Management

Book Review: Father, Son, & Co, by Thomas Watson jr (rerun)

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(Today marks the 59th anniversary of the announcement of the IBM System/360 series)

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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Productivity Problems: Is ‘Shunning Technology’ Really the Main Villain?

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Andy Kessler, a very smart and generally insightful guy, has a recent WSJ column titled ‘The is One Puzzling Job Market’ and subtitled ‘Why has productivity lagged for so long? Because huge sectors shunned technology.’

This assertion doesn’t feel right to me.  In the case of the healthcare industry, for example, Kessler says “Medicine is unproductive. It’s a doctor-intensive chronic-disease-treatment business. But with prevention and diagnostics to find disease early, perhaps we’d need fewer oncologists and cardiac surgeons.” Perhaps, but it’s not as if diagnostics–mammograms, for example–have been ignored.  Prevention can involve, for example, better diets and obesity reduction–these things are really more about accurate science, proper statistical analysis, and honest and effective public communication than they are about technology per se.

A major technology initiative in healthcare of the the last decade or two has been the wide use of electronic medical records.  While these do have considerable potential, the current implementation reality is different.  I don’t think I have ever heard or read a physician or other healthcare professionals who had anything good to say about these systems.  The perceived productivity impact is negative.

It is certainly true that telemedicine has great potential for productivity improvements, and also probably for better paytient outcomes, since it makes it far easier to get an appointment than is the case with traditional practice approaches.  But some of the same advantages can also come from local clinics with an emphasis on quick availability and more use of nurse practitioners and other alternatives to the need to see physicians for every visit.

As another example of an industry with poor productivity, Kessler cites education.  I think we can agree on the poor productivity. But is the problem really lack of technology? How about the massive administrative overheads, the insistence on instructional methods that don’t work very well (in teaching reading, for example), and the overweening power of the teachers’ unions?  Indeed, schools have been quite eager to spend money on ‘technology’.   The kind of projects that Michael Schrage referred to as ‘sparkly tools’ will not do much good until these other problems are addressed.

In transportation, there are indeed technology improvements that can be made in air traffic control and, for railroads, in rail car tracking and hot-bearing detection to prevent derailments, for example.  But there are also physical infrastructure issues–no matter how great your air traffic control system is, an airport’s capacity is going to be limited by the number of parallel runways, and, in some wind conditions, the availability of crosswind runways.  There are also management and process issues–in freight rail, for example, is the current vogue employment of very long trains, now under the banner of ‘precision scheduled railroading’, really a good idea from the standpoints of productivity and market growth?

Kessler says:  “Bell Labs invented the transistor in 1948, but its parent, AT&T,  had 10 to 20 years of old vacuum-tube inventory and so delayed using transistors.”  This claim makes no sense to me.  I can’t imagine that any company, even AT&T would have built up a 10-20 year inventory of just about any commodity, let alone inventory of items in a field which was already known for rapid change.  And early transistors weren’t cheap, and did have their limitations.

There is indeed an apparent paradox when you consider all the technological improvements of recent years–and then look at the productivity numbers.  But I suspect that much of the cause for this disconnect will be found in:

Mediocre or outright bad management. There is a tremendous amount of wasted motion and effort in a lot of organizations today. There’s always some of this, of course, but my sense is that it’s been getting worse, rather than better.  See for example this article about Google, written by a guy whose startup was acquired by that company.

Google has 175,000+ capable and well-compensated employees who get very little done quarter over quarter, year over year. Like mice, they are trapped in a maze of approvals, launch processes, legal reviews, performance reviews, exec reviews, documents, meetings, bug reports, triage, OKRs, H1 plans followed by H2 plans, all-hands summits, and inevitable reorgs. 

Unwise mergers and acquisitions.  Although company combinations can be beneficial, too often they are done under sets of assumptions that turn out to be, shall we say, optimistic.  How much productivity is lost as a result of all the legal and finance work done to enable these combinations and in the organizational disruption that often follows?  (And then, in some cases, to unwind them via a spinout?)

Excessive regulation, particularly ideologically-driven regulation.  In Washington, DC, childcare workers will now be required to have associates’ degrees.  There are many other examples of pointless education and training requirements.  And the ‘industrial strategy’ programs favored by the Biden administration are very likely to direct resources into politically-favored…but not particularly productive..companies and entire industries.

