece by Scott on black box complexity and embracing the failure of investments (a bit timely in the wake of the in-yo’-Facebook IPO)…

• “Definition of Withdumb: A quality you possess if you hold a popular and unfounded point of view… I see withdumb most often in the field of investing. Most investment choices are based on nothing more than the knowledge that other people do similar things. Lately I have started to wonder if the science of investing is any better than the science of astrology or the science of not eating a sandwich before swimming. I have a degree in economics and an MBA from a top university and I haven’t seen any convincing evidence that investing is more than a collection of elaborate scams… Someday we might look back at this era and see that what looked like successful investing by individuals was nothing more than correctly guessing the direction that criminals would manipulate the market.”

Hugh also praises relentlessness showcasing the artist David Shrigley…

• “Glasgow artist, David Shrigley is one of my favorite cartoonists. And I have very few of those. Unlike a lot of my cartoonist heroes (Steinberg, Gorey etc) David can’t draw to save his life, at least, not in the conventional sense. His formal drafting skills (the ones he chooses to show the world, anyway) are just plain bad. I mean, REALLY bad. And you know what? It doesn’t matter. Actually, it may even be a good thing. You see, the whole point of Dave’s work is NOT about the drawing. It’s ALL about his ideas. And his VERY crude drawings work brilliantly for that. In fact, I’d wager that if his drafting skills were more formally developed, his cartoons wouldn’t be nearly as sharp, as interesting or wickedly subversive. His is a great example of what I like to call “circumventing one’s limitations”. Turning weaknesses into strength. Shrigley is a master of that, he really is. And yes, I think if you’re to achieve mastery in your craft, your job or your career, you have to learn how to do what David did: Circumvent. You also have to be determined and relentless. David is all that as well, as this interview nicely demonstrates. Even if you can’t draw to save your life. Even if you didn’t go to the right university. Even if you’re not that good at making money. Even if you have an average IQ. Even if you can’t get venture funding. Even if you weren’t born insanely talented at something. Even if you have to wait tables or bartend for a couple of years. Circumvent, relentlessly.”

Hugh’s commentary reminded me of my other favourite cartoon artist (aside from Hugh), Scott Adams. Scott also makes no qualms about the limitations of his drawing skills…

• “My little window of talent involves selecting the right words to make things sound either funny or compelling. I’ll get to that in a minute. My job also involves drawing, but that’s not so much a talent (obviously) as it is a simple skill that I developed through practice. If I have any talent in that area, it involves knowing how to make the drawings fit the way I write. I could draw in a lot of different styles, albeit just as poorly as the one I use now, but my current style might be the only one that fits my writing.”

With 2,695 shows from 47 countries in 279 venues, beware that going to the Edinburgh Fringe is a bit of a crap shot. If you get lucky, you uncover some real unsung gems. But if the show producers get lucky, then they might be on to something ‘craptastic.’

That’s the genius term by Scott Adams for an ‘crappy’ idea that serves as the seed, catalyst or scaffolding for a subsequent better idea.

• “I like to think that the bad ideas I describe in this blog might someday inspire one of you to come up with actual good ideas. That’s how ideas evolve; you start with bad ones then tweak them. If I may borrow and modify a quote from Isaac Newton: If you can see further it is only because you’re standing on the pile of manure I so generously provided. Bad ideas are the raw materials for good ideas. I use bad ideas as the basis for writing comics too. Every Dilbert comic that made someone chortle started out as a bad idea that I tweaked and poked and molded into something that I wouldn’t have expected at the start. Sometimes the end product retains the germ of the original idea, sometimes it drifts into something entirely different. One of the big secrets to creativity is that you have to start walking before you decide where you’re going. It’s opposite of how you’re raised to think.”

Many of the shows at the Fringe use the event as a platform for just that sort of field test.  Some emerge with glowing reviews.  Others go back to the drawing board for something that eventually does shine.

The cartoon above was Scott’s very first which launched both improvements to an iconic status of humorous social commentary in the workplace fed on reader feedback.

Craptastic!

Four years ago today the world witnessed one of the biggest corporate failures of all time ushering in a new age of persistent failure that haunts us today. Lehman Brothers embraced vulnerability a bit too far, and sadly at everyone else expense. They were not the sole or even the main cause of the economic meltdown and subsequent malaise, but they were the poster child for it.

