Archive for the 'Management' Category

An excellent post by Mark Draughn that reminds how we get the behavior we incentivize. In this case the NYC govt incentivized its police to ignore violent crimes and to make bogus arrests to boost their cleared-case stats:

This is a standard recipe for disaster in quality control — and CompStat is at heart a statistical quality control program. Take a bunch of people doing a job, make them report quality control data, and put pressure on them to produce good numbers. If there is little oversight and lots of pressure, then good numbers is exactly what they’ll give you. Even if they’re not true.

Worth reading in full.

Ann Althouse has a good post today. I can’t get through her Captcha system so I thought I would post a few comments here. This NY Times op-ed piece is the source for her observations. It is behind the Times’ idiotic payment wall so go to her blog for the link.

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

That certainly states the issue clearly. What does he complain about ?

I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

What specifically is the problem ?

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Erin O’Connor links to George Eliot:

It is an interesting branch of psychological observation to note the images that are habitually associated with abstract or collective terms — what may be called the picture-writing of the mind, which carries on concurrently with the more subtle symbolism of language. Perhaps the fixity or variety of these associated images would furnish a tolerably fair test of the amount of concrete knowledge and experience which a given word represents, in the minds of two persons who use it with equal familiarity. The word railways, for example, will probably call up, in the mind of a man who is not highly locomotive, the image either of a “Bradshaw,” or of the station with which he is most familiar, or of an indefinite length of tram-road; he will alternate between these three images, which represent his stock of concrete acquaintance with railways. But suppose a man to had successively the experience of a “navvy,” an engineer, a traveller, a railway director and a shareholder, and a landed proprietor in treaty with a railway company, and it is probable that the range of images which would by turns present themselves to his mind at the mention of the word “railways,” would include all the essential facts in the existence and relations of the thing. Now it is possible for the first-mentioned personage to entertain very expanded views as to the multiplication of railways in the abstract, and their ultimate function in civilization. He may talk of a vast net-work of railways stretching over the globe, of future “lines” in Madagascar, and elegant refreshment-rooms in the Sandwich Islands, with none the less glibness because his distinct conceptions on the subject do not extend beyond his one station and his indefinite length of tram-road. But it is evident that if we want a railway to be made, or its affairs to be managed, this man of wide views and narrow observation will not serve our purpose.

Probably, if we could ascertain the images called up by the terms “the people,” “the masses,” “the proletariat,” “the peasantry,” by many who theorize on those bodies with eloquence, or who legislate for them without eloquence, we should find that they indicate almost as small an amount of concrete knowledge — that they are as far from completely representing the complex facts summed up in the collective term, as the railway images of our non-locomotive gentleman. How little the real characteristics of the working-classes are known to those who are outside them, how little their natural history has been studied, is sufficiently disclosed by our Art as well as by our political and social theories.

Read the whole Eliot passage plus Erin’s post.

See also Peter Robinson’s post about Khrushchev and Soviet management practices, which I see as being pretty related.

Two old rivals. One is in Chapter 11, the other is thriving. Why?

Kodak and Fujifilm

In medicine, an iatrogenic disease is one that is brought on by a medical treatment itself. An example would be when a physician treating a minor condition fails to properly wash his hands and as a result gives the patient an infection more serious than the original problem.

It strikes me that iatrogeny also occurs in the management reporting and control systems of businesses and other types of organizations. A particularly awful example was reported in Britain a couple of years ago: hospitals were being measured on time from a patient’s entry into the emergency room until the time that patient was seen by a physician. It appears that in quite a few cases, the optimization of that measurement for the hospital was achieved by leaving the patient in the ambulance, in some cases for as much as five hours, so that the clock on the measurement would not start until the criterion was certain to be achieved.

So a measurement intended to improve patient service had the opposite effect. It directly caused unnecessary pain and danger to the individual ER patient who was kept in the ambulance while harming the effective utilization of expensive vehicles and skilled personnel, while at the same time providing upper management with a distorted picture of what was really going on.

Smirk not, fellow capitalists. While this particular example of iatrogeny was perpetrated by a government entity, plenty of examples can also be found in the private sector. Indeed, I saw an interesting example in a Target store just the other day.

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The sense of security more frequently springs from habit than from conviction, and for this reason it often subsists after such a change in the conditions as might have been expected to suggest alarm. The lapse of time during which a given event has not happened is, in this logic of habit, constantly alleged as a reason why the event should never happen, even when the lapse of time is precisely the added condition which makes the event imminent.