Bad technology implementations.  There are a lot of examples of technology implementations that seemed promising, but resulted in either complete failure or marginal…if any…productivity gains.  Often, there problems are a result of failing to systematically think about the overall business process and the potential people problems involved.  See the sad story of Target Canada, and Zeynep Ton’s description of retail inventory systems that carry meaningless balances because the work of the checkers, and the way in which the feedback loop from goods availability to sales numbers worked, is not properly understood.

There are certainly many technologies now available, and becoming available, that can greatly enhance productivity.  But it is difficult for any technology or combination of technologies to improve productivity enough to overcome the drag of the structural problems sketched about..and many others.  As Lewis Carroll said, we must run as fast as we can just to stay in place, and if we want to go anywhere, we must run twice as fast as that.  Unless we do something about the sources of the persistent backward motion.

Your thoughts on productivity and technology?

Trafalgar, 1805, and the USA, 2022

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Trafalgar Day was marked last week, and I remembered again the essay written in 1797 by a Spanish naval official, Don Domingo Perez de Grandallana, on the question:  “Why do we keep losing to the British, and what can we do about it?”

An Englishman enters a naval action with the firm conviction that his duty is to hurt his enemies and help his friends and allies without looking out for directions in the midst of the fight; and while he thus clears his mind of all subsidiary distractions, he rests in confidence on the certainty that his comrades, actuated by the same principles as himself, will be bound by the sacred and priceless principle of mutual support.

Accordingly, both he and his fellows fix their minds on acting with zeal and judgement upon the spur of the moment, and with the certainty that they will not be deserted. Experience shows, on the contrary, that a Frenchman or a Spaniard, working under a system which leans to formality and strict order being maintained in battle, has no feeling for mutual support, and goes into battle with hesitation, preoccupied with the anxiety of seeing or hearing the commander-in-chief’s signals for such and such manoeures…

Thus they can never make up their minds to seize any favourable opportunity that may present itself. They are fettered by the strict rule to keep station which is enforced upon then in both navies, and the usual result is that in one place ten of their ships may be firing on four, while in another four of their comrades may be receiving the fire of ten of the enemy. Worst of all they are denied the confidence inspired by mutual support, which is as surely maintained by the English as it is neglected by us, who will not learn from them.

Imagine Don Grandallana’s feelings when, eight years later, he read the reports of the Spanish naval catastrophe at Trafalgar.  He had accurately diagnosed the key problems of his side, but had been unable to bring about the sweeping changes necessary to address them.

There are uncomfortable parallel in America today to the polities and mindset that Grandallana observed in his headed-for-defeat Spain.

Over at Ricochet, the physician who posts as Dr Craniotomy describes the extent to which his time is devoted to satisfying the bureaucracy and its systems.

It’s 9 p.m. on a Friday and I’m waiting for my hospital’s slow, clunky electronic health record (EHR) to load. I’m logging in from home because the administration emails became threatening.,,,The patients were already seen by me, and the notes written by either a resident or nurse practitioner.  The hospital just can’t bill until I click the “cosign” button. 

Meanwhile, there’s this JAMA article outlining how the National Academy of Medicine is going to tackle physician burnout.  The plan revolves around installing a “culture of well-being” into the healthcare workplace.  They want to develop training protocols to address discrimination, bullying, and harassment while increasing leadership roles such as Chief Wellness Officers.  This sounds like more bureaucratic busywork to complete and administrators to answer to.  I would be shocked to find out that there was a single aliquot of improved wellness from a wellness module.

I have governmentally mandated appropriate use criteria that questions every imaging order I place on a patient, forcing me to click box after box, justifying an MRI that I know is clinically indicated because I spent 12 years training in neurological surgery to know exactly when an MRI is indicated.

I have the joint commission telling me I’m not prescribing enough pain medication one day and the next day, I’m being threatened with manslaughter charges if I don’t check a slow, cumbersome, often nonfunctional online database every time I write a prescription.

As I noted in comments to the post:  The “culture of compliance” and the micromanagement of employees by bureaucracies and by rigid automated systems, as practiced in America today, bear a disturbing resemblance to the cultural practices that Don de Grandallana identified as the main cause of his country’s repeated defeats.

There is a great deal of this kind of thing in many parts of America today, and trends have been running that way for a long time.  See this Washington Post article from 2005, back when the WP was not yet totally politicized:  Over-Ruled.  Discussing hurricane response and some of the bureaucratic obstacles that appeared, the author says:  “We’ve become a society of rule-followers and permission-seekers.”