While I praise President Obama’s Leadership and Management, and I appreciate the fact that job #1 is keeping the economy afloat (necessitating measures like TARP). Nonetheless, one criticism I have of his administration is he has not done enough to embrace the failure of badly behaving banks. Not enough to let even more banks go under. Not enough to let more bank executives feel the downside of their failed management.

John Lanchester’ book ‘Whoops! Why Everyone Owes Everyone and No One Can Pay’ dissects the dynamics and delves into the details of this economic failure decades long in the making…

• “Without getting into technicalities — the credit default swaps and other arcana that were at the heart of the crisis — the answer can be summed up in a single word: risk. Moneymen don’t see risk in the same way that civilians do. To most of us, risk is for the most part a bad thing; at best, it’s something we seek out under specific circumstances, to generate a feeling that things are just dangerous enough to be exciting. In the world of money, risk is different: it’s desirable. It’s a basic law of money that risk is correlated to reward — the amount of money you can make is determined by the amount of risk you are willing to take on. But humans, even expert humans, are chronically prone to make certain sorts of cognitive mistakes. We have hard-wired difficulties with probability and risk that go very deep. The bankers made inaccurate calculations about the mathematics of risk. They thought they had engineered risk out of existence. That mistake destroyed banks, forced others into public ownership, put taxpayers on the hook for hundreds of billions of pounds and brought the world financial system to a juddering, panicky standstill.”

In short, the banks miscalculated that they had engineered away failure. Jay P. Greene’s post In Defence of Failure provides an articulate prescription to Lanchester’s diagnosis…

• “Conversely, if these firms had instead been allowed to fail by going bankrupt nothing would have been destroyed. All of the financial capital held by these firms would still exist. And all of the human capital of the people who works for those firms would still exist. Bankruptcy doesn’t mean that you take all of the capital of a firm, put it in a pile, and blow it up. It’s all still there. What bankruptcy does is it forces people to reorganize what they will do with that financial and human capital. That is, they are forces to recognize their failure and figure out a better way to do things. And even more importantly, failure forces people involved with these firms to experience the consequences of their actions. Those people — and everyone else — learns from those consequences and hopefully changes their behavior in the future. To prevent failure is to prevent learning.”

We need an adaptation of John Lennon’s classic ballad of acceptance, but perhaps a bit more explicit for the politicians’ sake…

• When I find myself in times of trouble, Mother Mary comes to me
  Speaking words of wisdom, let it fail
  And in my hour of darkness she is standing right in front of me
  Speaking words of wisdom, let it fail…
  And when the broken hearted people living in the world agree
  There will be an answer, let it fail…
  For though they may be parted, there is still a chance that they will see
  There will be an answer, let it fail…

While America clamours for the final few days to choose a Leader, I contend that Job #1 for government and its executive is Management. For all the talk of who promises better ‘Leadership’, it is the Management that concerns me.

Presidents (including Presidents of companies) can do a lot to screw things up, but fixing and improving things is a lot harder. The same is true for companies, sports team and so many enterprises. Like sanding a piece of wood, it takes 20 strokes to sand out one faulty stroke against the grain. ‘Leadership’ has a more exalted ring to it, but in reality good ‘Management’ is 20 times more important.

Viewing Management as the ‘minimisation of downside’, Job 1 of government really is to keep the citizens safe from these downsides. Protection from insiders (police). Protection from outsiders (military). Protection from nature (emergency services). The Founding Fathers appreciated this imperative. The Bill of Rights is not a declaration of possibilities, but of protections.

A certain degree of commerce regulation is just a natural extension of ‘policing’. Not all theft is an overt mugging. Certain government safety-nets are just an extension to ‘rescue services’. It’s not just fire hoses and Coast Guard that people need to blunt the effects of calamity.

In the Age of Black Boxes (see below), this role of protection becomes ever harder as ‘thieving’ becomes ever more opaque. As the government finds ways to clamp down on Ponzi schemes, big banks find ways to mask their manipulation in complex instruments shrouded by a battalion of lawyers and economists (see above).

This need for management oversight is one of my primary reasons for supporting Obama’s candidacy. I think that he is, in his principles and track-record practice, more focused on guarding theft in society especially by the stronger from the weaker. He has demonstrated his management skills throughout his first term – winding down of the American involvements Iraq and Afghanistan without surrender, keeping the American economy from disaster with TARP, keeping the auto industry from dissolution support, and recently with his compassionate, focused coordination of the Sandy response. He did deliver change we can believe in by changing the focus of Washington to better protection of it citizens and better management of its affairs.

