Stick to Your Knitting

Man knitting
Man in suit sticking to his knitting. Photo by fokusgood / Shutterstock

6 June 2019 – Once upon a time in an MBA school far, far away, I took a Marketing 101 class. The instructor, whose name I can no longer be sure of, had a number of sayings that proved insightful, bordering on the oracular. (That means they were generally really good advice.) One that he elevated to the level of a mantra was: “Stick to the knitting.”

Really successful companies of all sizes hew to this advice. There have been periods of history where fast-growing companies run by CEOs with spectacularly big egos have equally spectacularly honored this mantra in the breach. With more hubris than brains, they’ve managed to over-invest themselves out of business.

Today’s tech industry – especially the FAANG companies (Facebook, Amazon, Apple, Netflix and Google) – is particularly prone to this mistake. Here I hope to concentrate on what the mantra means, and what goes wrong when you ignore it.

Okay, “stick to your knitting” is based on the obvious assumption that every company has some core expertise. Amazon, for example, has expertise in building and operating an online catalog store. Facebook has expertise in running an online forum. Netflix operates a bang-up streaming service. Ford builds trucks. Lockheed Martin makes state-of-the-art military airplanes.

General Electric, which has core expertise in manufacturing industrial equipment, got into real trouble when it got the bright idea of starting a finance company to extend loans to its customers for purchases of its equipment.

Conglomeration

There is a business model, called the conglomerate that is based on explicitly ignoring the “knitting” mantra. It was especially popular in the 1960s. Corporate managers imagined that conglomerates could bring into play synergies that would make conglomerates more effective than single-business companies.

For a while there, this model seemed to be working. However, when business conditions began to change (specifically interest rates began to rise from an abnormally low level to more normal rates) their supposed advantages began melting like a birthday cake left outside in a rainstorm. These huge conglomerates began hemorrhaging money until vultures swooped in to pick them apart. Conglomerates are now a thing of the past.

There are companies, such as Berkshire Hathaway, whose core expertise is in evaluating and investing in other companies. Some of them are very successful, but that’s because they stick to their core expertise.

Berkshire Hathaway was originally a textile company that investor Warren Buffett took over when the textile industry was busy going overseas. As time went on, textiles became less important and, by 1985 this core part of the company was shut down. It had become a holding company for Buffett’s investments in other companies. It turns out that Buffett’s core competence is in handicapping companies for investment potential. That’s his knitting!

The difference between a holding company and a conglomerate is (and this is specifically my interpretation) a matter of integration. In a conglomerate, the different businesses are more-or-less integrated into the parent corporation. In a holding company, they are not.

Berkshire Hathaway is known for it’s insurance business, but if you want to buy, say, auto insurance from Berkshire Hathaway, you have to go to it’s Government Employees Insurance Company (GEICO) subsidiary. GEICO is a separate company that happens to be wholly owned by Berkshire Hathaway. That is, it has its own corporate headquarters and all the staff, fixtures and other resources needed to operate as an independent insurance company. It just happens to be owned, lock, stock and intellectual property by another corporate entity: Berkshire Hathaway.

GEICO’s core expertise is insurance. Berkshire Hathaway’s core expertise is finding good companies to invest in. Some are partially owned (e.g., 5.4% of Apple) some are wholly owned (e.g., Acme Brick).

Despite Berkshire Hathaway’s holding positions in both Apple and Acme Brick, if you ask Warren Buffet if Berkshire Hathaway is a computer company or a brick company, he’d undoubtedly say “no.” Berkshire Hathaway is a diversified holding company.

It’s business is owning other businesses.

To paraphrase James Coburn’s line from Stanley Donen’s 1963 film Charade: “[Mrs. Buffett] didn’t raise no stupid children!”

Why Giant Corporations?

All this giant corporation stuff stems from a dynamic I also learned about in MBA school: a company grows or it dies. I ran across this dynamic during a financial modeling class where we used computers to predict results of corporate decisions in lifelike conditions. Basically, what happens is that unless the company strives to its utmost to maintain growth, it starts to shrink and then all is lost. Feedback effects take over and it withers and dies.

Observations since then have convinced me this is some kind of natural law. It shows up in all kinds of natural systems. I used to think I understood why, but I’m not so sure anymore. It may have something to do with chaos, and we live in a chaotic universe. I resolve to study this in more detail – later.

But, anyway … .

Companies that embrace this mantra (You grow or you die.) grow until they reach some kind of external limit, then they stop growing and – in some fashion or other – die.

Sometimes (and paradigm examples abound) external limits don’t kick in before some company becomes very big, indeed. Standard Oil Company may be the poster child for this effect. Basically, the company grew to monopoly status and, in 1911 the U.S. Federal Government stepped in and, using the 1890 Sherman Anti-Trust Act, forced its breakup into 33 smaller oil companies, many of which still exist today as some of the world’s major oil companies (e.g., Mobil, Amoco, and Chevron). At the time of its breakup, Standard Oil had a market capitalization of just under $11B and was the third most valuable company in the U.S. Compare that to the U.S. GDP of roughly $34B at the time.

The problem with companies that big is that they generate tons of free cash. What to do with it?

There are three possibilities:

  1. You can reinvest it in your company;

  2. You can return it to your shareholders; or

  3. You can give it away.

Reinvesting free cash in your company is usually the first choice. I say it is the first choice because it is used at the earliest period of the company’s history – the period when growth is necessarily the only goal.

If done properly reinvestment can make your company grow bigger faster. You can reinvest by out-marketing your competition (by, say, making better advertisements) and gobbling up market share. You can also reinvest to make your company’s operations more effective or efficient. To grow, you also need to invest in adding production facilities.

At a later stage, your company is already growing fast and you’ve got state-of-the-art facilities, and you dominate your market. It’s time to do what your investors gave you their money for in the first place: return profits to them in the form of dividends. I kinda like that. It’s what the game’s all about, anyway.

Finally, most leaders of large companies recognize that having a lot of free cash laying around is an opportunity to do some good without (obviously) expecting a payback. I qualify this with the word “obviously” because on some level altruism does provide a return in some form.

Generally, companies engage in altruism (currently more often called “philanthropy”) to enhance their perception by the public. That’s useful when lawsuits rear their ugly heads or somebody in the organization screws up badly enough to invite public censure. Companies can enhance their reputations by supporting industry activities that do not directly enhance their profits.