Causes of this situation are multiple; certainly one factor is the prevalence of litigation.  Another is the proliferation of top-down automated systems.  And one factor, I think is the excessive emphasis on formal education and the associated credentials.   In his post The Most Precious Resource is Agency, Simon Sarris observes that when looking at people who became highly successful in earlier times, “the individuals were all doing from a young age, as opposed to merely schooling.”

He goes on to say:

It seems that the more you ask of people, and the more you have them do, the more they are able to later do on their own. It is important to note that while we shouldn’t allow children to be bobbin boys, no one would describe Steve Job’s summer job at 13 as his exploitation. We should be thinking much harder about making sure children can make meaningful contributions to the world.

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And I suspect the downplaying of agency in childhood not only creates fewer opportunities for great people, it must also create more marginal people. Ushering everyone into an endless default script is disastrous when underlying conditions or assumptions change. Even when they don’t, some people exit academia almost terrified to leave (to interact with the “real world”), a kind of Stockholm syndrome.

Does an assumption that people will spend 16 or 20 consecutive years in formal education…and the related assumption that this formal education will be the most important factor in their future success or lack of same…reduce the sense of individual agency? I think it probably does.

Also, this brings us to another factor that Grandallana did not mention, either because he didn’t see it as a problem or because he didn’t dare talk about it: the dominance of a hereditary aristocracy.  I think it’s pretty clear to historians now that one major reason for Spain’s naval failures was that people tended to be placed in command positions because of their titles and bloodlines, rather than their demonstrated competence.

We don’t have a formal aristocracy in the US, of course; indeed, the Constitution explicitly prohibits any such thing.  But while educational credentialism was initially sold as a form of meritocracy, and indeed did initially lead to some progress in that direction, it has devolved in too many cases to a form of aristocracy light, where obtaining the most ‘elite’ credential is largely a matter of conducting your early life in a manner of which admissions officers approve–including demonstrating the ‘right’ social attitudes–and, often, of having the right family and connections, rather than a matter of true performance-related merit.

More than 50 years ago, Peter Drucker wrote that a major advantage America had over Europe is that access to key roles in society was not controlled by a admission to a small number of ‘elite’ universities.

The Harvard Law School might like to be a Grande Ecole and to claim for its graduates a preferential position. But American society has never been willing to accept this claim…

American society today is much closer to accepting that and similar claims than it was when Drucker wrote the above in 1969, and I think this has something to do with the dysfunctionality of many of our institutions.

For discussion: How far are we down the road to the kind of environment that Grandallana described? What are the causes, and what are the potential paths for reversal?

Worthwhile Reading & Viewing

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Our friend Bookworm has great photos from her trip to the Porcupine Mountains in Michigan.

Speaking of photographs,  Nikon’s Small World has an extensive collection of images captured by the light microscope.

A mosaic depicting the Trojan War has been found in Syria.

The most precious resource is agency.  Excerpt:

Seizing opportunity requires opportunity to exist at all. And I suspect the downplaying of agency in childhood not only creates fewer opportunities for great people, it must also create more marginal people. Ushering everyone into an endless default script is disastrous when underlying conditions or assumptions change. Even when they don’t, some people exit academia almost terrified to leave (to interact with the “real world”), a kind of Stockholm syndrome. How could we celebrate a higher learning that creates something so pathetic, the opposite of a readiness for life?

What is going on in the world’s art museums?

Organizational cultures and product failures. (at Twitter)

A very interesting analysis of the embedded energy associated with various products.

This natural resources investment firm suggests that the reductions in the cost of wind and solar technologies has been driven not primarily by a Moore’s-law-like learning curve, but rather by reductions in energy and capital costs.

The energy transition of the last 700 years: trends in the share of economies consumed by acquiring food and fuel.

Book Review: Rockets and People – Sputnik 65th Anniversary Rerun

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Rockets and People, by Boris E Chertok

Boris Chertok’s career in the Russian aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.”  In this series, Chertok really does suck you into his world.

Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.

Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”

Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and  “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”

So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.”  Zero tolerance!

Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position.  Later in his career, he would also wind up in difficulties because of his Jewish heritage.

The memoir includes dozens of memorable characters, including:

*Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.

*Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.

*Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.

*Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.

*Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)

*Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.

*Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.

*Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime.  Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944.  A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out.  His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.

Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.

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