The ‘Black Box’ is a something whose complexity precludes comprehension of its inner workings. I’ve explored all sorts of ‘Black Boxes’ to date. One big category of Black Box in the workplace are specialist experts. And managing such experts can be the biggest challenge that a leader ever faces. Working in the field of technology 30 years now, I have immersed myself in the world of incessant complexity. Complexity is not the exclusive domain of technology, but it is hard to find an innovative technological enterprise that is not drenched in it. Complexity exists in all sorts of fields especially those with specialist domain knowledge. The following are a few dynamics I have identified where team members try desperately to Black-Box-ify their work so as to keep the upper hand over their manager and other stakeholders…

• Technobabble Gambit – “If you can’t explain the problem to me like I’m a kindergartener, that’s your problem, not mine.” All sorts of domain so-called experts often use big words as a weapon to ward off encroachments into their cosy existences. The stereotypical example is the contractor/plumber/mechanic who baffles with bullsh*t to charge more (<deep intake of breath> “I’m afraid the manifold transgression to the spar pump is mangroving. We can fix it with a new flatulence credenza, but it’ll cost ya.”). Such big words are particularly effective against managers who don’t want to appear as if someone less senior to them knows more than they do. So rather than admitting that they have no idea what the team member is talking about, they nod politely with a stern brow of thespian comprehension and conclude with “Hmm…well carry on then.” The majority of the time, I find that someone using big words actually doesn’t understand what’s going on either. REMEDY: The art of precision questioning allows only precision answers. Don’t stop until you understand.
• Data Grenade Tactic – “Close doesn’t count except in horseshoes and hand grenades.”  Unfortunately, too many managers think ‘close’ is good enough when it comes to KPIs and other indicators of how things are going.  They ask for 27 data points, when there are really only about 3 that really matter.  The first problem is that they don’t understand the black box well enough to determine which 3 really matter. Then, they collect lots of the other data points, but none of the few that do matter.  On the face of it everything looks fine and under control.  Lots of data about the project.  The problem is not only are the 3 key things missing, but really they’ve wasted the team’s time collecting 24 other KPIs that aren’t essential.  REMEDY:  Minimize the quantity of data requested from staff, and maximize the discipline around and the quality of the few pieces of data that you do collect.
• Prima Donna Syndrome – “Great work does not excuse bad work.”  Paradoxically, a large number of problems come from staff who are otherwise described as valuable or talented team members. Often that value is derived from wizard-like, privileged understanding of the Black Box’s inner workings. What I observe is that these staff feel that their great work in some areas buys them the ability to be slack in others.  Sometimes they think that they are indispensable to the organization so they can get away with more because the organisation wouldn’t dare fire them or even risk pissing them off.  Too many Line Managers do fall into this trap of indispensability possibly aggravated by the pressures for tight staffing levels and a business that often has strict performance criteria.  Very often prima donnas are veteran staff who confuse their depth of ‘experience’ and with depth of ‘expertise’.  Often I observe a sense of entitlement where they feel that their seniority should merit greater rewards or prerogative.  REMEDY:  Avoid being held hostage to indispensability by fostering redundancy of skills and responsibilities.  Manage the behaviours and outcomes, not the person.
• Licking the Hand that Feeds – “Dr. Jekyl and Mr. Hyde.” When people across the organization complain about an individual’s cooperation, the Line Manager responds that it must either be an isolated incident or it must be the person reporting the problem who is a fault because the Line Manager never has any problems with that worker. Sort of a corollary to the ‘Prima Donna Syndrome’ (‘My great work for my manager excuses my crap work to everyone else’). The corollary to the “Not My Job” syndrome is the “Not My Manager” attitude. This is when the team member understands which side his bread is buttered on. As a result, they perform dutifully to every request from their manager, but atrociously to everyone else in the organization. This issue become problematic when organisation complexities extend across teams and unpicking the break points by management becomes intractable. REMEDY: Managers must solicit 360 feedback and cross-group collaboration must be weighed as highly as directly assigned tasks in their performance reviews.
• The Big Rug of Complexity – “The best place to hide dirt is the room with the biggest rug.”  Sloppiness in time keeping and KPI management is directly proportional to the size and complexity of a project.  The bigger the project, the greater the sense that “no one will notice” or “the project can afford a few extra hours or a few missed reports.”  The problem is those little bits add up.  The problem is compounded by the sense of “they are paying my salary anyway and it’s all one company so who really cares what I bill to.” 

