Why Corporations Undervalue Your Contribution

Capital managers have always viewed companies as collections of assets rather than employees, but over the last 30 years this mentality has become an unfortunate, unquestioned part of our mainstream culture. The viewpoint didn’t really become real for me until I took my MBA finance class, a class which teaches decision-making based on a company’s financial status. I was amazed how different the world looks when you only care about the books.

For those people who are unfamiliar, there are a few basic financial statements that all public companies release quarterly. One is the balance sheet, which shows a snapshot of everything the company owns and how much of those assets can be claimed by creditors versus stockholders. The other major one is the income statement, which matches a company’s revenues to the expenses that generated those revenues.

Here’s what I finally understood from taking this class: if you evaluate a company only by these statements, you have different inclinations than if you work for that company and know the employees personally.

Swarm Intelligence: Is the Group Really Smarter?

Swarm Intelligence, or Swarm Theory, is the collective behavior of decentralized, self-organizing systems: ants in a colony, movie raters at Rotten Tomatoes, participants in a market economy, etc. By observing these systems in nature, scientists have theorized that such systems harness a sort of leaderless, collective intelligence. By leveraging these kinds of consensus-based systems, groups of independently-acting agents can solve problems more efficiently than they could if they were centrally controlled.

Ants, for example, do not use any kind of centralized management in their colonies. Organization happens organically, through millions of interactions between individual ants who are following very simple behavior rules. Some are patrollers, some are foragers, some perform maintenance, some collect waste, and so on. A forager will not leave the colony to go find food until it’s bumped into at least four patrollers and the interactions are no more than ten second apart. The fact that these patrollers have returned alive from the same area are the cue that it’s safe to travel to that area to forage for food.

Bees choose their next hive location using a similar, self-organized system. Scout bees will fly out in all directions looking for new hive locations. When a scout finds an interesting piece of real estate, it flies back to the hive to let the other bees know about his find. It communicates to other scouts using physical motion both the location of the potential new home and his enthusiasm for it (the goodness of fit). Soon, scout bees start assembling at four or five potential new hive locations. Consensus is reached once fifteen bees arrive at any single location. Those fifteen bees will then fly back to the hive to signal that the new hive location has been chosen.

Scientists started looking at this kind of theory as early as the 40’s (John Van Neumann and John Conway did the first theoretical work on “self-replicating automatons”). The field exploded in the last twenty years with the rise of computer science and the Internet. Swarm Theory lends itself perfectly to Artificial Intelligence. Computer learning is based on cycles of testing, valuation, and reiteration using simple heuristics and leveraging computational brute force. This is analogous to leveraging the many thousands of simply-programmed individual agents within a swarm. Google uses a variation of Swarm Theory to discern authorities and rank pages.

Swarm Theory was popularized in 2007, in a National Geographic article: I also spoke briefly about Swarm Intelligence in a previous article called The Superstar Trap.

There are many examples of how society has leveraged this idea, even before we knew what it was. Adam Smith’s Invisible Hand works through the collective intelligence of Swarm Theory. Market valuation is a perfect problem for this particular structure, and the fall of the Soviet Union became a great validator of the collective wisdom of decentralized markets compared with command economies.

Where Genius Comes From

“Edwin Land once told me that those people who can stand at the intersection of the humanities and science…are the people who can change the world.”

–Walter Isaacson quoting Steve Jobs

“I am here to stop your heart…. I am here to make you think…. I am not here to make pretty pictures!”

–Mark Rothko, in Red

Our reaction to Steve Jobs’s passing is uncanny for two reasons:

First, we’ve never before expressed so immense a grief for someone in the field of technology. We’ve seen emotional reactions to the passing of icons like Princess Diana and Michael Jackson, but it’s hard to imagine similar reactions for technology innovators. Could you picture the same reaction to the passing of Sergey Brin, even though our lives would be significantly different without the search engine he invented?

Second, most of the reaction has been laudatory, despite what we know of the man’s darker side. For every striking, almost hypnotically satisfying new invention he gave us, there were five stories about how he would embarrass, crush, humiliate, deride, browbeat, or publicly fire those around him. These stories were never denied or even mitigated. Given this very strong aspect of his nature, our elegies seem like cognitive dissonance on an epic scale.

It turns out that this seeming disconnect does not come from some irrational or misguided place. It comes from the frame in which we think about this man, and what he actually represents to us.

Steve Jobs may have founded a computer company, but he was not, fundamentally, a technology innovator. He was an artist, whose medium of choice just happened to be technology. Seen through this lens, we begin to understand the man’s singularity.

