Hard Facts, Dangerous Half-Truths and Total Nonsense: You’ve got to love Pfeffer and Sutton

Being a Stanford graduate, I was already partial to the authors, two Stanford professors, before even starting to read Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management. With a title like that? and that cover design? (oh my god, those people at HBS Press have got themselves a mean publishing machine).

Wait. It only gets better. If nothing else, read this book for a benchmark of academic freedom. Few among the Stanford Business School faculty enjoy more of an icon-like status than lecturer – and entrepreneurial legend – Andy Grove. So, in opening the book with an argument about the lack of evidence that stock options enhance organizational performance, they deliver a quick jab to Grove:

“When Andy Grove, former Intel chairman and CEO, got prostate cancer, he assiduously tracked down all the data he could comparing treatment options and their risks and benefits, gathering the best available evidence to guide his medical decisions. That’s what we would expect from a well-trained engineer and scientist. Grove, however, like many of his Silicon Valley friends, continues to insist on the benefits of [stock] options and doesn’t cite evidence for his views – even though with other business decisions, Grove sticks closely to the facts.”

Similar barbs are reserved, later in the book, for Robert Burgelman, whose claim that “strategy is destiny” they quickly proceed to undermine – with a close reading of the Intel story, which Burgelman and Grove have co-taught to generations of students: the key strategic decision in Intel’s story was, apparently, an outsourcing decision made by IBM, which Intel was smart to capitalize on, but which Intel did not influence or even foresee as the lucky break that would build the semiconductor giant. If you ask me, that’s pretty much like pulling the rug from under Burgelman’s feet. Yet, their whole critique seems to be in good faith, extremely civilized, and driven by the authors’ genuine truth-seeking efforts rather than by personal animosity. And I just think that’s very cool.

If you like challenging conventional wisdom, this is a book full of delights and an arsenal of tools for attacking nonsense in your corporate environment whenever you see it:

“Take the case of a senior exceutive from Florida Power and Light, who told us, while attending a Stanfrod executive program, that his compensation was based on the profitability of the utility. The utility’s profitability, since in the short run most of its costs and rates were fixed, depended mostly on the amount of electricity sold, and the amount of electricity sold depended mostly on the temperature. The hotter the summer in Florida, the more power was sold, and the more profitable was the utility. That summer was a particularly hot one in Florida, so the executive got a big boost in pay during the month that he spent at the Stanford Executive Program in california. This executive noted that this incentive system made no sense — unless you believed he could control the weather in Florida”.

The authors handle some big hairy questions (Is work fundamentally different from the rest of life, and should it be? Do the best organizations have the best people? Are great leaders in control of their companies?) In most cases, they don’t have the answers, but they show you under what conditions an answer might be fit for a given situation, and how devilishly difficult it is to get to the answer if you don’t specify those conditions. So, suppose your company spends a lot of time and effort developing and administering a performance management system that ranks people’s performance on a curve or forced ranking, encouraging you as a manager to “use the full curve” in grading your employees, and rewards better performers with monetary bonuses (ever been in one of those companies? :-)). After reviewing decades of experimental research and field studies, Pfeffer and Sutton conclude: “Individual incentives and highly differentiated reward and recognition distributions make more sense when performance can be objectively assessed and when performance is mostly the result of individual effort rather than the product of interdependent activity”. Examples of such jobs are jockeying, cutting trees, and installing windshields. “Similarly, the evidence suggests that more dispersed financial rewards increase the performance (particularly of the highest performers) when tasks entail little or no interdependence and outcomes are clear.” Examples: driving trucks and picking oranges. When was the last time you had a job like that? You probably experienced a fair bit of interdependence even while editing your high school yearbook, didn’t you? “Yet when work settings require even modest interdependence and cooperation, as most do, dispersed rewards have consistently negative consequences on organizations… The negative effect of pay disparity was especially pronounced for high-technology firms, because those firms had the greatest need for collaboration and teamwork.”

Pfeffer and Sutton claim as their practical inspiration Dr. David Sackett’s evidence-based medicine movement: hell, if it works for medicine, let’s try to see if it works for business, too. In the bigger scheme of things (on strategy, organizational change, and leadership), their conclusions remind me of Eric Beinhocker’s The Origin of Wealth, a more theoretical work about contemporary economics which nevertheless seems to me to hint at some of the same truths. And at the end of the day, it’s not about truths, which change anyway: it’s about the method of looking at the facts, applying your brains, and leaving behind those beliefs that happen to be unsupported by evidence. If we all could inject some more of this wisdom into our organizations, we’d probably have earned our salary, and our bonus too.