The embrace of darkness in full public view is a magic power that even Harry Potter might envy.

Scott Adams’ dubs such shame resilience more than a useful coping tool, but rather one of the ‘Ordinary Superpowers’…

• “I define an ordinary super power as any useful ability that very few humans possess. For example, having a spectacular voice that commands attention is like a super power. So is being ridiculously attractive, insanely smart, highly energetic, artistic, and so on.., and yes, I have one. I would nominate for my preferred ordinary super power the ability to not feel embarrassment…The good news is that one can learn to control embarrassment. You simply need to experience it so many times that you get used to it. In my case, my natural personality is shy, and as a kid I embarrassed easily. But I’ve learned through practice to power through most of my embarrassments. And that’s a good thing because embarrassment is a routine part of my job. Take this blog. What I enjoy most about it is that there is no editor between you and me. The downside is that you see my spelling errors, grammar mistakes, and dumbass ideas in their raw form. I barely go a day without embarrassing myself in public. But at this point in my life, blog-related embarrassments don’t feel any more psychologically painful than looking in the mirror and seeing that I need a haircut. It’s just stuff. I’m not totally immune to embarrassment, but I’m working toward it. Of all the ordinary super powers, enduring embarrassment is the one that an ordinary person can most easily develop. I will never have a radio-quality voice, or suddenly become tall and attractive. But I can learn to endure embarrassment, and that has a tremendous economic value. Imagine being able to talk to anyone, and ask for any favor or resource, without fear of rejection or embarrassment. 99% of people you talk to could give you the stink-eye and you’d still become a billionaire because of the few that cooperated.”

I guess it’s a bit obvious that I would guess my ‘ordinary superpower’ to be ‘embracing failure’. Not merely the courage to do so, but also the adeptness to do it well. Sort of like risk taking. It’s not just about the bravery to take risks, but also about the savvy to take intelligent risks (‘risk taking’ is just a variant of ‘embracing failure’ since a ‘risk’ is just a ‘failure probability’). It’s not quite the same as ‘enduring embarrassment’. I still can get embarrassed and simply consider it part of the downside to a failure. But the two are close.

Workers of the world unite!

Among the various calls for bettering the plight of workers on today’s International Workers Day should be a demand for better leadership and management. Inc’s “The 5 Qualities of Remarkable Bosses” provides an outline starting point for any manifesto on this subject. In particular, point #3 rings with the spirit of embracing failure…

• “3. Rescue your worst employee. Almost every business has at least one employee who has fallen out of grace: Publicly failed to complete a task, lost his cool in a meeting, or just can’t seem to keep up. Over time that employee comes to be seen by his peers—and by you—as a weak link. While that employee may desperately want to “rehabilitate” himself, it’s almost impossible. The weight of team disapproval is too heavy for one person to move. But it’s not too heavy for you. Before you remove your weak link from the chain, put your full effort into trying to rescue that person instead. Say, ‘John, I know you’ve been struggling but I also know you’re trying. Let’s find ways together that can get you where you need to be.’ Express confidence. Be reassuring. Most of all, tell him you’ll be there every step of the way. Don’t relax your standards. Just step up the mentoring and coaching you provide. If that seems like too much work for too little potential outcome, think of it this way. Your remarkable employees don’t need a lot of your time; they’re remarkable because they already have these qualities. If you’re lucky, you can get a few percentage points of extra performance from them. But a struggling employee has tons of upside; rescue him and you make a tremendous difference. Granted, sometimes it won’t work out. When it doesn’t, don’t worry about it.  The effort is its own reward. And occasionally an employee will succeed—and you will have made a tremendous difference in a person’s professional and personal life.”

The sentiment is one exhibited by a sergeant who is the last one over the bridge, the captain who is the last one off the boat. It stands in stark contrast the cliché prescription of ‘firing your bottom 10%’ with robotic regularity. A prescription that only the most inept leaders/managers resort to when they have no real clue how to monitor and manager performance. Instead they opt for a human roulette wheel.