The Silicon Valley types have similar DNA, which makes it relatively easy for us to paint people like Brin, Bill Gates, Larry Page, and Mark Zuckerberg with the same brush. They give us tools and toys that both groundbreaking and useful. Jobs did as well, but his DNA was fundamentally different from these other men. Not necessarily better, but certainly rarer. Jobs has more in common with Mark Rothko, the expressionist artist who’s the subject of the John Logan play Red.  Both were perfectionists, temperamental to the extreme, and obsessed with making the viewer an active participant in the art.

Jobs was not a technology innovator in the mold of Brin, Page, or Zuckerberg. Jobs was a polymath – one of a few modern Renaissance Men who show mastery in several fields and who often straddle the line between artistry and innovation.

A Message to Data Analysts, Our Future Overlords

[Editor's Note] This entry is written as part of the Analytics Blogarama hosted by SmartData Collective. The subject prompt was: “The Emerging Role of the Analyst.”

***

As the post-apocalyptic civilization of 2017 (yes, it’s not too far off) sifts through banks of computer data searching for remnants of our contemporary culture, I hope they happen upon this post. I want them to note my foresight and prescience at having accurately predicted the new ruling class of the Next World Order.

As of this writing, very few of my colleagues join me in my supposition that data analysts – those seemingly quiet, thoughtful employees who “mostly kept to themselves” – are a mere six years away from all-out world takeover. My wife and I, no doubt, will not have survived the Great Quantitative Wars, but in return for paying homage to you “before it was cool,” I ask consideration for any household pets that may have survived us. If they survived, they’re probably hungry by now. There’s food in the bottom corner cabinet in the kitchen.

I understand why you felt you had to finally assert dominance over the world, and I sympathize. The madness simply had to be stopped.

It’s hard to believe that people wouldn’t see the signs leading up to this eventuality. After amassing many years of university education and several hundred thousand dollars worth of student loans, we rewarded you by putting you to work for managers that didn’t have the faintest idea what the hell you were talking about.

• “What do you mean, there’s no significant relationship? Make one!!”
• “Random, schmandom…who gives a damn?”
• “What the hell is a mean? I just asked you for the average!”

And God help you if you worked for an MBA. The beneficiaries of one intro stats course fifteen years before, they would proceed to tell you exactly how you must have miscalculated your c-value…and it’s not like you could tell them that there is no such thing as a c-value. You were very patient as you explained that, no, we can’t just throw in more bar and pie charts to pretty it up. But alas, there was that one accidental moment when you corrected your boss’s interpretation that the data showed his decisions were 95% certain to be accurate, and they kicked you over to the IT department and called you a “Business Analyst,” and you were never heard from again.

By the time the financial sector melted down in 2008, you clearly all had enough. You watched in horror as the market minted AAA-rated junk CDOs, and insisted that it had quantitative models that proved absolutely no risk. How could there be no risk?! A first-year quant student from University of Phoenix could have told you that there was risk! Yet off we went, because our banks had to make more money than all the other banks. The risk analysts were moved into closet offices.

We figured out too late that those people who we assumed to be quantitatively-driven traders were actually hormone-addled narcissists. Oops.

So, now you’re ruling the world, and I can’t really say that’s unjust. We kind of had it coming. Our mistake was that we didn’t respect analysis enough to learn about it. We had a statistics class once, and then said, “That’s hard. I’m just going to hire someone to do this.”

That’s a pretty arrogant stance. We assumed that we could be leaders while still maintaining our own ignorance. You can’t be a leader while turning whole subject matter areas unquestioningly over to others because we simply can’t be bothered to make an effort at understanding. While campaigning for the presidency in 2000, George W. Bush was asked several times about his lack of military experience, and he replied that he would “listen to his generals and take their advice.” Having witnessed how that plan turned out, we collectively made the same mistakes in the area of data analysis.

What we should have done was embrace the emerging role of analysts in business by educating ourselves to a level of basic competence, and placing some trust in the relatively objective perspectives they afforded us. The last ten years have put more useful data at business’s disposal than the preceding hundred years, and its to our benefit that you, our new leaders, became more prominent in business as a result. Your work gives us a picture of our enterprise that circumvents our internal biases and predilections. Respect for analysis and objectivity would have spared us both The Great Depression and The Great Recession, and God knows how many unnecessary bankruptcies and bad decisions. But, it also would have denied us the opportunity to remain ignorant and make uninformed gut decisions. So we said, screw it.