Michael Chabon, The Yiddish Policemen’s Union: genre with feeling

I’m not a fan of all of Michael Chabon’s books: I found The Amazing Adventures of Kavalier & Clay an absolute wonder, but The Mysteries of Pittsburgh overrated and boring. I approached The Yiddish Policemen’s Union with some anticipation (after all, writers are supposed to get better at their craft with time, aren’t they?) and, while not as delightful as Kavalier & Clay, it was quite an enjoyable read. A noir set in a dystopia, after all, is a very good starting point.
What makes it remarkable is, above all, Chabon’s verbal inventiveness in a mock-Chandler tone of voice. Even if overdone at times (really, would anyone else have the guts to christen a secondary character, a four-foot-seven tribal inspector on a motorcycle, with the name of Willie Dick?), this voice draws the reader in and lights up on almost every page an otherwise very moody story about detective Meyer Landsman, a loser in a pseudo-country that is about to disappear.

According to doctors, therapists, and his ex-wife, Landsman drinks to medicate himself, tuning the tubes and crystals of his moods with a crude hammer of hundred-proof plum brandy. But the truth is that Landsman has only two moods: working and dead.

Almost two hundred pages later, Landsman’s boss and ex-wife suspends him for a month after an unauthorized operation has gone very wrong. Here’s what she tells him:

“And of course you’ll get the chance to tell your story. In the meantime, I’m going to keep your shield and your gun in this nice pink plastic Hello Kitty zipper bag that Willy Zilberblat was carrying them around in, okay? And you just try to get yourself all nice and better, right?”

(The Hello Kitty thing is totally out of the blue: I don’t care if it’s product placement, it is utter writerly genius). Finally, a portrait of Landsman’s sister Naomi, whose death in the cockpit of her aircraft a few months before the action takes place turns out not to have been accidental, but to be tied to a vast American conspiracy to blow up the Middle East:

Naomi was a tough kid, so much tougher than Landsman ever needed to be […] She was boyish as a girl and mannish as a woman. When some drunken fool asked if she was a lesbian, she would say, “In everything but sexual preference. ” […] She was not complicated, Landsman’s little sister, and in that respect, she was unique among the women of his acquaintance.

This last example shows how Chabon infuses the genre – notwithstanding the pitfalls of stereotype – with genuine feeling. And that’s what makes The Yiddish Policemen’s Union worth reading.

America’s colossal cultural decline: Dana Gioia’s 2007 Stanford Commencement speech

Most American artists, intellectuals, and academics have lost their ability to converse with the rest of society. We have become wonderfully expert in talking to one another, but we have become almost invisible and inaudible in the general culture.

Last month, Dana Gioia – a cool dude who is a poet, an MBA, and the chairman of the National Endowment for the Arts – delivered quite an interesting speech to address graduating Stanford students (and the parents who largely paid for their undergraduate education), claiming that the decline in artists’ engagement with the world around them is a prime factor in the collective dumbing down of America.

The speech has been criticized for painting the past in rosy-colored hues (what about the McCarthy years?) and not recognizing today’s highlights of popular culture (from the baroque complexity of Lost to Oprah’s tireless efforts to get people to read books). I leave it to you to form your own opinion. In the meantime, it never hurts to go back to the classics, so I leave you with another excerpt from Gioia’s speech, this time quoting the philosopher-emperor Marcus Aurelius:

Marcus Aurelius believed that the course of wisdom consisted of learning to trade easy pleasures for more complex and challenging ones. I worry about a culture that bit by bit trades off the challenging pleasures of art for the easy comforts of entertainment.

The Amex Members Project, or: How Javascript flukes can sabotage good intentions

Today I visited The Members Project, a site set up by the good PR and charity folks at American Express to make this world a better place and do some branding in the process.

It looked a bit strange that a global project riding on Amex’s marketing power would have so few votes for the charities involved: a handful, less than a hundred in total at when I visited the site. (Just last week, a new Samsung phone offered for charity on eBay Italy alone drew 72 bids – and that’s bids, not votes). Then I tried voting myself, and here’s why:

Amex Members Project

Clicking “Continue” or “Cancel”: right, but what if no “Continue” or “Cancel” buttons are shown? I guess something must have been lost in the Javascript.

(Hint: you can still vote by going inside the individual project page. But my guess is that 95% of potential voters, befuddled, gave up).

Hopefully they fix it soon.

Update (July 25): Bug resolved, many more votes left as of today (over 20,000). Children’s Safe Drinking Water in the lead with over 8,000. The winning project will be announced on August 7. If you have an Amex card, go and cast your vote!

Update (August 1): Read up on the controversy on whether Amex failed to disclose a large corporation’s involvement in the drinking water project, Procter & Gamble’s. Where do I stand? Read my thoughts on a charity project funded by Luxottica.