• “Leadership requires ‘an absence of shame around personal failures and imperfections’.

Being ridiculously remarkable, means being shameless about ridicule.

Friend and digital cohort on the subject of Leadership, Dr. Bret Simmons, buttressed Hugh’s perspective with the recent Tweet above. It is an excerpt from a book he recommends by Justin Menkes called “Better Under Pressure: How Great Leaders Bring Out the Best in Themselves and Others” It unites not just the Leadership/Management and embracing failure themes here, but also the issue of ‘black box’ complexity…

• “When you as a leader possess the kind of humility that enables your awareness of true circumstances, you can face all kinds of stimuli, from negative personal feedback to challenging market fluctuations to employees’ or customers’ emotional reactions, without experiencing personal disruption. This utter absence of shame around your miscalculations or outright failures is the critical differentiator of someone acutely in touch with actual circumstances and someone who is not.”

This humility is what Scott Adams was talking about with his ‘ordinary superpower’ of ‘enduring embarrassment’ is particularly useful for a leader…

“My observation is that people such as Richard Branson or Elvis, or just about anyone famous, has willingly taken on a career that promises a lot of raised eyebrows, shaming, humiliation, and ego attacks. Some people shrug off that sort of stuff. They have that ordinary super power. And it makes success more likely because they get to compete against a smaller field. My hypothesis is that people who display a lack of embarrassment are seen by others as natural leaders. I suppose a lack of embarrassment looks like a form of bravery, and we’re wired to respond to it. When someone gives a speech to thousands, and shows no signs of nervousness, their confidence affects us. We assume good things about a person who is so cool under pressure. And when someone does something monumentally embarrassing, and shrugs it off with a smirk and a twinkle in the eye, we are in awe.”

It’s all very well to exhort people to ‘learn from the failures’, but HOW exactly do you do that. Well, CBS Money Watch offered several tips in its piece ‘Bad job interview? 4 good ways to learn from it’…

• Laugh it off – Sometimes, you’re just not on your game.
• Inventory the experience on paper – Make sure to identify at least one thing that can be improved, and one thing that you nailed. Then, take the piece of paper, crumple it up and throw it out. Time to move on.
• Bring in a professional – If you’re stumped as to why you aren’t impressing hiring managers once you’re in the door, consider getting a consultation with an interviewing specialist. ".
• Keep moving — and move on – At the very least, treat yourself as you’d treat your best friend if they had a bad day and do something relaxing that you enjoy.

Possible the most failure fraught models (models seem to be my theme of the week) are the financial ones. My first two jobs were writing complex financial models. Curiously, my very first assigned was writing one of the first every models of financial risk to mortgage default. So I have a pretty intimate appreciation for how problematic they are in representing reality never mind predicting its future. Models are great tools for building understanding of dynamics – eg. directions, sensitivities, relative impacts. But for pegging absolutes, their weak track records speak for themselves.

Macrobusiness’ article ‘The Insufferable Conceit’ (thanks Chris) articulates the failures inherent in most financial models.

• “Two problems plague the analysis of the financial system, problems that are related. Let’s call them the twin delusions. One is the persistent use of metaphors to characterise what is happening in the markets by people who do not seem to understand what a metaphor is, so they are seduced by them. The second is the mathematicisation of transactions, which creates the illusion that ‘the system’ can be analysed as if it is like a physical system subject to scientific laws. Let’s go to some basic definitions — to quote Marcus Aurelius: “What is it, what does it do?” Financial and economic markets are transactions. GDP, for instance, is not an indicator of wealth, or consumption, or growth. It is a recording of transactions. If there is a property bubble, for instance, consumption and wealth might actually fall, as people transact more aggressively over an existing stock of dwellings. I can remember an economist was asked by the Nebraska state government how to raise the state’s GDP. His response was: ‘Well, you could burn down the Capitol building.’ He was right, of course. That is why, for instance, GDP in Japan rose after their tsunami. As people cleaned up the mess, they transacted more. This is where the twin delusions hit. To characterise transactions, metaphors are created, or the transactions are turned into a metaphor. So, we talk of national GDP as if it is a metaphor for the nation. ‘Australia’s GDP went up 3%” = ‘Australia is doing well.’