So-called “growth companies,” however, get stuck in that early growth phase, and never transition to paying dividends. In the early days of the personal-computer revolution, tech companies prided themselves on being “growth stocks.” That is, investors gained vast wealth on paper as the companies’ stock prices went up, but couldn’t realized those gains (capital gains) unless they sold the stock. Or, as my father once did, by using the stock for collateral to borrow money.

In the end, wise investors eventually want their money back in the form of cash from dividends. For example, in the early 2000s, Microsoft and other technology companies were forced by their shareholders to start paying dividends for the first time.

What can go wrong

So, after all’s said and done, why’s my marketing professor’s mantra wise corporate governance?

To make money, especially the scads of money that corporations need to become really successful, you’ve gotta do something right. In fact, you gotta do something better than the other guys. When you know how to do something better than the other guys, that’s called expertise!

Companies, like people, have limitations. To imagine you don’t have limitations is hubris. To put hubris in perspective, recall that the ancients famously made it Lucifer’s cardinal sin. In fact, it was his only sin!

Folks who tell you that you can do anything are flat out conning your socks off.

If you’re lucky you can do one thing better than others. If you’re really lucky, you can do a few things better than others. If you try to do stuff outside your expertise, however, you’re gonna fail. A person can pick themselves up, dust themselves off, and try again – but don’t try to do the same thing again ‘cause you’ve already proved it’s outside your expertise. People can start over, but companies usually can’t.

One of my favorite sayings is:

Everything looks easy to someone who doesn’t know what they’re doing.

The rank amateur at some activity typically doesn’t know the complexities and pitfalls that an expert in the field has learned about through training and experience. That’s what we know as expertise. When anyone – or any company – wanders outside their field of expertise, they quickly fall foul of those complexities and pitfalls.

I don’t know how many times I’ve overheard some jamoke at an art opening say, “Oh, I could do that!”

Yeah? Then do it!

The artist has actually done it.

The same goes for some computer engineer who imagines that knowing how to program computers makes him (or her) smart, and because (s)he is so smart, (s)he could run, say, a magazine publishing house. How hard can it be?

Mark Zuckerberg is in the process of finding out.

Restorations

Restorations Cover Image
Restorations, by Charles Strickler

1 April 2019 – I typically pick as a subject for my weekly post some topic of general interest, such as politics or the interaction between technology and society (which is actually the avowed focus of this blog). This week, however, I’ve decided to look at something else that commands an inordinate share of my mental attention: fictional literature. Specifically, a mystery novel I just read entitled Restorations by Charles Strickler.

To be honest, novels aren’t that far afield for this blog. This space’s avowed focus is, as I said above, the interaction between technology and society. Novels, being works of fiction, provide one of the most fertile fields for exploring abstract ideas like the interaction between technology and society. Actually, the most fertile field for exploring that topic is the narrow genre of grounded (or “hard”) science fiction mystery writing. It allows the writer the widest scope for evoking the reader’s willing suspension of disbelief while exploring how evolving technology interacts with existing social mores.

That’s not exactly the genre of the particular novel I’ve just finished reading, however. Restorations is more like a conventional mystery story. Unlike a typical grounded-science-fiction mystery, in which the action generally inhabits the temporal space extending from the present through the near future, Restorations inhabits the temporal space from the historically recent past through the present. Specifically, the novel’s plot is driven by one man’s efforts to unearth the story of one artifact (a 1928 Stutz Black-Hawk Boattail Roadster) and how those efforts embroil him in the fate of a modern-day crime family.

The title takes the plural form because the author interweaves multiple stories of restoration into his narrative. There is, of course, the physical restoration of the Stutz sports car his protagonist (Miles West) almost accidentally acquires at an estate auction. On a more symbolic level, however, there is the restoration of West’s joie de vivre, which took a nosedive after a series of personal disasters spiraled him into the depths of depression. A third restoraton story is that of the fractured Bello family, one half devoted to organized crime while the other half is devoted to philanthropy and civic order. Finally, there is restoration of the treasure amassed by the car’s first owner, the notorious bandit “Lefty” Webber, to the heirs of the people he robbed. There are additional restorations chronicled – more than the four the author promises on his website – but I’m going to leave them for you to discover by reading the book.

I must, however, mention the restoration story of West’s love interest, Bramley Ann Fairchild, whose love of historical investigation had been submerged in the day-to-day tedium of an underling in a large auction house. A tedium that was spectacularly relieved by the danger of competing with the Bello Crime Family in a transcontinental race to secure Webber’s long hidden treasure, the clues to which were hidden in secret compartments a custom coach builder had incorporated into the Stutz’ body work.

One negative note, however: I too often found myself thinking, “Oh no. Don’t drag out that old chestnut!” when one of Strickler’s descriptions or plot devices looked oh-so-familiar from previous literature. I generally want to be wowed by greater creativity from a mystery author.

But, then again, I’ve always said: “My best ideas are stolen!”

Someone once asked if that meant “My best ideas were stolen by someone else, or that I had stolen them from someone else?”

I simply answered: “Yes.”

I also detected several minor editing gaffes: places where clumsy or inaccurate wording got into print, or just out-and-out typos. Again, I should be careful about making that criticism. Every time I re-read one of my own previously published novels, I’m embarrassed to find similar mistakes that made it into print.

Paraphrasing the immortal words of Arlo Guthrie: I’ve “gotta lotta damn gall” to chide another author for making mistakes that I make so often myself!

Altogether, Restorations is a well-written novel with compelling characters, a plot sufficiently complex to induce page turning, and lots of clear description to keep it all interesting. Unlike most of the first-time novels I get to read, Strickler’s prose is clear, unambiguous and largely hangs together logically.

I’d like to see him expand on some of the episodes that make up the plot, but there’s nothing actually missing from his narrative, just some turns down dark alleys that left me wondering what he might have found at the other end, even if it made no difference to the story.

Perhaps he’ll choose to follow such leads more in his next “Miles and Bramley” mystery! He and the book’s publisher, Koehler Books, promises that Restorations is but the first book in a series. I look forward to reading the next!