Europe’s young entrepreneurs – a picture of the Continent, courtesy of Business Week

Business Week recently did some legwork to find the hottest entrepreneurs under 25 in Europe. And the winners are… from Ireland, Bulgaria, the Netherlands, the UK and again the Netherlands (although this last case is a bit more complicated – Thomas Mylonas grew up in Greece and hatched his plans for DotKite design brand while working at Fila in Montebelluna, Italy, before setting up shop in Amsterdam).

None of the five winners come from any of the big three sickly Continental economies – Germany, France or Italy; even Tariq Krim, Netvibes’s founder and a star French entrepreneur, is, at 34, way over the age limit for the contest – 25. (We do have a different concept of youth from the Americans – over here, you can be considered a young writer in your 40s and a young politician in your 50s. Or maybe we just have more gerontocracy?) Even if the German locomotive is accelerating and the French are newly confident about their prospects, the Business Week survey is another symptom of the crucial malaise in the three countries – lack of innovation.

The sixteen finalists among which the five winners were chosen show much the same geographic pattern, with the exception of one native Italian, Michele Finotto, founder of Ruby on Rails developer WonSys (he’s the guy with the biggest smile in the BW slideshow).

Michele Finotto

Congratulations to Michele for making the list! (Photo courtesy of Business Week). And for next year… Marco P., Michele A., how about submitting some candidates from First Generation Network?

Long live books: the Open Library project

Forget about book-driven social networking. Forget about book blogs. Forget about bookcrossing. Don’t bother with fads. Stop dressing up your love for books in the flavor-of-the-day sauce.

Build something enduring instead. How about an open catalog and library of all the world’s books?

That’s the vision for Aaron Swartz‘s and Brewster Kahle‘s Open Library project.

I’m with you, guys. No matter how cool video is, at the end of the day, we are human because we have words; the Greeks’ logos stands for “word” and “reason” at the same time (as Carla reminded me today). When words were scratched on wet clay, painted on papyrus, carved in marble, inked on paper, we had the most powerful technology in history: writing. Then there came printing – amazingly, only a few centuries old. And now we have a lot of books: in Swartz’s words, “Books are the place you go when you have something you want to share with the world — our planet’s cultural legacy”.

Without reading and writing, we lose ninety per cent of our words. Without words, we revert to gestures. Without words, we are monkeys. Long live books.

Naked ambition, the FT, and Italian women

Readers of my other blog know that I often comment – mostly with dismay – on the status of women in Italian society. Today, the FT Weekend article by Adrian Michaels gives me a chance to rant here too.

In a nutshell, Michaels argues that the female image portrayed by media and advertising in Italy feeds on, and in turn reinforces, the low status of women in Italian business, politics, and in the professions. And I think he’s right: there are few role models for young girls beyond the veline (skimpily dressed TV dancers, for readers who aren’t familiar with the term), and hardly any visible women CEOs or entrepreneurs beyond those who have inherited their roles because they are the founder’s daughter, sister or widow. Outside these pockets of privilege, there are enormous constraints on the time a woman can devote to pursuing professional achievement if she’s trying to keep a family going (from schools that close in the afternoon to primitive retail and banking hours, as the author himself discovers when trying to buy milk on a Sunday). According to economists Tito Boeri and Daniela del Boca, only 25% of the hours worked by Italian women are paid work; the rest is unpaid, work hours spent outside the labor market, taking care of others for free (including, increasingly, older family members). Among women who work outside the home, only 30% return to work after having a child; for the careers of the others, maternity means game over.

I think we need a rather radical agenda to get out of this vicious circle. First, we need to be more selfish.

Let the house get a bit dirtier. Some scum in the shower never killed anybody. Cleanliness is overrated.

Go to supermarkets that sell ready meals. Yes, they’re pricey, but not as much as our time is worth. Better yet, order online or by phone. Arrange delivery when convenient. Bank online. It is retailers who ought to adapt to our needs, not we to theirs.

Let the baby wallow in a dirty diaper until Dad changes it. Let older children wash themselves, or go to bed dirty. Some exposure to germs is good as it increases resistance to diseases.

Let your husband pay for a nurse for your mother-in-law. If he does not have enough money, tell him to get a second job, or to act as a nurse himself. This may take until Grandma gets a couple of bedsores. Bedsores are a necessary evil in the education of men.

Get extremely organized (you might pick a few ideas from The 4-Hour Workweek). Then, use the time you rediscovered to play the power game. Be bold. Call a meeting with your boss at 8pm to show him your ideas for reorganizing his department, and engage him in a long discussion, so that he misses the first half of that Champions League match. Go out to breakfast with a head hunter. Network with other women. Write about your agenda for change, and become a columnist for your local paper. Bootstrap your reputation. Stand for election to your town council, or some other body where you will have the power to change things.

The point is: no one will hand power over to women. Not if we accept the state of things as they are, or if we merely entertain interesting proposals about quotas in company boards and so on. We have to want it, and we have to build our resumes for it.

Are you ready?