Metaphors are used to help explain one part of a complex thing through simplification. To say a “leader is like a steering wheel” helps to put an abstract concept (“leader”) into concrete terms (“steering wheel”). It is a means of short-hand to describe the dynamic of one piece of a complex mechanism influencing the direction of the rest of the mechanism. But a ‘leader’ is not a ‘steering wheel.’ The whole point of using metaphor is for the sake of simplification. And in that simplification, many other attributes that a “leader” would have are lost. Just like when a summary statistic is entered into a financial model instead of representing every instance of financial activity. The statistic is a simplification, but it is not the activity. As Aurelius would say, it is not ‘what it is, what it does’.

The veil of authenticity in financial models is not just the by-product of hyper-active rocket-scientists’ spreadsheets. Instead, it extends right down to the most fundamental component of finance and our society…money itself.

One of the skills that sets humans apart from animals is our ability for abstraction.  To conceive of something as a model or principle outside of the physical world fuels our ability to create and invent.  But the animal in us (our ‘lizard brain’) still finds the physical world much, much easier to comprehend and fathom.  Understanding built on the senses and experience.  Perhaps the first thing ever ‘abstracted’ is ‘value’ or ‘money’. 

Virtualising value introduced massive economic benefits.  If you wanted to trade a chicken for a pig, you didn’t have to lug the chicken and pig around.  You could ‘store’ the value (more safely than the chicken or an apple with a limited shelf life).  But the trick to getting everyone’s head around this first step to virtualisation was the ‘money’ itself.  Coin of the realm.  Legal tender.  Physical tokens which made the mapping of the ‘value representation’ to the ‘value thing’ easier.  You might not have a chicken in your hands, but you had a piece of metal or paper which was still physical. 

And now even that value is becoming more ‘virtual’.  Less a physical token, than a balance on a card or credits in an account.  A number in a computer. This approach has great benefit in convenience and versatility…but it is also the coming of age of the Black Boxification of Money.

The lack of an appreciation for what money is and isn’t under the hood lends itself to abuse of this powerful tool. In a process not to dissimilar to snake-oil salespeople exploiting the power of science (the workings underneath that their marks don’t properly understand) to hawk their quack potions…

• “I think Greed and Wall Street have been bedfellows as long as Wall Street has existed. What, I think, is new is the way the ‘pathology’ is concealed. It is easy to cover up greed and its immorality by either deploying a metaphor – these are the way the capital ‘flows’ are going and we have to invest accordingly – or by creating a mathematical equation. In both cases the activity is pushed one step away from what it is – an activity between humans – and so decoupled from anything human such as morality, or ethics or what is good for society. By being denuded of its human element, scientised, as it were, the question of personal responsibility is removed. In other words, the greed is not new. It is the sophistication of the cover up that is new.”

The abstraction not only divorces the token from its inherent ‘value’, but it then ultimate starts to alienate it from ‘values’.

The simple corner shop has literally become a labyrinth of manipulative options designed to baffle to the customer until maximum wallet extraction can be achieved. And today’s Black Friday is not just the celebration of that merchandising, but also the pinnacle of retailer manipulation to confused and befuddle shoppers out of their money.

The Cassandra of complexity, Scott Adams, illustrated this marketplace mayhem in his post “I Want My Cheese” (it also puts into context one of the most misguided ecological initiatives of banning plastic shopping bags)…

• “Then I start looking for cheese, only to discover that some genius in Safeway’s marketing department thinks that cheese should be spread out over about seven different locations throughout the store. You have your cottage cheese here, your artisanal cheeses there, your shredded cheeses somewhere else, and so on. There is no logical order to any of it. Five minutes into my shopping, I am filled with rage and I feel manipulated. I assume someone at Safeway decided that inconveniencing me would somehow make me buy more shit because I end up walking down every frickin’ aisle in the store looking for my cheese. It’s not the inconvenience that bugs me so much as the feeling of manipulation… By the time I reach my car I feel frustrated, angry, guilty, stupid, incompetent, belittled, weak, humiliated, ripped off, and inconvenienced. The feeling lasts until I get home and my wife says, ‘That’s the wrong cheese.’ That feeling pretty much replaces all the other ones.”

The worst example is our local Nottcutts. They have contrived a quarter mile long one way system to force you to examine 90% of their shelves before you can get your birdseed and check out with it. They force you to walk a 100 yards from the parking lot to the entrance to starts this onslaught odyssey while prohibiting you form entering the shop at the big set of doors right by the lot.