How to Train Your Corporate Rebel

Tebel Talent Cover
Rebel Talent by Francesca Gino makes the case for encouraging individualism in the workplace

13 March 2019 – Francesca Gino, author of Rebel Talent: Why It Pays to Break the Rules at Work and In Life, is my kind of girl. She’s smart, thinks for herself, isn’t afraid to go out on a limb, and encourages others to do the same.

That said, I want to inject a note of caution for anyone considering her advice about being a rebel. There’s an old saying: “The nail that sticks up the most is the first to get hammered down.” It’s true in carpentry and in life. Being a rebel is lonely, dangerous, and is no guarantee of success, financial or otherwise.

I speak from experience, having broken every rule available for as long as I can remember. When I was a child in the 1950s, I wanted to grow up to be a beatnik. I’ve always felt most comfortable amongst bohemians. My wife once complained (while we were sitting in a muscle car stopped by the highway waiting for the cop to give me a speeding ticket) about my “always living on the edge.” And, yes, I’ve been thrown out of more than one bar.

On the other hand, I’ve lived a long and eventful life. Most of the items on my bucket list were checked off long ago.

So, when I ran across an ad in The Wall Street Journal for Gino’s book, I had to snag a copy and read it.

As I expected, the book’s theme is best summed up by a line from the blurb on its dust jacket: “ … the most successful among us break the rules.”

The book description goes on to say, “Rebels have a bad reputation. We think of them as trouble-makers. outcasts, contrarians: those colleagues, friends, and family members who complicate seemingly straight-forward decisions, create chaos, and disagree when everyone else is in agreement. But in truth, rebels are also those among us who change the world for the better with their unconventional outlooks. Instead of clinging to what is safe and familiar, and falling back on routines and tradition, rebels defy the status quo. They are masters of innovation and reinvention, and they have a lot to teach us.”

Considering the third paragraph above, I hope she’s right!

The 283-page (including notes and index) volume summarizes Gino’s decade-long study of rebels at organizations around the world, from high-end boutiques in Italy’s fashion capital (Milan), to the world’s best restaurant (Three-Michelin-star-rated Osteria Francescana), to a thriving fast-food chain (Pal’s), and an award-winning computer animation studio (Pixar).

Francesca Gino is a behavioral scientist and professor at Harvard Business School. She is the Tandon Family Professor of Business Administration in the school’s Negotiation, Organizations & Markets Unit. No slouch professionally, she has been honored as one of the world’s top 40 business professors under 40 by Poets & Quants and one of the world’s 50 most influential management thinkers by Thinkers50.

Enough with the “In Praise Of” stuff, though. Let’s look inside the book. It’s divided into eight chapters, starting with “Napoleon and the Hoodie: The Paradox of Rebel Status,” and ending with “Blackbeard, ‘Flatness,’ and the 8 Principles of Rebel Leadership.” Gino then adds a “Conclusion” telling the story of Risotto Cacio e Pepe (a rice-in-Parmigiano-Reggiano dish invented by Chef Massimo Bottura), and an “Epilogue: Rebel Action” giving advice on releasing your inner rebel.

Stylistically, the narrative uses the classic “Harvard Case Study” approach. That is, it’s basically a pile of stories, each of which makes a point about how rebel leaders Gino has known approach their work. In summary, the take-home lesson is that those leaders encourage their employees to unleash their “inner rebel,” thereby unlocking creativity, enthusiasm, and productivity that more traditional management styles suppress.

The downside of this style is that it sometimes is difficult for the reader to get their brain around the points that Gino is making. Luckily, her narrative style is interesting, easy to follow and compelling. Like all well-written prose she keeps the reader wondering “What happens next?” The episodes she presents are invariably unusual and interesting themselves. She regularly brings in her own exploits and keeps, as much as possible, to first-person active voice.

That is unusual for academic writers, who find it all too easy to slip into a pedantic third-person, passive-voice best reserved for works intended as sleep aids.

To give you a feel for what reading an HCS-style volume is like, I’ll describe what it’s like to study Quantum Dynamics. While the differences outnumber the similarities, the overall “feel” is similar.

The first impression students get of QD is that the subject is entirely anti-intuitive. That is, before you can learn anything about QD, you have to discard any lingering intuition about how the Universe works. That’s probably easier for someone who never learned Classical Physics in the first place. Ideas like “you can’t be in two places at the same time” simply do not apply in the quantum world.

Basically, to learn QD, you have to start with a generous dose of “willing suspension of disbelief.” You do that by studying stories about experiments performed in the late nineteenth century that simply didn’t work. At that time, the best minds in Physics spent careers banging their heads into walls as Mommy Nature refused to return results that Classical Physics imagined she had to. Things like the Michelson-Moreley experiment (and many other then-state-of-the-art experiments) gave results at odds with Classical Physics. There were enough of these screwy results that physicists began to doubt that what they believed to be true, was actually how the Universe worked. After listening to enough of these stories, you begins to doubt your own intuition.

Then, you learn to trust the mathematics that will be your only guide in QD Wonderland.

Finally, you spend a couple of years learning about a new set of ideas based on Through the Looking Glass concepts that stand normal intuition on its head. Piling up stories about all these counter-intuitive ideas helps you build up a new intuition about what happens in the quantum world. About that time, you start feeling confident that this new intuition helps you predict what will happen next.

The HCS style of learning does something similar, although usually not as extreme. Reading story after story about what hasn’t and what has worked for others in the business world, you begin to develop an intuition for applying the new ideas. You gain confidence that, in any given situation, you can predict what happens next.

What happens next is that when you apply the methods Gino advocates, you start building a more diverse corporate culture that attracts and retains the kinds of folks that make your company a leader in its field.

There’s an old one-line joke:

I want to be different – like everybody else.”

We can’t all be different because then there wouldn’t be any sameness to be different from, but we can all be rebels. We can all follow the

  1. READY!
  2. AIM!
  3. FIRE!

mantra advocated by firearms instructors everywhere.

In other words:

  1. Observe what’s going on out there in the world, then
  2. Think about what you might do that breaks the established rules, and, finally,
  3. Act in a way that makes the Universe a better place in which to live.

