The Chief Advantage Of Democracy Is Peaceful Transition Of Power

I really do not understand why people think that democracy is so great. Its chief advantage is that it provides for peaceful transitions of power. I continue to believe that markets, imperfect as they often are, produce better outcomes than voting.

I come to appreciate this view more and more. Democracy, even Republic, is not necessarily so good for decision-making. There’s a lesson here for managing projects and organizations as well.

via My Election Take | askblog.

Do Not Resign — Make Them Fire You

Make them fire you. If you resign under pressure you have basically no legal standing. Make. Them. Fire. You. If they pressure you to resign, you should write a letter, declining to resign, declining to take any responsibility for your private, off-duty, speech and/or actions. Specifically point out that you are exercising your personal discretion to engage in political and social commentary regarding current events, that you are not willing to be subjected to a hostile work environment for your unorthodox political views, and that you are not willing to explain or defend or justify those personal political views.

Always make them do their own dirty work.

via Vox Popoli: Mailvox: employment advice.

All Project Failures Are Management Failures

When you even contemplate bringing an old legacy system into a large-scale web project, you should do load testing on that system as part of the feasibility process before you ever write a line of production code, because if those old servers can’t handle the load, your whole project is dead in the water if you are forced to rely on them. There are no easy fixes for the fact that a 30 year old mainframe can not handle thousands of simultaneous queries. And upgrading all the back-end systems is a bigger job than the web site itself. Some of those systems are still there because attempts to upgrade them failed in the past. Too much legacy software, too many other co-reliant systems, etc. So if they aren’t going to handle the job, you need a completely different design for your public portal.

A lot of focus has been on the front-end code, because that’s the code that we can inspect, and it’s the code that lots of amateur web programmers are familiar with, so everyone’s got an opinion. And sure, it’s horribly written in many places. But in systems like this the problems that keep you up at night are almost always in the back-end integration.

The root problem was horrific management. The end result is a system built incorrectly and shipped without doing the kind of testing that sound engineering practices call for. These aren’t ‘mistakes’, they are the result of gross negligence, ignorance, and the violation of engineering best practices at just about every step of the way.

The title is adapted from Peter Drucker, “All business failures are management failures.” The quoted piece is from a comment that I can’t link to directly, so go to Arnold Kling on the problems with the health insurance exchanges and look for Dan Hanson on October 25, 2013 at 2:13pm.

Healthcare.gov: 47 Different Contractors Built The Site?

I don’t hold it against the contractors that they had prior government experience. I don’t hold it against them that they lobby or contribute to campaigns.

To me, the scandal is that there are 47 different organizations involved in building the site. I cannot imagine that any sane project executive would want it that way. I am just guessing, but it seems more likely to me that this many contractors were imposed on the project executive because there was a requirement to “spread the work out” to keep all these companies in the politicians’ pockets.

In any case, if you are trying to fix something that was assembled by 47 different organizations….good luck with that.

Remember this story any time you think government actors (at any level!) are somehow immune to bad management practices and skewed incentives. They are no smarter, and in aggregate often dumber, than non-government actors. Via Pinpoint the Scandal | askblog.

How To Lie About An Elephant In The Room

… I learned a lesson that has no doubt been absorbed by many political leaders in recent years. If you’re going to lie about the fact that there is an elephant in the room, do it while you’re standing right next to the thing. If you try to hide the critter or distract people’s gaze from it, they will immediately know that you are lying. But if you come right up to it and give it a pat on the shoulder, they’ll start to think maybe the elephant is lying.

Matthew Stewart, “The Management Myth”

Loyalty Programs, Soft Monopolies, and Taxpayers

Most analysts had thought that American’s frequent flier program became moot as soon as Delta and the other airlines copied it. But in fact, the authors argue, the effect of such programs is that customers are less likely to switch from their preferred airline to another in response to a price cut. Thus, thanks to American’s AAdvantage program, Delta has less incentive to lower its fares; thanks to Delta’s SkyMilers, American is less likely to lower its fares. And, still more joy, both airlines can even start to raise fares, knowing that customers are less likely to leave in the event of a price increase. In essence, by atomizing individual consumers, loyalty programs create soft, micromonopolies on the market to individuals. The result for the airlines is “greater price stability,” the authors say, by which they mean higher faires. They happily chalk it up as a “win-win” for American and Delta — never mind the fact that, according to their own analysis, consumers collectively end up paying more in exchange for having expressed their individual loyalties.

Of course, as every business traveler knows, the airpline programs work in no small measure because businesses pay the fares while travelers collect the miles. “So are bosses the losers?” the game theorists ask. “Not necessarily. Frequent-flyer miles are a tax-free way for companies to comepensate employees who undertake a lot of business travel.” Thus, according to experts, in the profoundly unlikely event that an extra tens of thousands of dollars in business class fares is your company’s way of gifting you a once-a-year trip to Hawaii, then it is the taxpayer who foots the bill! So it’s a win-win all around — except for those who pay taxes.