Seth Godin has his own tirade on this commercial contrivances in his post “#BlackFriday = media trap”: “Retailers offer very little in the way of actual discounts, they expose human panic and greed, and it’s all sort of ridiculous if not soul-robbing.”

And for a comprehensive treatise on the Black (Box) Arts of shop front manipulation, check out Paco Underhill’s fine book ”Why We Buy”…

“You almost have to make an effort to avoid shopping today. Stay out of stores and museums and theme restaurants and you are still face-to-face with Internet shopping 24 hours a day, 7 days a week, along with its low-rent cousin, home shopping on TV, Have to steer clear of your own mailbox, too, if you are going to duck all those catalogs. As a result, every expert agrees, we are now dangerously over-retailed – too much is for sale, through to many outlets.”

Un-Happy Shopping everyone!

Today is supposed to be unlucky.

One of my other blogs, the smallest and most whimsical, is “70-20-10”. It stemmed from reflections on the “pareto optimal” concept, often known colloquially as the “80-20” rule. I thought that there were lots of diverse applications of pareto optimal, but I thought a more accurate model was “70-20-10” Over the years, I have identified and stumbled across a number of disciplines where this model applied. And recent reflections on ‘success’ and ‘failure’ has brought it to the fore again.

In short, I kept coming back to 3 major components of most any significant success.

1. Hard Work
2. Creativity/Insight
3. Luck

Malcolm Gladwell has popularised foremost with the ’10,000 Hour’ mystique which has been alternately reinforced and debunked. I think that the contrarians have a point. That it’s not JUST the 10k hours that makes the difference. There are plenty of counterfactuals around of people who have put in well over that threshold and are nowhere near world class. As well as plenty who have put in much less and yet find themselves at the top of their game.

The question is which is the “70”, the “20” and the “10”. I actually think that depends. It depends on the context. In “anti-fragile” situations, much of the volatility is engineered out giving “Hard Work” a much stronger role. Whereas in “Fragile” situations, “Luck” is a much bigger role. In “Fooled by Randomness”, Taleb seems to ascribe a “70%” majority share to basic “Luck” for professions as revered as trading. The important point is for people (especially Leaders and Managers who are responsible for the role of “Luck”) is to be cognizant of these ingredients and to consider how much each plays in every decision or initiative they undertake. All too many people will tend to ascribe their successes to the first two and their failures to the lattermost.

Good luck.

Merry Christmas and may all your failures be generous gifts of insight and resilience.

Both of the divisions that I manage employ Agile development methodology for their technology development. Practicing there what I preach here, at the heart of Agile development lies a steadfast embrace of failure as Paul Widel describes in this post “To Err is Human, to Accept That to Err is Human is Agile”…

• “Agility, and this is my definition, is accepting that mistakes will be made. The mistakes are then drivers that present an opportunity to change the way that a team works to accomplish their goals. To me that’s it. Take what you’re doing and regularly question and evaluate how it’s working and be willing to try alternatives. If something isn’t working, make a change and see if it works better. Iterations are conducive to agility because they embed a mechanism for reevaluation into the process. Having an iteration though doesn’t make the process agile if the process isn’t adaptable…As humans, I think we shun failure. We hate it. We hate to lose and we hate to fail. Fear of failure drives many of us to go through extraordinary efforts to perceive ourselves and to be perceived as successful. Instead of fearing failure I believe that we should embrace it. Failure can be a wonderful learning experience. The key to embracing failure is to make the failures uncostly and educational. Small failures can drive changes that add big value. Being agile is recognizing, embracing, and accepting small failures and using them as a waypoint for improvement. Celebrate your failures and use them to your advantage and you will be agile.”

Agile development is not just about adapting to changing in schedule, interdependencies and uncovered considerations. They can also be about resilience to the work environment around the development team. Yes, the development team will love to moan about everything that doesn’t work that way it “should” (I certainly did when I was a developer), but as Jeremy Zawodny points out in his piece “Expecting to Fail”, those shortcomings can result in some of the system’s greatest strengths…

“A few days ago, after the latest in a seemingly never ending string of problems that interrupted connectivity between two of our data centers, coworker #1 said something like ‘why can’t we have a network that just works?!’ The exasperation in his voice is something we all felt to some degree or another. Moments later coworker #2 piped up and said “if our network was perfect, the software you write wouldn’t be nearly as robust.’ There’s a lot of truth to that. I find myself writing software a bit differently now than I did seven or eight years ago, even though I was working on high-traffic web sites then and still am now. The single biggest difference is that I try to expect everything to fail. Everything.”