Farsighted Decisions

"Farsighted" book cover
Farsighted: How We Make the Decisions That Matter the Most by Steven Johnson

30 January 2019 – This is not a textbook on decision making.

Farsighted: How We Make the Decisions That Matter the Most does cover most of the elements of state-of-the-art decision making, but it’s not a true textbook. If he’d really wanted to write a textbook, its author, Steven Johnson, would have structured it differently, and would have included exercises for the student. Perhaps he would also have done other things differently that I’m not going to enumerate because I don’t want to write a textbook on state-of-the-art decision making, either.

What Johnson apparently wanted to do, and did do successfully, was lay down a set of principles today’s decision makers would do well to follow.

Something he would have left out, if he were writing a textbook, was the impassioned plea for educators to incorporate mandatory decision making courses into secondary-school curricula. I can’t disagree with this sentiment!

A little bit about my background with regard to decision-theory education: ‘Way back in the early 2010s, I taught a course at a technical college entitled “Problem Solving Theory.” Johnson’s book did not exist then, and I wish that it had. The educational materials available at the time fell woefully short. They were, at best, pedantic.

I spent a lot of class time waving my hands and telling stories from my days as a project manager. Unfortunately, the decision-making techniques I learned about in MBA school weren’t of any help at all. Some of the research Johnson weaves into his narrative hadn’t even been done back then!

So, when I heard about Johnson’s new book, I rushed out to snag a copy and devoured it.

As Johnson points out, everybody is a decision maker every day. These decisions run the gamut from snap decisions that people have to make almost instantly, to long-term deliberate choices that reverberate through the rest of their lives. Many, if not most, people face making decisions affecting others, from children to spouses, siblings and friends. Some of us participate in group decision making that can have truly global ramifications.

In John McTiernan’s 1990 film The Hunt for Red October, Admiral Josh Painter points out to CIA analyst Jack Ryan: “Russians don’t take a dump, son, without a plan. Senior captains don’t start something this dangerous without having thought the matter through.”

It’s not just Russians, however, who plan out even minor actions. And, senior captains aren’t the only ones who don’t start things without having thought the matter through. We all do it.

As Johnson points out, it may be the defining characteristic of the human species, which he likes to call Homo prospectus for their ability to apply foresight to advance planning.

The problem, of course, is the alarming rate at which we screw it up. As John F. Kennedy’s failure in the Bay of Pigs invasion shows, even highly intelligent, highly educated and experienced leaders can get it disastrously wrong. Johnson devotes considerable space to enumerating the taxonomy of “things that can go wrong.”

So, decision making isn’t just for leaders, and it’s easier to get it wrong than to do it right.

Enumerating the ways it can all go disastrously wrong, and setting out principles that will help us get it right are the basic objectives Johnson set out for himself when he first decided to write this book. To wit, three goals:

  • Convince readers that it’s important;

  • Warn folks of how easily it can be done wrong; and

  • Give folks a prescription for doing it right.

Pursuant to the third goal, Johnson breaks decision making down into a process involving three steps:

Mapping consists of gathering preliminary information about the state of the Universe before any action has been taken. What do we have to work with? What options do we have to select from? What do we want to accomplish and when?

Predicting consists of prognisticating, for each of the various options available, how the Universe will evolve from now into the foreseeable (and possibly unforeseeable) future. This is probably the most fraught stage of the process. Do we need a Plan B in case of surprises? As Sean Connery’s “Mac” character intones in Jon Amiel’s 1999 crime drama, Entrapment: “Trust me, there always are surprises.”

Deciding is the ultimate finish of the process. It consists of finally choosing between the previously identified alternatives based on the predicted results. What alternative is most likely to give us a result we want to have?

An important technique Johnson recommends basing your decision-making strategy on is narrative. That explicitly means storytelling. Johnson supplies numerous examples from both fiction and non-fiction that help us understand the decision-making process and help us apply it to the problems we face.

He points out that double-blind clinical trials were the single most important technique that advanced medicine from quackery and the witch-doctor’s art to reliable medical science. It allowed trying out various versions of medical interventions in a systematic way and comparing the results. In the same way, he says, fictional storytelling, allows us to mentally “try out” multiple alternative versions of future history.

Through storytelling, we explore various possibilities and imagine how they might turn out, including the vicissitudes of Shakespeare’s “slings and arrows of outrageous fortune,” without putting in the time and effort to try them out in reality, and thereby likely suffering “the fuss of mass destruction and death.”

Johnson suggests that’s why humans evolved the desire and capacity to create such fictional narratives in the first place. “When we read these novels,” he says, “ … we are not just entertaining ourselves; we are also rehearsing for our own real-world experiences.”

Of course, while “deciding” is the ultimate act of Johnson’s process, it’s never the end of the story in real life. What to do when it all goes disastrously wrong is always an important consideration. Johnson actually covers that as an important part of the “predicting” step. That’s when you should develop Mac’s “Plan B pack” and figure out when to trigger it if necessary.

Another important consideration, which I covered extensively in my problem solving course and Johnson starts looking at ‘way back in “mapping” is how to live with the aftermath of your decision, whether it’s a resounding success or a disastrous failure. Either way, the Universe is changed forever by your decision, and you and everyone else will have to live in it.

So, your ultimate goal should be deciding how to make the Universe a better place in which to live!

Why Diversity Rules

Diverse friends
A diverse group of people with different ages and nationalities having fun together. Rawpixel/Shutterstock

23 January 2019 – Last week two concepts reared their ugly heads that I’ve been banging on about for years. They’re closely intertwined, so it’s worthwhile to spend a little blog space discussing why they fit so tightly together.

Diversity is Good

The first idea is that diversity is good. It’s good in almost every human pursuit. I’m particularly sensitive to this, being someone who grew up with the idea that rugged individualism was the highest ideal.

Diversity, of course, is incompatible with individualism. Individualism is the cult of the one. “One” cannot logically be diverse. Diversity is a property of groups, and groups by definition consist of more than one.

Okay, set theory admits of groups with one or even no members, but those groups have a diversity “score” (Gini–Simpson index) of zero. To have any diversity at all, your group has to have at absolute minimum two members. The more the merrier (or diversitier).

The idea that diversity is good came up in a couple of contexts over the past week.

First, I’m reading a book entitled Farsighted: How We Make the Decisions That Matter the Most by Steven Johnson, which I plan eventually to review in this blog. Part of the advice Johnson offers is that groups make better decisions when their membership is diverse. How they are diverse is less important than the extent to which they are diverse. In other words, this is a case where quantity is more important than quality.