So, as you’re reading this, oh Great Overlords, you have consolidated your power as the new ruling class of earth. Praise be to you. The good news is that social programs will now be fully funded, the military fully provisioned, the national debt fully paid down, and lawyers abolished. The bad news, of course, is that salons, barber shops, and upscale style boutiques will have fallen into dilapidation from lack of use, and college parties will now be very measured, thoughtful affairs. I’m truly sorry we didn’t respect your value until it was too late for us, and I wish you well. And seriously, please, look in on the pets. The short, stumpy little fuzzy one likes cheese.

***

If you’re new to this blog, it has lots of information on what motivates our behavior and interactions. It may therefore provide some insight into the downfall of our civilization and the rise of the Analyst Ruling Class. Here are some articles that might be of interest:

Social Validation and the Drive for Success

The Six Weapons of Influence: Reciprocity

The Six Weapons of Influence: Commitment and Consistency

The Six Weapons of Influence: Social Proof

The Six Weapons of Influence: Liking

The Six Weapons of Influence: Authority

The Six Weapons of Influence: Scarcity

The Halo Effect

Why We Want What We Can’t Have, and Can’t Have What We Want

Motivation in the Workplace: Surprising New Science

How Pressure and Stress Are Affecting Your Performance

The “Superstar” Trap

In the wake of President Obama’s election, it’s easy to forget that in 2007, no one questioned that Hillary Clinton would become the next president. It’s difficult nowadays to remember exactly how far removed she was from all other Democratic contenders. In addition to the qualities that made her the inevitable nominee – name recognition, clout, a campaign war chest – the mere appearance of inevitability brings it’s own advantages: early donations, commitments from precinct captains, general momentum, and most importantly an All Star team of strategists and campaign managers.

Hillary Clinton's 2007 Campaign Staff

It’s hard to overstate how much of an effect that last advantage carries. Very few human beings have the experience of running a high-quality national campaign. Those strategists on the A-list are truly superstars in their field. Campaign management is a grinding, heart wrenching trial-by-fire. Many have slogged through losing campaigns for their entire careers before one major win brought them their hard-earned recognition as kingmakers. In 2007, Hillary Clinton had her pick of the very best.

Patti Solis Doyle, a veteran of the Chicago mayoral campaigns and one of the most fervent Clinton loyalists, became the first female Hispanic manager of a presidential campaign. Her deputy, Mike Henry, was one of the key strategists behind the Democratic re-taking of the Senate the year earlier. Mark Penn, the superstar pollster from Bill Clinton’s presidential administration, became Hillary’s personal Karl Rove. Howard Wolfson, a veteran of bare-knuckle New York politics, became the campaign spokesman. Hillary’s campaign COO was a former deputy White House chief of staff. Another of her senior advisers was a former White House communications director. Other notable strategic advisers included famous names like Madeline Albright, Richard Holbrook, Sandy Berger, Wesley Clark, and Geraldine Ferraro.

Harlem Globetrotters versus the Washington Generals

Having this team together was the political equivalent of sending the Harlem Globetrotters to do battle with the Washington Generals; not only was the winner apparent before the game ever started, but they would probably be dancing around their opponents and doing trick moves to rack up style points. No other team could possibly compare. Mark Penn alone is in a league of just two other pollsters – Dick Morris and Frank Luntz – whose interpretations are taken as gospel in political circles. Finally, after assembling all this talent in one place, “Hillaryland” was now set to bring about the result that everyone knew was inevitable.

Does anyone remember how that turned out?

If one judges by the endless, ever-tight primary fight that year, we would tend to draw the conclusion that Hillary’s All Star team was simply the victim of bad luck. The nation wanted palpable change, after all, and Mrs. Clinton had been part of American Political Reality for quite some time. And Mr. Obama had run a very disciplined campaign. And he was a superior public speaker, with a charisma and a capability for human connection that Hillary would openly admit that she lacked. And some of Bill’s comments during South Carolina had hurt as well. So maybe her inevitable run for the White House was simply not in the cards.

That conclusion, however, would gloss over the reality that Hillary’s All Star team was broken and dysfunctional from the first day, and did as much to destroy the Clinton campaign than any actions by her primary rivals. According to the book Game Change, by John Hellemann and Mark Halperin, Solis Doyle turned out to be an ineffectual leader who had no clue how to run a national campaign. Before the Iowa caucuses had even concluded, she was contemplating a way for Hillary to gracefully bow out of the campaign. Mark Penn had a secret cabal going with Bill Clinton, and the two of them were running their own private campaign strategy and undermining the rest of the group. The most basic campaign functions went untended. Important ad money didn’t get approved in time. Important phone calls when unanswered. Hundreds of balls were dropped in every conceivable aspect of the campaign. And most importantly, all the campaign executives hated each other’s breathing guts.