Zawodny goes onto provide a catalogue of tools and techniques for software technicians embracing failure…

• Redundancy
• Locality
• Caching
• Timeouts
• Logging
• Monitoring

I would add a seventh…idiot proofing tests. At Piero, we regularly invite high school students in for work experience to have them bash on our system. We sit them down with no training, just a user manual, and we say ‘get the system to work’. As they work through the steps in the guide, they hit instructions that aren’t clear, ambiguous references and inconsistent steps. We note every obstacle they hit and then make a task to either fix the documentation or improve the usability of the system. This approach (among other rigorous steps) has been critical to making the system easy to use for customers who don’t speak English as a primary language. This group is over half of our installed base and the training sessions are often inadequate to get people fully skilled up on their own. The bonus dividend is that with usability targeted for the lowest common denominator, the system is astonishingly fast and easy to use for more proficient professionals with more experience and practice.

Adams regularly explores the disconnect between how we see the world and how it really operates. His post “The Monty Hall Problem and Schrodinger’s Cat” illustrates this conundrum well…

• “This reminds me of the Schrodinger’s Cat thought experiment in which a cat in a sealed box (presumably with air holes) exists in a state of being simultaneously alive and dead depending on the results of a randomized event happening inside the box. How can a cat be alive and dead at the same time? Math says it can happen, my brain says no. The pattern recognition part of my brain is connecting the Monty Hall problem with the Shrodinger’s Cat thought experiment because both situations feel like proof that our brains are not equipped to understand reality at its most basic level. Most of us accept the idea that math is a better indicator of truth than our buggy personal perceptions. Math doesn’t lie, but our brains are huge scam artists. The Monty Hall problem and Schrodinger’s Cat are examples in which our perceptions of reality and the math of reality disagree in a big way. It makes me wonder how much of the rest of my so-called reality disagrees with math without me knowing.”

Adams has even made this characteristic of human nature a central tenet of his semi-apocryphal political platform in this week’s post “The Joiner’s Dilemma”. It actually seems more like a manifesto for a “Skeptic Party” embracing the failure of one’s position at the highest level of government…

• “It turns out that people rationalize whatever their political party supports independent of the facts…My idea is that as President of the United States I would support the majority opinion on every topic with my veto powers and my legislative initiatives while vigorously supporting the argument of the opposite side.”

Scott Adams’ post “My Skeptical Journey” is autobiography of sceptical doubt that only seems to intensify and expand as his life goes on. In a transparently public confessional, he provides an open viewing to practicing what he preaches…

• “A rational mind needs regular maintenance. One of the maintenance systems I employ is to remind myself of things I used to be sure about and later discovered to be untrue. I started a list organized by the approximate ages at which I realized my errors. A healthy rational mind needs regular doses of humility. (I might need more humility than most people.) Here is the approximate age at which I stopped believing in different stuff…”

He then goes on to catalogue 42 different things he has stopped believing in from the age of 8 to 50+. Many of his failure of his confessions of failed models and notions paralleled my own – childhood fairy tale myths, open-mindedness to paranormal phenomenon, vitamin supplements, the legitimacy of the stock market. Some of his shifts I myself haven’t come to yet mostly in the area of sport (eg. “Exercising is a big help for losing weight…Stretching helps athletic performance.”). I suspect that his experience in exercising is focused on certain types and approaches where possibly these general principles don’t specifically apply as strongly.

My own confessional of beliefs that I stopped believing in include…

• Teens – Politics is a noble career.
• 20s – Ignorance of the devout.
• 30s – Sales is a shallow discipline.
• 40s – Microsoft.
• 50s – Flying superstitions (more of a meditation as way to relax myself, but after the Skeptics in the Pub session on superstition, I decided to drop it).

One of my most fundamental disillusionments throughout my life has been about the nature of reality itself. Books such as “Godel, Escher, Bach” and “Thinking Fast and Slow” opened my eyes to how deceptive my own eyes can be.