Second, I divided my physics-lab students into groups to perform their first experiment. We break students into groups to prepare them for working in teams after graduation. Unlike when I was a student fifty years ago, activity in scientific research and technology development is always done in teams.

When I was a student, research was (supposedly) done by individuals working largely in isolation. I believe it was Willard Gibbs (I have no reliable reference for this quote) who said: “An experimental physicist must be a professional scientist and an amateur everything else.”

By this he meant that building a successful physics experiment requires the experimenter to apply so many diverse skills that it is impossible to have professional mastery of all of them. He (or she) must have an amateur’s ability pick up novel skills in order to reach the next goal in their research. They must be ready to work outside their normal comfort zone.

That asked a lot from an experimental researcher! Individuals who could do that were few and far between.

Today, the fast pace of technological development has reduced that pool of qualified individuals essentially to zero. It certainly is too small to maintain the pace society expects of the engineering and scientific communities.

Tolkien’s “unimaginable hand and mind of Feanor” puttering around alone in his personal workshop crafting magical things is unimaginable today. Marlowe’s Dr. Faustus character, who had mastered all earthly knowledge, is now laughable. No one person is capable of making a major contribution to today’s technology on their own.

The solution is to perform the work of technological research and development in teams with diverse skill sets.

In the sciences, theoreticians with strong mathematical backgrounds partner with engineers capable of designing machines to test the theories, and technicians with the skills needed to fabricate the machines and make them work.

Chaotic Universe

The second idea I want to deal with in this essay is that we live in a chaotic Universe.

Chaos is a property of complex systems. These are systems consisting of many interacting moving parts that show predictable behavior on short time scales, but eventually foil the most diligent attempts at long-term prognostication.

A pendulum, by contrast, is a simple system consisting of, basically, three moving parts: a massive weight, or “pendulum bob,” that hangs by a rod or string (the arm) from a fixed support. Simple systems usually do not exhibit chaotic behavior.

The solar system, consisting of a huge, massive star (the Sun), eight major planets and a host of minor planets, is decidedly not a simple system. Its behavior is borderline chaotic. I say “borderline” because the solar system seems well behaved on short time scales (e.g., millennia), but when viewed on time scales of millions of years does all sorts of unpredictable things.

For example, approximately four and a half billion years ago (a few tens of millions of years after the system’s initial formation) a Mars-sized planet collided with Earth, spalling off a mass of material that coalesced to form the Moon, then ricochetted out of the solar system. That’s the sort of unpredictable event that happens in a chaotic system if you wait long enough.

The U.S. economy, consisting of millions of interacting individuals and companies, is wildly chaotic, which is why no investment strategy has ever been found to work reliably over a long time.

Putting It Together

The way these two ideas (diversity is good, and we live in a chaotic Universe) work together is that collaborating in diverse groups is the only way to successfully navigate life in a chaotic Universe.

An individual human being is so powerless that attempting anything but the smallest task is beyond his or her capacity. The only way to do anything of significance is to collaborate with others in a diverse team.

In the late 1980s my wife and I decided to build a house. To begin with, we had to decide where to build the house. That required weeks of collaboration (by our little team of two) to combine our experiences of different communities in the area where we were living, develop scenarios of what life might be like living in each community, and finally agree on which we might like the best. Then we had to find an architect to work with our growing team to design the building. Then we had to negotiate with banks for construction loans, bridge loans, and ultimate mortgage financing. Our architect recommended adding a prime contractor who had connections with carpenters, plumbers, electricians and so forth to actually complete the work. The better part of a year later, we had our dream house.

There’s no way I could have managed even that little project – building one house – entirely on my own!

In 2015, I ran across the opportunity to produce a short film for a film festival. I knew how to write a script, run a video camera, sew a costume, act a part, do the editing, and so forth. In short, I had all the skills needed to make that 30-minute film.

Did that mean I could make it all by my onesies? Nope! By the time the thing was completed, the list of cast and crew counted over a dozen people, each with their own job in the production.

By now, I think I’ve made my point. The take-home lesson of this essay is that if you want to accomplish anything in this chaotic Universe, start by assembling a diverse team, and the more diverse, the better!

Nationalism and Diversity

Flags of many countries
Nationalism can promote diversity – or not! Brillenstimmer/shutterstock

16 January 2019 – The poster child for rampant nationalism is Hitler’s National Socialist German Workers’ Party, commonly called the Nazi Party. I say “is” rather than “was” because, while resoundingly defeated by Allies of WW2 in 1945, the Nazi Party still has widespread appeal in Germany, and throughout the world.

These folks give nationalism a bad name, leading to the Oxford Living Dictionary, giving primacy to the following definition of nationalism: “Identification with one’s own nation and support for its interests, especially to the exclusion or detriment of the interests of other nations.” [Emphasis added.]

The Oxford Dictionary also offers a second definition of nationalism: “Advocacy of or support for the political independence of a particular nation or people.”

This second definition is a lot more benign, and one that I wish were more often used. I certainly prefer it!

Nationalism under the first definition has been used since time immemorial as an excuse to create closed, homogeneous societies. That was probably the biggest flaw of the Nazi state(s). Death camps, ethnic cleansing, slave labor, and most of the other evils of those regimes flowed directly from their attempts to build closed, homogeneous societies.

Under the second definition, however, nationalism can, and should, be used to create a more diverse society.

That’s a good thing, as the example of United States history clearly demonstrates. Most of U.S. success can be traced directly to the country’s ethnic, cultural and racial diversity. The fact that the U.S., with a paltry 5% of the world’s population, now has by far the largest economy; that it dominates the fields of science, technology and the humanities; that its common language (American English) is fast becoming the “lingua franca” of the entire world; and that it effectively leads the world by so many measures is directly attributed to the continual renewal of its population diversity by immigration. In any of these areas, it’s easy to point out major contributions from recent immigrants or other minorities.

This harkens back to a theory of cultural development I worked out in the 1970s. It starts with the observation that all human populations – no matter how large or how small – consist of individuals whose characteristics vary somewhat. When visualized on a multidimensional scatter plot, populations generally consist of a cluster with a dense center and fewer individuals farther out.

