Archive for October, 2012

The ‘tooling” of American Business

The ‘tooling” of American Business.

The ‘tooling” of American Business

Slouching to Gomorrah:

I saw an article in Inc. Magazine and it had me thinking about how often we settle for the easiest, lowest, most common (and cynical) approach to things.  This article attempts to inveigle us into thinking that our business is more important than anything, and as such we are permitted to do virtually anything to ensure its survival.  To justify the argument with the premise that men in sales roles have been doing unseemly things for years and customers expect it, is such a cop-out. When did American business begin looking to Jerry Springer as a sales guru?  Are we all just shallow, hormonal tools? Are we ready to give in on this?

Is this our “Big Night”?

Nowhere is this philosophy more completely and cleverly presented than in the character of Pascal in the Movie “The Big Night”. It also spoke powerfully about the essence of a larger conversation I have been participating in this week.  The movie is an entertaining portrait of the crossroads we are in.  It raises some very fundamental questions about why we do what we do, what can happen when we are really good at something and we pursue it, and what we can become if, in our quest for everything, we compromise. Are we becoming the character ‘Pascal’ who says “I am a businessman.  I am whatever I need to be at any given time.”, and “Give people what they want so that later you can give them what you want.”?  Are we all just tools manipulating each other while we wait (and want) to be manipulated?


This clip from the new HBO series “The News Room” captured for me the disappointment and frustration over this attitude.    I am not deluded enough to think myself morally superior.  We all make short-sighted and selfish decisions and we treat each other like “things”, to further our own desires and plans. But COME ON! We can do way better than this!  Let’s all stop flattering ourselves and take a hard look at how we operate.  Could we be contributing to the reason for the spectacular rant Jeff Daniels’ character delivers?  We are not tools; let’s stop acting and treating each other like we are!

Oh Snap!

I am in the midst of one of the most frustrating examples of what can happen when you jump to conclusions. My mom is 87 years old and several years ago she suffered a stroke that left her with speech aphasia which makes it very hard for her to find the words when she tries to talk. This is extremely frustrating for her. I had no idea it could get worse until she went to the hospital. She was hit with a barrage of strangers asking her a lot of health questions that she was unable to answer. One doctor ended up diagnosing her with advanced dementia. She does not have it, but speech aphasia is a symptom for both stroke and dementia. The conclusion she jumped to ended up causing a lot of other problems with all aspects of her recovery. Here is what I tried to take away from the experience; they seemed obvious to me until I encountered the problem solving and decision-making processes of medical doctors entrusted with my Mom’s health care.

GET THE FACTS: If you are a consultant coming in to a company to make an assessment, you had better make sure you are talking to the people who are in the best position to help you understand the facts of the current business state.

RESIST THE URGE TO MAKE SNAP JUDGMENTS: If it looks like the same problem you have seen many times before, don’t flatter yourself; take the time to be sure there is not an equally plausible explanation. If you have been called in, don’t assume the solution will be obvious even if the symptoms look like those of a problem you have seen in the past.

BE THE DEVIL’S ADVOCATE: If you think you have an answer to a problem it is worth the time to do what fraud examiners do when confronted with a case. To guard against the risk of developing a theory and then using all of the data to support it they make an objective case against their theory. You should never get too complacent in your own ability to see what is happening. It is better for you to adopt an attitude that says, “What am I overlooking?” than have your client point it out for you.

Leadership and Pickup Games

I have been thinking about the Noble Cause idea presented in the book “Tribal Leadership” this last week. It pointed out to me the risk of all work relationships, (and goals for that matter): that we settle for less. When you look at companies like Amgen or Zappos and you ask them why they come to work their answers are big ones. They are not trying to be better than their competition through specific goals they are trying to make the world better.

I think about the goals of my previous jobs and although they were tangible, and we achieved some of them and some of them were even noteworthy, they tended to be ends in themselves. I wondered why employees ceased to get excited about them and people outside the organization were rarely impressed with our accomplishments. When I was running A/R and fraud the goals always involved reducing risk and expense. Not bad goals, but hardly anything that would make people get excited over the long hall. Every year bad debt and fraud got smaller and the goal got smaller and harder to achieve for a couple of reasons:

Diminishing Returns:

When I was at Sprint PCS we launched so fast and there was so much demand for our product that our focus in the back office was making sure our credit process did not impede our sales process. As sales began to be less insane, we had time to really analyze what was causing our bad debt. Truthfully, it was not difficult to make some really big improvements with relatively small changes in the beginning.  After all the easy stuff has been fixed, it took more and more time and money to devise ways to reduce the bad debt. Even when we adjusted the goal to account for this reality  trying to achieve a new version of the same goal was less impactful to the bottom line and therefore less cost-effective.  There was also something else working against the organization

Lack of Inspiration:

To put it bluntly, the team was trying to rally around a dollar figure, and although it worked for a while eventually everyone began to think that their job depended on the dollar figure. The driving force became fear. Sure it is motivational but it was not inspirational. We were not playing to win at this point we were playing not to lose. It affected the way we worked. Sometimes our competition was within our own company. Not exactly the thing that made people jump out of bed and hurry to work every day.