What started as an exercise in raw talent – a group that Hillary saw as emulating Lincoln’s cabinet as portrayed in Doris Kearns Goodwin‘s book Team of Rivals – ended in early primary losses, a major campaign management shake-up, and then finally a total implosion. The All Star Team ended up being less than the sum of its parts.

Steve Jobs, of Apple

We live in an age obsessed with individual talent. We are easily mesmerized by it. America, from its inception, has valued individual endeavor and has sought to afford maximum individual freedom to facilitate expression and achievement. When we look at success, the easiest way to understand it is as a direct result of the individuals most closely associated with it.  Most of our major success stories – Apple, Google, Amazon – have a name and a narrative associated with them. Business leaders and consultants bow to the alter of some Great Innovator – so much so that we could easily call this decade “The Steve Jobs Era.” In sports we put All Star and fantasy teams together in order to pit the absolute best against the absolute best. Even in the entertainment business, the production models are evolving to emphasize superstars. For the last decade, the most excellent scripted shows have been tightly ruled by a new breed of totalitarian “show-runners” (e.g. David Chase for The Sopranos, David Simon for The Wire, Matthew Weiner for Mad Men, Aaron Sorkin for The West Wing, etc.).

All this begs the question – are we right to worship individual talent alone? Does the success of a group merely reflect the sum of the talent of its individual members?

How Pressure and Stress Are Affecting Your Performance

The Candle Problem

Some years ago, a Princeton psychologist named Sam Glucksberg brought a group of test subjects into a room. In the room was a table positioned against a wall. On the table was a book of matches, a box of thumbtacks, and a candle. “Your job,” Glucksberg told his subjects, “is to attach the candle to the wall in such a way that when it’s lit, the wax will not drip onto the table. I will be timing you, and I will use your results to establish averages and benchmarks.”

Some time later, he brought another group of subjects into the room. He showed them an identical set-up: table, matches, box of thumbtacks, and candle. He gave them the identical instructions, but added a twist: “I will be timing you, and you will be rewarded with money based on your times. If you finish in the top 25% of all times, you will receive X dollars. If you’re the fastest of all times, we will give you double that amount.”

All of Glucksberg’s groups were timed against one another. And what do you think happened as a result?

The groups who received the money as a reward were, on average, three-and-a-half minutes slower at coming up with the right answer. How could this happen?

What do we do with the negative feedback?

“Do what you’re good at.”

“Do what you love.”

“Do what you would do for free.”

Is there anybody reading this who found this kind of career advice as utterly useless as I did? For a variety of reasons, some of us don’t have the first clue what this goal might be. I have an actress friend of mine who always wanted to be an actress. She aimed her whole soul towards becoming an actress, and went to Juilliard. I envied her, and people like her, for easily discerning the call of their personal direction. I’ve always been a generalist, pretty good at a lot of different things that all tasted pretty much the same, with no really inclination one way or the other.

Now, I’ve accomplished a few things, but never really applied myself in one single direction. I don’t have a great idea of what my strengths are. The reason for that is that I was always over-sensitive to criticism or negative feedback. So when I was younger, I’d try one thing, hit my limits, and stop. Then I’d try another thing, hit my limits, and stop. I was searching for that area for which I had natural talent, figuring that when I found it, it would somehow feel easy and right. When I hit early failure, I took it as a sign that I was in the wrong pursuit, that I was outclassed, and that I should do something else.

Peter Bregman is a leadership coach who writes a blog for the Harvard Business Review. He gave a TED Talk at TEDxFlint (I love using TED talks for blog inspiration) about how we learn and grow by deliberately embracing discomfort and criticism. More is achieved through inviting rejection and criticism than by trying to find the path of least resistance. I’ve included a YouTube posting of his talk below:

Jon Stewart, Gen-Y, and Brand-centrism

In my most recent MBA class on leadership, we covered generational differences. We learned that there are certain workplace-related traits that can be ascribed to Baby Boomers, for example, that is not a part of the Gen-X or Gen-Y experience. As a leader, one may therefore relate differently to employees of one generation as opposed to how they relate to members of other generations.

For example, regarding relationship to authority (taken from the Lake Forest leadership presentation on generational relations):

• Those of the “Veteran” generation (born 1935-45) will generally respect authority and hierarchy. They generally want to be told what to do, and will deliver on explicit direction.
• Those of the “Boomer” generation (born 1946-59) will generally challenge authority. This is the Vietnam/disenchantment generation, and therefore want a more democratic organization.
• Those of the “Gen-X” generation (born 1960-79) are generally unimpressed by authority. This is the latchkey generation that had to figure things out on their own, and they are the first generation to want to know what people in authority can do for them.
• Those of the “Gen-Y” generation, or Millennials (born 1980-2001) are capable of respect for authority, but only such authority as can demonstrate competence in their eyes. This is the generation of immediate gratification, and wants those in authority to show them what they can do for them right now!