Globular cluster image
The Great Hercules Star Cluster.. Albert Barr/Shutterstock

This pattern is similar to the image of a typical globular star cluster in the photo at right. Globular star clusters exhibit this pattern in three dimensions, while human populations exist and can be mapped on a great many dimensions representing different characteristics. Everything from physical characteristics like height, weight and skin color, to non-physical characteristics like ethnicity and political ideology – essentially anything that can be measured – can be plotted as a separate dimension.

The dense center of the pattern consists of individuals whose characteristics don’t stray too far from the norm. Everyone, of course, is a little off average. For example, the average white American female is five-feet, four-inches tall. Nearly everyone in that population, however, is a little taller or shorter than exactly average. Very few are considerably taller or shorter, with more individuals closer to the average than farther out.

The population’s diversity shows up as a widening of the pattern. That is, diversity is a measure of how often individuals appear farther out from the center.

Darwin’s theory of natural selection posits that where the population center is depends on where is most appropriate for it to be depending on conditions. What is average height, for example, depends on a complex interplay of conditions, including nutrition, attractiveness to the opposite sex, and so forth.

Observing that conditions change with time, one expects the ideal center of the population should move about in the multidimensional characteristics space. Better childhood nutrition, for example, should push the population toward increased tallness. And, it does!

One hopes that these changes happen slowly with time, giving the population a chance to follow in response. If the changes happen too fast, however, the population is unable to respond fast enough and it goes extinct. So, wooly mammoths were unable to respond fast enough to a combination of environmental changes and increased predation by humans emigrating into North America after the last Ice Age, so they died out. No more wooly mammoths!

Assuming whatever changes occur happen slowly enough, those individuals in the part of the distribution better adapted to the new conditions do better than those on the opposite side. So, the whole population shifts with time toward characteristics that are better adapted.

Where diversity comes into this dynamic is by providing more individuals in the better-adapted part of the distribution. The faster conditions change, the more individuals you need at the edges of the population to help with the response. For example, if the climate gets warmer, it’s folks who like to wear skimpy outfits who thrive. Folks who insist on covering themselves up in heavy clothing, don’t do so well. That was amply demonstrated when Englishmen tried to wear their heavy Elizabethan outfits in the warmer North American weather conditions. Styles changed practically overnight!

Closed, homogeneous societies of the type the Nazis tried to create have low diversity. They try to suppress folks who differ from the norm. When conditions change, such societies have less of the diversity needed to respond, so they wither and die.

That’s why cultures need diversity, and the more diversity, the better.

We live in a chaotic universe. The most salient characteristic of chaotic systems is constant change. Without diversity, we can’t respond to that change.

That’s why when technological change sped up in the early Twentieth Century, it was the bohemians of the twenties developing into the beatniks of the fifties and the hippies of the sixties that defined the cultures of the seventies and beyond.

Jerry Garcia stamp image
spatuletail/shutterstock

Long live Ben and Jerry’s Cherry Garcia Ice Cream!

Seasons Greetings from C.G. Masi

Winterball image
Winterball — Acrylic on gesso board — 23″ x 20″

Winterball is a fun little exercise that first appeared in my Spherical Aberrations exhibit. It has no meaning beyond being an interesting surrealist scene. The red ball dominating the sky is often thought of as a Sun image, but really is just a red ball improbably hanging in the sky. The line of trees on the horizon is actually the result of a technical error, but it worked so well with the painting that I left it in. Similarly for the tiny “prominences” visible at the edge of the red-ball image.

Babies and Bath Water

A baby in bath water
Don’t throw the baby out with the bathwater. Switlana Symonenko/Shutterstock.com

31 October 2018 – An old catchphrase derived from Medieval German is “Don’t throw the baby out with the bathwater.” It expresses an important principle in systems engineering.

Systems engineering focuses on how to design, build, and manage complex systems. A system can consist of almost anything made up of multiple parts or elements. For example, an automobile internal combustion engine is a system consisting of pistons, valves, a crankshaft, etc. Complex systems, such as that internal combustion engine, are typically broken up into sub-systems, such as the ignition system, the fuel system, and so forth.

Obviously, the systems concept can be applied to almost everything, from microorganisms to the World economy. As another example, medical professionals divide the human body into eleven organ systems, which would each be sub-systems within the body, which is considered as a complex system, itself.

Most systems-engineering principles transfer seamlessly from one kind of system to another.

Perhaps the most best known example of a systems-engineering principle was popularized by Robin Williams in his Mork and Mindy TV series. The Used-Car rule, as Williams’ Mork character put it, quite simply states:

“If it works, don’t fix it!”

If you’re getting the idea that systems engineering principles are typically couched in phrases that sound pretty colloquial, you’re right. People have been dealing with systems for as long as there have been people, so most of what they discovered about how to deal with systems long ago became “common sense.”

Systems engineering coalesced into an interdisciplinary engineering field around the middle of the twentieth century. Simon Ramo is sometimes credited as the founder of modern systems engineering, although many engineers and engineering managers contributed to its development and formalization.

The Baby/Bathwater rule means (if there’s anybody out there still unsure of the concept) that when attempting to modify something big (such as, say, the NAFTA treaty), make sure you retain those elements you wish to keep while in the process of modifying those elements you want to change.

The idea is that most systems that are already in place more or less already work, indicating that there are more elements that are right than are wrong. Thus, it’ll be easier, simpler, and less complicated to fix what’s wrong than to violate another systems principle:

“Don’t reinvent the wheel.”

Sometimes, on the other hand, something is such an unholy mess that trying to pick out those elements that need to change from the parts you don’t wish to change is so difficult that it’s not worth the effort. At that point, you’re better off scrapping the whole thing (throwing the baby out with the bathwater) and starting over from scratch.

Several months ago, I noticed that a seam in the convertible top on my sports car had begun to split. I quickly figured out that the big brush roller at my neighborhood automated car wash was over stressing the more-than-a-decade-old fabric. Naturally, I stopped using that car wash, and started looking around for a hand-detailing shop that would be more gentle.

But, that still left me with a convertible top that had started to split. So, I started looking at my options for fixing the problem.

Considering the car’s advanced age, and that a number of little things were starting to fail, I first considered trading the whole car in for a newer model. That, of course, would violate the rule about not throwing the baby out with the bath water. I’d be discarding the whole car just because of a small flaw, which might be repaired.