–George Eliot in Silas Marner

I was reminded of the above passage by a couple of recent posts:

Claire Berlinski excerpts some thoughts by Hernando De Soto, asking “Is the knowledge system broken?” Some good discussion in the thread at Claire’s post; see especially the concept of a “knowledge bubble” in the comment by Late Boomer. Although I’d say that it’s more a matter of an assumed-knowledge bubble.

Richard Fernandez suggests that “too big to fail” really means “wait for it,” where “it” means a failure on a very large scale. He cites Nassim Taleb:

Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. Although the stated intention of political leaders and economic policymakers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite.

Both of the above are very worthwhile reading. See also my related post penny in the fusebox.

Barack Obama, a couple of days ago:

I try not to pat myself too much on the back, but this administration has done more in terms of the security of the state of Israel than any previous administration.

Barack Obama, quoted in a 2008 article:

I think that I’m a better speechwriter than my speechwriters. I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m gonna think I’m a better political director than my political director.

Tries not to pat himself on the back too much? The man is in serious danger of breaking his arm from patting himself on the back so much.

The second comment is absolutely bizarre, even taken by itself–anyone who thinks that way is seriously dangerous in any management or leadership position, and should probably not even be allowed to operate power machinery. Put the two comments together and you have an individual whose mind functions in very strange ways indeed.

The assertion about Obama’s support of the security of Israel is of course so at variance to reality that it’s hard to imagine anyone taking it seriously except members of the hard core of Obamian true believers. Of whom there are unfortunately still quite a few.

Compare and contrast ads for Apple’s iOS/iPhone/iPad and ads for Google’s Android.

The Apple ads center visually on products themselves. The Apples ads just linger on showing the Apple hardware and software in use. Apple believes that the products speak for themselves and all Apple has to do is show the products in action. Basically, the ads just say, “Here’s our stuff. Isn’t it neat?” This works because the Apple products are finely tuned by a focused and discipline design, production and support system. There is a definitive iPhone, a definitive iPad and a definitive iOS operating system.

The Android ads by contrast don’t show the actual devices or Android itself in use. They are not Android specific at all. They might as well be snippets cut from some Sci-Fi movie or video game. The actual Android products are largely hidden. Instead of showing the hardware and software in action, they instead nearly try to associate the Android brand with cool and exciting Sci-Fi imagery.

Most Android ads, regardless of who makes them, fit this pattern. Android devices are seldom seen, when seen they seldom hold prolonged focus and are seldom seen in use.  Basically, the ads say, “Look at the girl in leather fighting robots! That’s cool right? So, Android must be cool too!”

The two different ad styles reveal the problem with fragmentation that Google faces in making Android a trusted, respected and widely adopted OS brand.

I post to StackOverflow, a site/community for answering technical programming questions. One of my highest rated answers addressed the question of which mobile OS a startup should target. Back in Oct 09 I observed:

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Dietrich Doerner is a professor (at Otto-Friedrich University, Bamberg) who studies the thought patterns that result in bad decision-making, resulting in outcomes ranging from lack of success to outright disaster. I reviewed his interesting book, The Logic of Failure, here.

Comes now The Social Pathologist, who links my original review and adds thoughts of his own on Doerner’s work, particularly the sociological implications thereof. Interesting reading.

Searching on Doerner’s name, I ran across this analysis of Doernerism applied to the failure of a downtown mall in Columbus, OH.

Prof Doerner’s home page is here; unfortunately it seems that most of his work is available only in German.

A Fiery Peace in a Cold War: Bernard Schriever and the Ultimate Weapon

The American space program, like its Russian counterpart, was largely an epiphenomenon of the ballistic missile program. A great deal has been written about the space programs; regarding the missile programs themselves, not so much. This book remedies that gap by using the life of General Bernard Schriever, who ran USAF missile development programs, as the centerpiece for a history of the Cold War’s defining weapon. Although Schriever is the central character, the book describes the roles played by many other individuals, including:

–John von Neumann, the Hungarian-American mathematician–an implacable enemy of the Soviet Union who advocated a strong American military posture and perhaps even a nuclear first strike

–The bomber general Curtis LeMay, who to put it mildly was not a Schriever fan. After Schriever received his fourth star, LeMay glared at him and said, “You realize if I had my way, you wouldn’t be wearing those.”