— Matthew Stewart, “The Management Myth,” p 232-233

Union Fights Hostess; Union Wins; Workers To Be Laid Off

[Hostess Brands], which previously survived one multi-year Chapter 11 bankruptcy process, when it operated as Interstate Bakeries, has just made a splash at the NY Southern Bankruptcy court, for the last time, with a liquidation filing. The reason: insurmountable (and unfundable) difference in the firm’s collective bargaining agreements and pension obligations, which resulted in a crippling strike that basically shut down the company.

In other words, the labor unions representing 18,000 workers fought the company, and the unions won… A very pyrrhic victory. Sadly, they are all now out of a job as the unionized victory just happened to lead to the terminal winddown of their employer.

Finally, those 18,500 new initial jobless claims next week? Sandy’s fault.

Love that final line. And guess who’s going to pick up the tab on their pensions? Mr and Mrs Taxpayer, via the Pension Benefit Guaranty Corp. See Twinkies, Ding Dongs Maker Hostess Liquidates Following Failure To Resolve Labor Union Animosity | ZeroHedge.

Criticism Need Not Be Constructive

[T]here’s a mantra that criticism must be constructive – that is, don’t criticize someone if you cannot also tell them what to do about the problem.

I think that is a harmful norm, for two reasons. First, once a feature of your product is identified as weak, people other than the identifying party may come up with a solution. … [E]ven if no one can think of a solution, having a weakness pointed out leads to a more realistic appreciation of your product, which by itself can be very helpful. When several people in your movie production company report vague feelings that a specific screenplay would not make a good basis for a movie if the aim is to make money, you may not want to produce it. If tests show that the brakes on a new car are not working properly, you may not want to start selling it. These are cases where nobody points out how to solve the problem, yet knowing that the problem exists is very important.

via The Church of Rationality: Criticism Need Not Be Constructive.

What are telltale signs that you’re working at a “sinking ship” company?

Small-company edition:

When pressured on the business by employees, CEO always starts with, "I need you to stay focused on…"

You have more than one MBA on the team.

You have a Chief Strategy Officer.

Your CTO just came out of a Phd program.

Your CEO sells instead of listens.

You have a launch party, and no customers attend.

Customers hate the product and vision, so the sales guy is fired.

You are not told the terms of the last funding round (5x liquidation preference?)

You never hear how much cash you have in the bank or see board meeting notes.

You complain about how the customers "just don’t get it" and aren’t "visionary."

Your CEO says revenue is coming in in two weeks, just after he gets a meeting with the buyer, negotiates price, gets it approved, agrees on terms, writes up up contracts, negotiates them, signs them, and invoices the customer on net 30 terms.

You add features because board members want them.

Your CEO calls himself a "visionary" in his bio.

The CEO keeps everything secret because, "that is how Apple does it."

The CEO approves all of the design decisions because, "that is how Apple does it."

You are selling a platform.

Co-founder agrees to bring in experienced execs but thinks they will report to him.

You are selling to schools, hospitals, or non-profits.

You are commercializing a technology.

Your value proposition is that you help workers break down organizational barriers and work cross-functionally.

Your business model assume you will become one of the 7 websites that the average user visits every day.

Your site is going to be ad-supported, and you have 1500 users.

CEO avoids eye contact.

It gets really quiet.

You get free lunch but have no customers.

Your free lunch is taken away.

You get asked, "how much do you really need to live on?"

You get a pay cut. Your co-worker disappears.

Your CEO still doesn’t make eye contact.

You get laid off and become a creditor to the company because they didn’t reimburse your last 5 expense reports.

The company declines to buy your unvested shares back.

The liquidation yields 5 Aeron chairs and an espresso machine, and Ashton Kutcher’s stock is senior to yours.

via What are telltale signs that you’re working at a “sinking ship” company? – Quora.

Open Office Plans: Bad For Privacy and Meaningful Conversation

The original rationale for the open-plan office, aside from saving space and money, was to foster communication among workers, the better to coax them to collaborate and innovate. But it turned out that too much communication sometimes had the opposite effect: a loss of privacy, plus the urgent desire to throttle one’s neighbor.

“Many studies show that people have shorter and more superficial conversations in open offices because they’re self-conscious about being overheard,” said Anne-Laure Fayard, a professor of management at the Polytechnic Institute of New York University who has studied open offices. “Everyone is still experimenting with ways to balance the need for collaboration and the need for privacy.”

Take Mr. Udeshi’s office, at the N.Y.U.-Poly business incubator, a SoHo loft with dozens of start-up companies housed in low cubicles. The entrepreneurs there say they sometimes get useful ideas from overheard conversations but also find themselves retreating to a bathroom or a broom closet for private chats. When they have to discuss a delicate matter with someone sitting next to them, they often use e-mail or instant messaging.

“You talk to more people in an open office, but I think you have fewer meaningful conversations,” said Jonathan McClelland, an energy consultant working in the loft. “You end up getting interrupted a lot by people’s random thoughts.”

via From Cubicles, Cry for Quiet Pierces Office Buzz – NYTimes.com.