Of course, I’d also be getting rid of a whole raft of potentially impending problems. Then, again, I might be taking on a pile of problems that I knew nothing about.

It turned out, however, that the best car-replacement option was unacceptable, so I started looking into replacing just the convertible top. That, too, turned out to be infeasible. Finally, I found an automotive upholstery specialist who described a patching scheme that would solve the immediate problem and likely last through the remaining life of the car. So, that’s what I did.

I’ve put you through listening to this whole story to illustrate the thought process behind applying the “don’t throw the baby out with the bathwater” rule.

Unfortunately, our current President, Donald Trump, seems to have never learned anything about systems engineering, or about babies and bathwater. He’s apparently enthralled with the idea that he can bully U.S. trading partners into giving him concessions when he negotiates with them one-on-one. That’s the gist of his love of bilateral trade agreements.

Apparently, he feels that if he gets into a multilateral trade negotiation, his go-to strategy of browbeating partners into giving in to him might not work. Multiple negotiating partners might get together and provide a united front against him.

In fact, that’s a reasonable assumption. He’s a sufficiently weak deal maker on his own that he’d have trouble standing up to a combination of, say, Mexico’s Nieto and Canada’s Trudeau banded together against him.

With that background, it’s not hard to understand why POTUS is looking at all U.S. treaties, which are mostly multilateral, and looking for any niddly thing wrong with them to use as an excuse to scrap the whole arrangement and start over. Obvious examples being the NAFTA treaty and the Iran Nuclear Accord.

Both of these treaties have been in place for some time, and have generally achieved the goals they were put in place to achieve. Howsoever, they’re not perfect, so POTUS is in the position of trying to “fix” them.

Since both these treaties are multilateral deals, to make even minor adjustments POTUS would have to enter multilateral negotiations with partners (such as Germany’s quantum-physicist-turned-politician, Angela Merkel) who would be unlikely to cow-tow to his bullying style. Robbed of his signature strategy, he’d rather scrap the whole thing and start all over, taking on partners one at a time in bilateral negotiations. So, that’s what he’s trying to do.

A more effective strategy would be to forget everything his ghostwriter put into his self-congratulatory “How-To” book The Art of the Deal, enumerate a list of what’s actually wrong with these documents, and tap into the cadre of veteran treaty negotiators that used to be available in the U.S. State Department to assemble a team of career diplomats capable of fixing what’s wrong without throwing the babies out with the bathwater.

But, that would violate his narcissistic world view. He’d have to admit that it wasn’t all about him, and acknowledge one of the first principles of project management (another discipline that he should have vast knowledge of, but apparently doesn’t):

Begin by making sure the needs of all stakeholders are built into any project plan.”

Social Media and The Front Page

Walter Burns
Promotional photograph of Osgood Perkins as Walter Burns in the 1928 Broadway production of The Front Page

12 September 2018 – The Front Page was an hilarious one-set stage play supposedly taking place over a single night in the dingy press room of Chicago’s Criminal Courts Building overlooking the gallows behind the Cook County Jail. I’m not going to synopsize the plot because the Wikipedia entry cited above does such an excellent job it’s better for you to follow the link and read it yourself.

First performed in 1928, the play has been revived several times and suffered countless adaptations to other media. It’s notable for the fact that the main character, Hildy Johnson, originally written as a male part, is even more interesting as a female. That says something important, but I don’t know what.

By the way, I insist that the very best adaptation is Howard Hawks’ 1940 tour de force film entitled His Girl Friday starring Rosalind Russell as Hildy Johnson, and Cary Grant as the other main character Walter Burns. Burns is Johnson’s boss and ex-husband who uses various subterfuges to prevent Hildy from quitting her job and marrying an insurance salesman.

That’s not what I want to talk about today, though. What’s important for this blog posting is part of the play’s backstory. It’s important because it can help provide context for the entire social media industry, which is becoming so important for American society right now.

In that backstory, a critical supporting character is one Earl Williams, who’s a mousey little man convicted of murdering a policeman and sentenced to be executed the following morning right outside the press-room window. During the course of the play, it comes to light that Williams, confused by listening to a soapbox demagogue speaking in a public park, accidentally shot the policeman and was subsequently railroaded in court by a corrupt sheriff who wanted to use his execution to help get out the black(!?) vote for his re-election campaign.

What publicly executing a confused communist sympathizer has to do with motivating black voters I still fail to understand, but it makes as much sense as anything else the sheriff says or does.

This plot has so many twists and turns paralleling issues still resonating today that it’s rediculous. That’s a large part of the play’s fun!

Anyway, what I want you to focus on right now is the subtle point that Williams was confused by listening to a soapbox demagogue.

Soapbox demagogues were a fixture in pre-Internet political discourse. The U.S. Constitution’s First Amendment explicitly gives private citizens the right to peaceably assemble in public places. For example, during the late 1960s a typical summer Sunday afternoon anywhere in any public park in North America or Europe would see a gathering of anywhere from 10 to 10,000 hippies for an impromptu “Love In,” or “Be In,” or “Happening.” With no structure or set agenda folks would gather to do whatever seemed like a good idea at the time. My surrealist novelette Lilith describes a gathering of angels, said to be “the hippies of the supernatural world,” that was patterned after a typical Hippie Love In.

Similarly, a soapbox demagogue had the right to commandeer a picnic table, bandstand, or discarded soapbox to place himself (at the time they were overwhelmingly male) above the crowd of passersby that he hoped would listen to his discourse on whatever he wanted to talk about.

In the case of Earl Williams’ demagogue, the speech was about “production for use.” The feeble-minded Williams applied that idea to the policeman’s service weapon, with predictable results.

Fast forward to the twenty-first century.

I haven’t been hanging around local parks on Sunday afternoons for a long time, so I don’t know if soapbox demagogues are still out there. I doubt that they are because it’s easier and cheaper to log onto a social-media platform, such as Facebook, to shoot your mouth off before a much larger international audience.

I have browsed social media, however, and see the same sort of drivel that used to spew out of the mouths of soapbox demagogues back in the day.

The point I’m trying to make is that there’s really nothing novel about social media. Being a platform for anyone to say anything to anyone is the same as last-century soapboxes being available for anyone who thinks they have something to say. It’s a prominent right guaranteed in the Bill of Rights. In fact, it’s important enough to be guaranteed in the very first of th Bill’s amendments to the U.S. Constitution.