“Finding the Game”:

Gwendolyn Oxenham wrote a fascinating book called “Finding the Game” (there is also a documentary of it called “Pelada”). It is a chronicle of a three-year, 25 country journey where they searched out what we in the USA call “pickup” soccer games. Every country has a different term for it: In Trinidad it’s “taking a sweat.” In Brazil it’s “pelada” (literally “naked”). It’s the other side of soccer, those spontaneous matches played away from the bright lights and manicured fields—the game for anyone, anywhere. It captured for me the essence of ‘Stage 4’ companies; a level where the core values and a noble cause (something bigger than any one person) are clear and bought into by all employees.  I play in a geezer” soccer league and I also play in a regular bi-weekly pickup game for as well. In the “geezer” league, many people are playing to win and some players have not been able to let go of their individual dreams of past glory. Unfortunately, this brings out some of the most embarrassing human behavior and it is always someone making it about themselves. The pick-up game is different. Sure, we choose teams and keep score, but we make it as even as possible, all skill levels are welcome and participate, and nobody really cares who wins. It’s not about beating a specific opponent like in the “geezer” league. It is bigger than that. We come to play twice a week (even in the dead of winter). On any given day there may be as many as 15 countries represented on the field, but it does not inhibit the game. There are no referees and we never have to worry about fights or even harsh words.

Why do we do this?

The immediate answer might be for the exercise, but we could achieve this much more efficiently if we uncovered our treadmills and jogged at home. You might think it was for fellowship, but I do not even know the names of some of the regular players and some of them have cultural differences that would normally create tension in their respective countries, but not here.

‘Means’ and ‘Ends’:

The authors of “Tribal Leadership” estimate that only about 22% of companies operate at ‘Stage 4’;  To me these companies are successful because they don’t settle for selfish or short-sighted ends. They see their work as a means to a greater end. I am not sure that playing the game of soccer is a core value or a particularly noble cause for any of these guys. The game is a mechanism (process/tool if you like) that we use to pursue something greater. I am not even sure anyone would be able to find a noble cause of our pickup games, but  it is a concrete illustration of the satisfaction and liberation that come from participating in something bigger than each of us.  If such a diverse group of people can come together and operate this way twice a week for something as simple as a game, surely more companies can figure out a way to do this.

Data Danger

I am reading more and more articles that are giddily proclaiming the power of big data.  There was a recent article that highlighted its use in the employee screening and hiring process.  If you set aside the potential legal issues there are more disconcerting elements associated with the power of data.

Romancing the data:

 Don’t get me wrong.  I have worked around a lot of data for a long time and doing so is essential to being successful at managing bad debt or preventing fraud.  There are limits however, to the power of data.   No matter how much data we gather and no matter how long we analyze it there is an asymptotic limit to what it can predict.  Anyone who has spent any time in credit, collections or in the prevention of fraud (or is a parent for that matter) can tell you that predicting human behavior is difficult.  It is tempting to assume that a system designed to manage data can actually solve all of your business issues.  The reality is that data and the systems around it can only present data for you to understand and make decisions on.

Correlation is not Causation:

When I was leading a very large telecom A/R organization we were trying to understand our risk profile.  We had enough customers of our own to do a statistical analysis and we found some interesting and counterintuitive things.   Like most companies at the time, we depended on a FICO score to determine the risk of a potential customer.  It takes into account a number of things but bankruptcy was a major negative factor in the compilation of the score.   It was a very accurate predictor of someone’s likelihood to default on their mortgage; we assumed that if they were going to default on their mortgage, they would stop paying us long before they went bankrupt.  What we found after using a sample of our 10 million customers was that for wireless service, bankruptcy was not as predictive as one would think.  We discovered a large number of entrepreneurs who had declared bankruptcy (some more than once) who were the most reliable customers in the consumer and small business markets.  Turns out, they may let other things go unpaid but not their cell phone.   This allowed us to exploit a market opportunity that none of our competitors would not go near.    We also discovered that there were other nontraditional measures that proved very accurate in predicting risk.  The point is that the correlations are not necessarily causes, and that predictive indicators can and do change.   Which leads to the next danger.

The “Wall-E” effect:

Some times the things that data and systems can do is so powerful that it can make us  passive as if the data or the system itself could make all of the decisions for us.   There is a scene in the movie “Wall-E” where the humans are so dependent on technology that they have become functionally helpless.   Instead of using the technology as a tool to achieve an end, the technology becomes an end  in itself and they are completely incapable of functioning without it.

Data can have the same effect on managers.   They fall into a kind of unhealthy dependence on the data. They cease to understand that data and systems are tools, not ends in themselves.  Data output is the starting point for problem resolution  not the end.

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Dan Clark

Dan Clark

Principal of Bowline Consulting, process designer/fixer, wireless telecom veteran, addicted pick up soccer player, fly fisher, backpacker, beer brewer, guitar player, choir singer, recovering bag piper

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