–Simon Ramo, who as a high school student withdrew all his savings to buy a violin in the hopes of winning a college scholarship in a music contest…he did win, and as a young engineer was chosen by GE over another job candidate because the Schenectady orchestra needed a good violinist! Ramo went on to co-found the Ramo-Wooldridge Company (later TRW) which basically created the discipline of systems engineering and was used by Schriever to address some of the most difficult technical challenges facing the missile program.

–Colonel Ed Hall–a brilliant designer of missile engines, a hard-driving project manager, and in the opinion of many associates a complete jackass to work with. To call Hall “assertive” would be putting it mildly–when his wife was giving birth (in England during WWII) and the obstetrician was in Hall’s opinion acting indecisively, Hall pulled out his revolver and gave the doctor highly specific orders as to exactly what to do.

Schriever himself was a boy from a not-very-well-off family of German immigrants in the Texas hill country, who joined the air force after first considering a career as a professional golfer. He became a protege of Hap Arnold, and after Pacific-theater service during WWII focused on the leadership of R&D efforts rather than operational command. Throughout his career, Schriever demonstrated an unwillingness to fit his views on important issues to the opinions of those in higher authority–even when higher authority was represented by someone as intimidating as LeMay, with whom Schriever clashed soon after the war on the issue of high-level versus low-level attack tactics for bombers, or Secretary of the Air Force Harold Talbott, whose order to relocate certain missile facilities (from the west cost to the midwest) Schreiver flatly refused, citing his “prior and overriding orders” to get the program done in the shortest feasible time. By then a general, Schriever stuck by his position on this even when Talbott threatened him that “Before this meeting is over, General, there’s going to be one more colonel in the Air Force!”

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For many decades, Labor Day was a holiday on which Americans celebrated (and maybe even felt a bit smug about) our nation’s economic prowess. This year, not so much. In our current economy, many people are suffering grievously. Moreover, an increasing number believe that the problems are permanent. Surveys show a significant proportion of the population believes that their own living standards will continue to decline, and that their children’s generation will live less-well than their own. In other words, the feeling is growing that what we face in not a normal cyclical downturn, but a sea change for the worse.

The proximate cause of the current situation was the housing bubble and bust, and more generally the excessive and irresponsible use/deployment of credit in both the public and private sectors. However, there is every reason to believe that there are structural problems with the economy that go well beyond the sort of things that are usually portrayed on graphs in economic discussion.

Politicians, economists, analysts, and bloggers have asserted numerous and sometimes conflicting factors as primary causes for our economic problems. This post will summarize some of the explanations most commonly proposed plus a few more. I don’t necessarily agree with all of these, and today I’m focusing on simply stating the proposed causal factors, leaving detailed analysis/assessment for a future post.

The possible causes of the economic decline:

1)The low-hanging fruit has already been eaten. Economist Tyler Cowen, for example, argues that America’s historical prosperity has been driven largely by: (i)the availability of free land, (ii)a sequence of key technological breakthroughs, and (iii)the high return on investment offered by providing schooling to motivated but uneducated immigrants. He further argues that the free land is gone, that today’s technological improvements are not comparable to those introduced in the period 1880-1940 (electricity, automobiles, airplanes, radio, mass production, pharmaceuticals, etc), and that the high % of the population already attending college makes additional improvements from this source difficult. (Tyler’s recent book includes a graph attempting to measure the “rate of global innovation” since medieval times; it shows innovation peaking over the period 1850-1905, and having now returned to the level where it was in the early 1700s.)

2)Technological unemployment. The argument here is that the advances in technology that have already occurred, and those that are likely in the near future, reduce the need for labor so radically that full employment will never again be possible. This assertion is basically the opposite of the low-hanging-fruit argument, at least the technological aspect thereof.

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On LinkedIn, there is a frequently-appearing ad that says “Learn Ivy League management at eCornell.” I finally clicked on it and got this page. Note especially the headline:

“Add an Ivy League credential to your résumé” (right under the “save 15% this August” line)

and, under “topics you will master”

How to Strategize for Success
Scenario Analysis
Executive Decision Making
Leading Through Creativity
Unlocking Your Leadership Potential
Motivating Members of Your Team

I’d suggest that anyone who seriously believes they can “master” a single one of these topics, let alone all 6 of them, in an 8-week class requiring “just 3-6 hrs per week” of your time” shouldn’t be allowed near the management of anything or anybody. And I’d also suggest that a university which encourages this kind of thinking is not exactly doing itself proud.

Global transition points like this are so rare, it’s a great time to be alive.

John Robb

Right on. Yes. Yes.

More of this type of thinking, please.

If I could live at any time in history it would be now.

(If you are not a regular reader of Mr. Robb’s Global Guerrillas, get that way.)

(Also check out Mr. Robb’s way cool new Wiki MiiU, which is all about resilience. I eagerly await his book on resilient communities.)

(Here is an xcellent John Robb talk about open source ventures, but full disclosure, a lot of it sailed over my head.)

(And if you have not read his book, Brave New War: The Next Stage of Terrorism and the End of Globalization, go get it.)

Friends, please let me know in the comments, on a scale of 1 to 5, strongly disagree to strongly agree, how you respond to this quote. Put me down as a 5, obviously enough.

Kathleen Fasanella, who runs the interesting blog Fashion Incubator, observes that the tv program “Project Runway” has led many people to pursue careers as designers–and that this is not the first time that such a phenomenon has occurred:

I’m troubled by the consequences of the fashion school bubble -350 designers at NY Fashion Week being but one sign of it- the blame for which we mostly attribute to Project Runway. A similar thing happened with the TV show LA Law, law schools were inundated with applicants and our legal system is burgeoning with excessive lawsuits as the logical consequence of lawyers needing to make their student loan payments. Simplistically speaking, these are trend careers.

Indeed, for young people who are making career choices there is a shortage of solid information about what various careers are really like and what they require in the way of preparation. Television tends to focus on a few specific fields–lawyers, doctors, nurses, cops, criminals–with occasional excursions into other areas like fashion design–but rarely provides any realistic sense of what day-to-day life in these jobs ight be like. This is understandable–screenwriter Robert Avrech oberved that movies are like real life, except that the boring parts are deleted–but means that these shows aren’t exactly reliable guides to career choice. High school guidance counselors rarely have any broad exposure to the world of actual work. College professors, even with the best will in the world, will tend to sell and perhaps oversell their own fields to talented students. Parents may or may not be useful sources of career information, depending on their own backgrounds and current situations; many will also have strong prejudices for or against certain fields.

Kathleen also observes that in her industry there is a real gap between the numbers of people who want to design the product and the numbers of people who want to have something to do with turning it into physical reality:

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video

A Ford assembly line for the Model T.

Related post: the automotive century and mass production

(video link via my mom)

In March 2008, I asked the question If you were the new owner of Borders, what would you do?…which sparked a fair amount of discussion.

Yesterday, Borders announced that it would close all stores and liquidate. Something like ten thousand people will lose their jobs.

In retrospect…given the state of the economic and the transition to digital books delivered via devices such as the Kindle…could Borders have been saved by better management, or was its demise inevitable?

See also this dumb company tricks post, which describes some experiences with Borders.

Buy the book: Father, Son & Co.

—-

When Tom Watson Jr was 10 years old, his father came home and proudly announced that he had changed the name of his company. The business that had been known as the Computing-Tabulating-Recording Company would now be known by the grand name International Business Machines.

“That little outfit?” thought young Tom to himself, picturing the company’s rather random-seeming collection of products, which included time clocks, coffee grinders, and scales, and the “cigar-chomping guys” who sold them. This was in 1924.

This is the best business autobiography I’ve read. It’s about Watson Jr, his difficult relationship with his father, the company they built, and the emergence of the computing industry. It is an emotional, reflective, and self-critical book, without the kind of “here’s how brilliant I was” tone that afflicts too many executive autobiographies. With today being IBM’s 100th anniversary (counting from the incorporation of CTR), I thought it would be a good time to finally get this review finished and posted.

Watson’s relationship with his father was never an easy one. From an early age, he sensed a parental expectation that he would follow his father into IBM, despite both his parents assuring him that this was not the case and he could do whatever he wanted. This feeling that his life course was defined in advance, combined with fear that he would never be able to measure up to his increasingly-famous father, was likely a factor in the episodes of severe depression which afflicted him from 13 to 19. In college Watson was an indifferent student and something of a playboy. His most significant accomplishment during this period was learning to fly airplanes—-”I’d finally discovered something I was good at”–a skill that would have great influence on his future. His first job at IBM, as a trainee salesman, did little to boost his self-confidence or his sense of independence: he was aware that local IBM managers were handing him easy accounts, wanting to ensure success for the chief executive’s son. It was only when Watson joined the Army Air Force during WWII–he flew B-24s and was based in Russia, assisting General Follett Bradley in the organization of supply shipments to the Soviet Union–that he proved to himself that he could succeed without special treatment. As the war wound down, he set his sights on becoming an airline pilot–General Bradley expressed surprise, saying “Really? I always thought you’d go back and run the IBM company.” This expression of confidence, from a man he greatly respected, helped influence Watson to give IBM another try.

The products that Watson had been selling, as a junior salesman, were punched card systems. Although these were not computers in the modern sense of the word, they could be used to implement some pretty comprehensive information systems. Punched card systems were an important enabler of the increasing dominance of larger organizations in both business and government: the Social Security Act of 1935 was hugely beneficial to IBM both because of the systems they sold to the government directly and those sold to businesses needing to keep up with the required record-keeping.

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The value of the dollar (shown here measured against a basket of currencies) continues to fall–this of course makes imports more expensive to American consumers. There is inflation in China:

That means Americans, Europeans and other buyers will have to pay more for those goods or seek lower-cost suppliers elsewhere. In some cases, retailers are bidding for goods at prices the exporters consider too low.

“I hear that many Chinese exporters are rejecting orders from Wal-Mart and other Western retailers,” Mr. Tao said. “I’ve been covering the Chinese economy for a long time, and I’ve never heard that before.”

…which has the same effect of making U.S. manufacturing generally more competitive.

The natural effect of these phenomena is that manufacturing in the U.S., for export and for domestic consumption, becomes more competitive and hence factories operate at higher capacity, new ones are built, and employment increases along with economic growth. There are other factors that seem to point in this direction.

The greatly increased availability of U.S. natural gas, driven by new drilling technologies, offers potential advantages both to companies using gas as a feedstock and to those which are heavy energy consumers. Dow Chemical, for example, is increasing its production of ethane and of ethane’s downstream products: Dow’s plastics business has led earnings growth this year after lower natural-gas prices made U.S. production cheaper than oil-based resins made in Europe and Asia.

And in the broader manufacturing realm, quite a few companies are realizing that the “offshoring” boom was in some cases based on superficial analysis, ignoring the logistical realities of a 6000-mile-long supply chain and the consequent inventory, forecasting, and human communications problems. Our friends at Evolving Excellence cover this topic frequently. Note also that rising oil prices directly increase the costs of bunker fuel (for ships) and jet fuel (for planes) and hence have a significant negative effect on the economics of offshoring for many kinds of products.

So, can we expect a manufacturing renaissance in the U.S.? There are certainly indications of at least a temporary uptrend, and there are structural factors, as discussed above, which have the potential of creating growth over the long term.

I am afraid, though, that we are likely to snatch defeat from the jaws of victory. Multiple political and social factors will, unless they are reversed, make it difficult for U.S. manufacturing to live up to its full potential.

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The Senate has passed a bill which would implement significant changes in the U.S. patent system. Bill Waddell has some serious concerns.

Also via Bill comes this interesting interview (video) with the head of GE’s Appliance business, which is significantly expanding its manufacturing operation in Louisville, KY. See also the discussion at Bill’s site.

WSJ reports that the SEC is considering relaxing the limit on the maximum number of shareholders in private companies, currently set at 499. According to another article in the same publication, the SEC is also considering a rather bizarre “crowdsourcing” approch under which companies would be able to sell investments in very small dollar amounts–$100 was mentioned–using social networking sites such as Facebook. (Another related WSJ piece here)

An alternative–perhaps complementary–approach is being proposed by David Weild, a former vice chairman of NASDAQ. Weild would like to see the creation of a new stock exchange, focused on raising capital for emerging companies and with a wider bid-ask spread to make dealing in such companies a more profitable activity for marketmakers.

A Business Insider article assesses recent organization changes at Google as a demotion for Marissa Mayer, based partly on the following reasoning:

Last year, Marissa Mayer was moved from being in charge of search to being in charge of local…Thing is, search is Google’s cash cow, and it’s probably the most important business in tech. So not running it anymore definitely makes her a less powerful executive.

I’m not a Google shareholder and don’t really follow the internal gossip of the company all that closely, so I have no particular opinion on how good a job MM has or has not been doing, nor when I read the linked article did I have any real opinion on whether or not the changes represented a good or a bad thing for her. (Later information suggests probably the latter.) But the kind of thinking represented by the assertion that less revenue responsibility means a less important job can be very dangerous to a business. The bad thinking in this case being done by the author, not necessarily by Google…however, an earlier BI article also observes that core search and AdWords are still king. That’s where the money comes from today, and why the engineers in those groups are treated like kings.