What is not included, however, is a proscription against anyone ignoring the HECK out of soapbox demagogues! They have the right to talk, but we have the right to not listen.

Back in the day, almost everybody passed by soapbox demagogues without a second glance. We all knew they climbed their soapboxes because it was the only venue they had to voice their opinions.

Preachers had pulpits in front of congregations, so you knew they had something to say that people wanted to hear. News reporters had newspapers people bought because they contained news stories that people wanted to read. Scholars had academic journals that other scholars subscribed to because they printed results of important research. Fiction writers had published novels folks read because they found them entertaining.

The list goes on.

Soapbox demagogues, however, had to stand on an impromptu platform because they didn’t have anything to say worth hearing. The only ones who stopped to listen were those, like the unemployed Earl Williams, who had nothing better to do.

The idea of pretending that social media is any more of a legitimate venue for ideas is just goofy.

Social media are not legitimate media for the exchange of ideas simply because anybody is able to say anything on them, just like a soapbox in a park. Like a soapbox in a park, most of what is said on social media isn’t worth hearing. It’s there because the barrier to entry is essentially nil. That’s why so many purveyors of extremist and divisive rhetoric gravitate to social media platforms. Legitimate media won’t carry them.

Legitimate media organizations have barriers to the entry of lousy ideas. For example, I subscribe to The Economist because of their former Editor in Chief, John Micklethwait, who impressed me as an excellent arbiter of ideas (despite having a weird last name). I was very pleased when he transferred over to Bloomberg News, which I consider the only televised outlet for globally significant news. The Wall Street Journals business focus forces Editor-in-Chief Matt Murray into a “just the facts, ma’am” stance because every newsworthy event creates both winners and losers in the business community, so content bias is a non-starter.

The common thread among these legitimate-media sources is existance of an organizational structure focused on maintaining content quality. There are knowlegeable gatekeepers (called “editors“) charged with keeping out bad ideas.

So, when Donald Trump, for example, shows a preference for social media (in his case, Twitter) and an abhorrence of traditional news outlets, he’s telling us his ideas aren’t worth listening to. Legitimate media outlets disparage his views, so he’s forced to use the twenty-first century equivalent of a public-park soapbox: social media.

On social media, he can say anything to anybody because there’s nobody to tell him, “That’s a stupid thing to say. Don’t say it!”

Who’s NOT a Creative?

 

Compensting sales
Close-up Of A Business Woman Giving Cheque To Her Colleague At Workplace In Office. Andrey Popov/Shutterstock

25 July 2018 – Last week I made a big deal about the things that motivate creative people, such as magazine editors, and how the most effective rewards were non-monetary. I also said that monetary rewards, such as commissions based on sales results, were exactly the right rewards to use for salespeople. That would imply that salespeople were somehow different from others, and maybe even not creative.

That is not the impression I want to leave you with. I’m devoting this blog posting to setting that record straight.

My remarks last week were based on Maslow‘s and Herzberg‘s work on motivation of employees. I suggested that these theories were valid in other spheres of human endeavor. Let’s be clear about this: yes, Maslow’s and Herzberg’s theories are valid and useful in general, whenever you want to think about motivating normal, healthy human beings. It’s incidental that those researchers were focused on employer/employee relations as an impetus to their work. If they’d been focused on anything else, their conclusions would probably have been pretty much the same.

That said, there are a whole class of people for whom monetary compensation is the holy grail of motivators. They are generally very high functioning individuals who are in no way pathological. On the surface, however, their preferred rewards appear to be monetary.

Traditionally, observers who don’t share this reward system have indicted these individuals as “greedy.”

I, however, dispute that conclusion. Let me explain why.

When pointing out the rewards that can be called “motivators for editors,” I wrote:

“We did that by pointing out that they belonged to the staff of a highly esteemed publication. We talked about how their writings helped their readers excel at their jobs. We entered their articles in professional competitions with awards for things like ‘Best Technical Article.’ Above all, we talked up the fact that ours was ‘the premier publication in the market.'”

Notice that these rewards, though non-monetary. were more or less measurable. They could be (and indeed for the individuals they motivated) seen as scorecards. The individuals involved had a very clear idea of value attached to such rewards. A Nobel Prize in Physics is of greater value than, say, a similar award given by, say, Harvard University.

For example, in 1987 I was awarded the “Cahners Editorial Medal of Excellence, Best How-To Article.” That wasn’t half bad. The competition was articles written for a few dozen magazines that were part of the Cahners Publishing Company, which at the time was a big deal in the business-to-business magazine field.

What I considered to be of higher value, however, was the “First Place Award For Editorial Excellence for a Technical Article in a Magazine with Over 80,000 Circulation” I got in 1997 from the American Society of Business Press Editors, where I was competing with a much wider pool of journalists.

Economists have a way of attempting to quantify such non-monetary awards called utility. They arrive at values by presenting various options and asking the question: “Which would you rather have?”

Of course, measures of utility generally vary widely depending on who’s doing the choosing.

For example, an article in the 19 July The Wall Street Journal described a phenomenon the author seemed to think was surprising: Saudi-Arabian women drivers (new drivers all) showed a preference for muscle cars over more pedestrian models. The author, Margherita Stancati, related an incident where a Porche salesperson in Riyadh offered a recently minted woman driver an “easy to drive crossover designed to primarily attract women.” The customer demurred. She wanted something “with an engine that roars.”

So, the utility of anything is not an absolute in any sense. It all depends on answering the question: “Utility to whom?”

Everyone is motivated by rewards in the upper half of the Needs Pyramid. If you’re a salesperson, growth in your annual (or other period) sales revenue is in the green Self Esteem block. It’s well and truly in the “motivator” category, and has nothing to do with the Safety and Security “hygiene factor” where others might put it. Successful salespeople have those hygiene factors well-and-truly covered. They’re looking for a reward that tells them they’ve hit a home run. That is likely having a bigger annual bonus than the next guy.

The most obvious money-driven motivators accrue to the folks in the CEO ranks. Jeff Bezos, Elon Musk, and Warren Buffett would have a hard time measuring their success (i.e., hitting the Pavlovian lever to get Self Actualization rewards) without looking at their monetary compensation!