Jon Stewart

With this background, I’d like to introduce a fascinating video clip featuring Jon Stewart on a youth vote panel in 2000. You’ll notice that the clip seems dated, and Stewart’s persona is a little more raw and unguarded from what we see in current times. Watch the clip, and then join me back for a discussion on some of the points…

This clip is a great example of a Gen-Xer (Stewart) talking to a Millennial (the woman to his immediate right). Stewart displays a condescending attitude to that entire generation which may or may not be deserved, but in terms of how one the generational attitudes that both people express, it fits right in with the model on how these generations regard one another.

Here are a couple of points:

1) The point about Gen-Y’s brand agnosticism is perfectly valid. People born after 1980 do wield a disproportionate amount of consumer power simply because they are the generation most open to dumping their current brand in favor of another. They feel the same way about the places they work, and will change companies on a whim.

2) The presentation from which I got this information has a slide called “Connecting with Y-ers,” which suggests things like “be encouraging,” “coach instead of tell,” “give them attention,” “give them recognition,” “use irony and humor,” etc. I’m going to diverge from the presentation at this point and say that this is bullshit. I’m more in line with Stewart’s line of thinking: just show competence. Make good stuff. He enjoys a particularly young demographic without necessarily trying to “speak the Gen-Y language.” Although, to be fair, Stewart is a fan of the more-than-occasional dick joke, and that’s going to have a slightly younger draw.

Let me know what you think. And please share the discussion using the links below. Although, if you’re from Gen-Y, I’m apparently going to have to say pretty, pretty please…

Related Articles

• Branding Lessons from Jon Stewart (mediabistro.com)

What Is “Tough”?

“Toughness” is an adjective that gets thrown around a great deal, particularly in politics. Many public figures go out of their way to associate themselves with “tough,” “independent” stances and hard-line foreign policy, and each successive generation paints themselves tougher than the last. In his time, the first President Bush was the hero of the Gulf War, but in his son’s time, he was the man who didn’t have the stuff to invade Baghdad. Sarah Palin, the conservative “Mama Grizzly,” is one coat of lipstick away from being a pit bull. According to her.

Teddy Roosevelt - Tough!

I’m about mid-way through Edmund Morris‘s first volume, The Rise of Theodore Roosevelt. When reading this book, it becomes instantly apparent that modern conservatives who claim Teddy as a role model don’t understand the man. They simply see in their minds the famous painting of Teddy on horseback. They have no conception that, in addition to his adventures as a “Rough Rider,” he was a bookish intellectual, an eastern fop, a naturalist geek, an insufferable elitist of the first degree, a moralist serving the God of noblesse oblige, and most notably an anti-corporate reformer and social progressive. No modern conservative would come within fifty feet of the man were he living today.

But Teddy was tough. He was tough in a way that seems like it’s a class apart from figures of the modern era, save perhaps John McCain‘s imprisonment in North Vietnam. He had a toughness that most of his contemporaries had to look twice to see, because you couldn’t see it at first glance. A spindly, sickly child, he responded by toughening his body through punishing exercise. As a young Assemblyman, he annoyed and cajoled his way to prominence within his party. In his mid-twenties, he lost his young wife and his mother on the same day, and suppressed those emotions so thoroughly that he nearly never spoke of his first wife again. It wasn’t until he exiled himself to the Badlands and shot a Rocky Mountain Grizzly square between the eyes that he felt sufficiently purged to return to his eastern life. Most of us go into metaphorical exile in order to confront demons…Teddy did it literally.

Rick Moranis - Not as tough...

Reading some of these passages on Roosevelt makes me realize exactly how little energy and drive I apply to life in comparison to this Irresistible Force of lore. It makes me value the man for his toughness. But it also makes me wonder why I admire this man, but I fail to admire the modern-day brush-clearers and moose hunters who display similar ambition, egotism and stubbornness. I want to distill the virtue of toughness, and separate it away from the posturing and bravado that usually passes for it. I want to be able to separate truly tough people from the many who pretend to be tough.

9 Strategies for Influencing Others

The Hay Group is a management consulting firm that does its own research into motivation strategies and produces self-assessment materials for students and clients. I recently took one of their assessments for an MBA class on leadership strategies. The assessment was called the “Influence Strategies Exercise,” and told me how much I rely on each of nine separate influence strategies. Their workbook then went into detail on each strategy, and the context under which it would work. Here are the nine strategies: