Management

Musings on Tyler’s Technological Thoughts

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Tyler Cowen, in his recent book Average Is Over, argues that computer technology is creating a sharp economic and class distinction between people who know how to effectively use these “genius machines” (a term he uses over and over) and those who don’t, and is also increasing inequality in other ways. Isegoria recently excerpted some of his Tyler’s comments on this thesis from a recent New Yorker article.

I read the book a couple of months ago, and although it’s worth reading and is occasionally thought-provoking, I think much of what Tyler has to say is wrong-headed. In the New Yorker article, for example, he says:

The first (reason why increased inequality is here to stay) is just measurement of worker value. We’re doing a lot to measure what workers are contributing to businesses, and, when you do that, very often you end up paying some people less and other people more.

The second is automation — especially in terms of smart software. Today’s workplaces are often more complicated than, say, a factory for General Motors was in 1962. They require higher skills. People who have those skills are very often doing extremely well, but a lot of people don’t have them, and that increases inequality.

And the third point is globalization. There’s a lot more unskilled labor in the world, and that creates downward pressure on unskilled labor in the United States. On the global level, inequality is down dramatically — we shouldn’t forget that. But within each country, or almost every country, inequality is up.

Taking the first point: Businesses and other organizations  have been measuring “what workers are contributing” for a long, long time. Consider piecework. Sales commissions. Criteria-based bonuses for regional and division executives. All of these things are very old hat.  Indeed, quite a few manufacturers have decided that it is unwise to take the quantitative measurement of performance down to an individual level, in cases where the work is being done by a closely-coupled team.

It is true that advancing computer technology makes it feasible to measure more dimensions of an individual’s work, but so what? Does the fact that I can measure (say) a call-center operator on 33 different criteria really tell me anything about what he is contributing the the business?

Anyone with real-life business experience will tell you that it is very, very difficult to create measurement and incentive plans that actually work in ways that are truly beneficial to the business. This is true in sales commission plans, it is true in manufacturing (I talked with one factory manager who said he dropped piecework because it was encouraging workers to risk injury in order to maximize their payoffs), and it is true in executive compensation. Our blogfriend Bill Waddell has frequently written about the ways in which accounting systems can distort decision-making in ultimately unprofitable ways. The design of worthwhile measurement and incentive plans has very little to do with the understanding of computer technology; it has a great deal to do with understanding of human nature and of the deep economic structure of the business.

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The Rot Comes from the Top

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Remember last year’s scandal about the Secret Service goings-on in Cartagena? The trouble started when one of them stiffed a prostitute.

Insurance companies have been in bed with Obama/Obamacare from the beginning. Yesterday he tried to stiff them by royal decree.

Good role model for his underlings, no?

Obamacare, WWII, and Why Effective Leaders Need Strong Subordinate Leaders

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Over at Sister Toldjah, Phineas cites an email which notes:

Putting things in perspective: March 21st 2010 to October 1 2013 is 3 years, 6 months, 10 days.  December 7, 1941 to May 8, 1945 is 3 years, 5 months, 1 day.  What this means is that in the time we were attacked at Pearl Harbor to the day Germany surrendered is not enough time for this progressive federal government to build a working webpage.  Mobilization of millions, building tens of thousands of tanks,  planes, jeeps, subs, cruisers, destroyers, torpedoes, millions upon millions of guns, bombs, ammo, etc. Turning the tide in North Africa,  Invading Italy, D-Day,  Battle of the Bulge, Race to Berlin all while we were also fighting the Japanese in the Pacific!!  And in that amount of time this administration can’t build a working webpage.

To be fair, the Obamacare support system is more than just a “webpage”…it also encompasses various back-end information-exchange systems. Still, it is a system that did not require the development of any truly new technologies or any conceptual breakthroughs in the use of existing technologies. Compared to any of a large number of WWII technology, manufacturing, and logistics efforts…proximity-fused ammunition, airborne radar, computer-based codebreaking, mass-production of airplanes and ships, the petroleum pipeline under the English Channel…the Obamacare support system is a very small thing indeed.

History and experience teach us that large, complex, time-critical programs only get done successfully when they are run by individuals who are tough-minded, possessed of practical wisdom, and willing to put their careers on the line to accomplish the goal…and when higher authority is willing to delegate sufficient scope and empowerment to such leaders. A couple of years ago, I wrote about one example of such a leader: General Bernard Schriever, who ran USAF ballistic missile programs.

In order to achieve his goal of delivering Atlas and other missile programs in the required time frames, General Schriever found it necessary to break a lot of china. For example, when  Secretary of the Air Force Harold Talbott, ordered him to relocate certain missile facilities from the west cost to the midwest (supposedly based on industrial dispersion for survivability, but actually probably driven by political factors) 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!”

I don’t think people with strength of character like that of Bernard Schriever do very well in the Obama administration or that they remain with it for very long. A man who can say, as Obama did, “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” is a very small man. Small men tend to hire and retain only other small men and women.

And small men and women don’t run large and complex projects effectively.

 

How to be an Executive Who Learns/Does Not Learn

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Here’s David Cote, CEO of Honeywell Inc:

Your job as a leader is to be right at the end of the meeting, not at the beginning of the meeting.

And here’s Barack Obama, President of the United States:

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.

Is it likely that a person with the latter worldview will come out of a meeting knowing/understanding more than he did when he went into it?

“I Am Not a Crook”

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…said Richard Nixon, famously. Comes now Joe Biden, with “I am not a geek.” Specifically, in responding to questions about the problems with the Obamacare website and its supporting systems, Biden said:

“Neither (the president) or I are technology geeks and we assumed that it was up and ready to run.”

I don’t think the main problems with this implementation have to do with a lack of geekitude–most likely, there are many quite competent software developers working on this project–but rather with a lack of effective management. (And if there is a shortage of competent developers on the project, well, that’s a management issue, too, isn’t it.)

Real managers, real executives, don’t assume that important things will be ready when they’re supposed to be ready, and they aren’t satisfied with superficial answers to superficial  questions, either. These effective leaders are people who have developed effective questioning skills so they can find out what is really going on. They establish open, non-fear-based organizational cultures so that people with concerns feel able to bring them forward. As I noted in my post about Benghazi (excusing failure by pleading incompetence), it is the responsiblity of an executive to  establish  an information and decision-flow architecture…including clear assignment of responsibilities…to ensure that the right things are seen and acted upon by the right people at the right time. Failure to do this..and to maintain and tune the system over time…will predictably result in catastrophes.

Later in the interview with Biden, the Vice President also said he didn’t know the specifics of why the website isn’t working, but that he was told the platform “is fine, but they have to change an awful lot of the inputs.”

“Look, all I know is they talk about 50,000 lines of this and this, I don’t know the technical reasons,” Biden said.

”So I don’t know, I wish I could tell you, that’s why I became a lawyer,”

A pretty flippant response to a serious situation. Slow Joe might not be able to understand the technical reasons for the failure, but he should be able–if he were competent at his job–to investigate and understand the management reasons for the failure.

Some of the questions that come to mind about this debacle are: How were the contractors selected? Why was it decided to have the government (CMS) act as prime contractor, rather than choosing an external company for that role? What do the contracts with the outside contractors actually specify, in terms of deliverables? What remedies are provided in the contracts for failures in delivery? If these remedies are inadequate, why did the government not require that they be more stringent? What coordination vehicles were there between the government group writing and interpreting the Obamacare regulations and the separate group that was attempting to act as prime contractor? Was there a single individual in charge? What project scheduling and tracking methods were employed throughout this effort?

These are not issues that are specific to software technology–the above questions are ones that any good executive, whether his background is in construction or in theater or in wholesale distribution, would understand that he should ask.

A United States President is not elected as a philosopher king; he is elected to run the executive departments of government and to faithfully execute the laws passed by Congress. The members of the present administration have repeatedly demonstrated their utter incompetence to perform these tasks.

An administration that seeks endless expansion of government’s role–but is at the same time completely incompetent at carrying out basic executive tasks–will drive expanding circles of chaos throughout ever-broader reaches of American society and the American economy.