The problem with this line of thinking is that today’s revenue-dominant product is not necessarily tomorrow’s revenue-dominant product, and to the extent that power, resources, and status flow excessively to the current revenue king, tomorrow’s revenue king may never have a chance to be born and to grow up. A recent issue of Fortune offered Microsoft as an example–in a very hard-hitting article, the author argued that the grossly excessive dominance of Windows, aided and abetted by Steve Ballmer at every turn, has strangled many promising initiatives in their cradles.

A very astute and successful CEO observed that “the secret of startups is that you can have very smart people working on very small things.” By “small,” he did not mean unimportant; he meant small in terms of existing revenue. It is possible, of course, for established companies to also put appropriate focus on new and promising initiatives, but this will not happen where the company culture overly associates “success” with “current revenue managed.”

Clayton Christensen & Michael Raynor extensively discussed the tension between new and existing businesses in companies in their excellent book The Innovator’s Solution, which I reviewed here.

Recently John Chambers, the CEO of CISCO, came out with a memo that discussed failings in the company. Over the last decade or so CISCO (CSCO) has lagged performance of its peers on NASDAQ and recently they haven’t participated much in the broad market rally (down 20% or so in the last 6 months while NASDAQ is up by 16%). I read how the memo was portrayed in the media, but then I found the actual memo here and cite it directly.

You’ve also made it very clear that we must make it simpler to do the work we love to do, and to accelerate the impact we know we are making for our customers… As I’ve said, our strategy is sound. It is aspects of our operational execution that are not. We have been slow to make decisions, we have had surprises where we should not, and we have lost the accountability that has been a hallmark of our ability to execute consistently for our customers and our shareholders. That is unacceptable. And it is exactly what we will attack.

What is interesting to me is that I was just sort of waiting for this to occur. Back in 2009 I read about CISCO’s new team based model here in this WSJ article titled “CISCO CEO John Chambers Big Management Experiment“. From the article:

Now executives work on committees—dubbed councils and boards in Cisco-ese—and the company makes 70% of its decisions collaboratively, up from 10% just two years ago.
 
The moves have been controversial at Cisco. About 20% of the company’s senior leaders have left since the shift began in 2007—a percentage organizational experts call unusually high. Chambers compares the executives who’ve departed to basketball stars who don’t fit into a team’s system and adds that Cisco is better off without them despite their talent. He says the old Cisco, which relied on a handful of people to oversee new efforts, would never have been able to pursue so many opportunities.
 
Critics of the new structure say that it adds bureaucracy and strips away accountability. Cisco has lost market share in key product categories recently, and some people who have worked under the new structure draw a line between these losses and the management-by-committee approach.

The core idea of the business enterprise and entrepreneur-ship is all about leadership, accountability and personal responsibility. Businesses aren’t non profit organizations, they aren’t schools, and they aren’t after-school specials. They are serious efforts, with salaries and families and cities on the line, and people need to be given roles and held to the results that they committed to. These aren’t concepts that can be maintained through revolving committees where no one is responsible. Trying isn’t good enough.

And another reason this is doomed…

Chambers says the idea for the new management structure came to him while participating in a collaboration exercise at the 2007 World Economic Forum in Davos, Switzerland. He was on a team with Arianna Huffington, among others, and the group was told to present a vision for life in 2015.

Awesome. Getting ideas for how to run a world-class company from dilettantes in Davos and a blogger, albeit one who was able to turn her re-posted “content” into actual cash through the dying AOL banner (don’t ever underestimate the power of cashing out at the right time).

It is odd that Chambers thought that he was big enough to stand the lifetime of experience on management on its head and go with this ludicrous team concept. Not team in EXECUTION, which is critical, but in RESPONSIBILITY, which is doom. Someone has to stand up and make decisions and take the heat or fall for bad decisions, and you can’t fire everyone in a committee.

This isn’t the first time Chambers has been blinded by faddish ideas. I was with a consulting firm that was a partner with CISCO in the first dot-com boom and at the time CISCO was touting their “fast close” and their ability to rapidly forecast sales and earnings. This occurred right before the markets crashed and they had to write off millions of dollars in unsold inventory, basically proving that their forecasts weren’t worth the paper they were printed on (or the internet space taken up explaining them, since this is now a virtual world).

Cross posted at LITGM