BUSINESS – REVIEWS AND VIEWS OF LIFE

MANAGEMENT

“Radical Candor” about a creative idea can discourage employee creativity. Scott’s counsel on building trust is her magic potion, but potions can kill as well as heal.

Books of Interest
Website: chetyarbrough.blog

Radical Candor (Be a Kick-Ass Boss Without Losing Your Humanity)

Author: Kim Scott

Narrated By: Kim Scott

Kim Scott (Author, former executive at Apple and Google, coach for tech companies like Dropbox and Twitter)

The agricultural revolution dates back to 10,000 BCE, 1760 marks the beginning of the industrial revolution, the 1950s evolves into an age of expertise and work knowledge with computerization, in the 1990s connectivity and automation begins the information age. Today, Kim Scott addresses the 2020s along with the advent of artificial intelligence. Beginning when the industrial revolution takes hold, organization management evolves into a social science. In the industrial age training changes from demonstrating how to make things to managing people’s work in making things. Jumping to the Information Age managers of people become ringmasters for employee’s creativity.

Despite many changes in purpose for organizations a common thread is managerial skill which entails political and personal skills. Managers pursue understanding, influence, ability, and sincerity of purpose to elicit and manage human creativity.

Scott outlines management skills in “Radical Candor”. Her book is a useful tool for aspiring managers. Even reaching back to the agricultural age, there is relevance in Scott’s belief in “Radical Candor”. She defines radical candor as “Caring personally while challenging (organization employees) directly.” By personally caring, Scott explains good managers must gain the trust of people who report to them. My personal experience as a former manager in different careers shows that no manager knows everything about the company or organization they manage. The one thing a good manager must know is how to develop trust with people who report to her or him. Without trust between managers and workers, organizations are likely to fail.

Trust between managers and employees is even more true today because worker’ creativity drives technological invention and utility.

Being vulnerable by understanding you know nothing about people you manage is the starting point of your role as a manager. Scott explains the first thing a new manager must do is personally meet with each direct report to hear what they do for the organization, what they like and dislike about what they do, and what obstacles get in their way that impede accomplishment. The two-fold purpose of these meetings is first to listen, not judge or criticize what is being reported. The second is to build trust.

(I believe A.I. will always be a technological tool, not a controller, of society, contrary to those who believe human existence will be erased by machines. As a technological tool of humanity, the creativity of human minds is at the frontier of management change.)

Scott explains how important it is to let employees know their manager is interested in an employee’s goals and growth in an organization.

A manager must be both physically and emotionally present when building trust with an employee. There is a need for a manager to explain one’s own vulnerability and responsibility in managing others. Scott’s point is that gaining trust of an employee requires more than knowing their birthday. A good manager will ask for feedback about what an employee is doing and what support a manager can offer to improve their performance. A manager should be curious, not furious when things are not going well. It is important that a sense of respect be given for an employee’s effort to get their job done. With development of respect, it becomes possible to use radical candor to constructively criticize or complement an employees’ performance.

Scott notes there are many reasons for an employee’s failure to perform beyond expectations.

Those reasons include incompetence but also the failure of management to have a clear understanding of an employees’ strengths and weaknesses. Through development of trust between manager and employee, a different job may be in order. With reassignment and a performance plan, a manager may be able to tap a human resource that has been wasted. The performance plan is instituted with “Radical Candor” and offers either opportunity or, if performance improvement fails, dismissal.

Every organization has distinctive operational idiosyncrasies that a manager may not precisely understand.

This has always been true. It is even more true in the tech age because project uniqueness and employee creativity is more difficult to measure and manage. Kim Scott has worked with the most iconic tech companies of modern times, e.g. Apple, Google, Twitter. There are a number of anecdotes about famous tech giants and officers of Facebook, Apple, and Google, like Sandberg, Cook, and Page. Kim has also started her own businesses, some of which failed, and others that prospered. Her experience offers credibility to her arguments.

From personal experience as a manager of others, no manager ever knows all there is to know.

As Scott notes, this is not to say that geniuses like Steve Jobs did not know more than his Apple employees, but the iPhone idea came from a group of employees before approaching Jobs with a clunky mock-up of the idea. Jobs had a reputation for being a tough audience for people with creative ideas. This is the reason Kim Scott explains trust must be created between manager and employee so that candor about needs and expectations can be usefully employed to improve probability of personal and organizational success.

One takes Kim Scott’s counsel on “Radical Candor” with some reservation because misused “Radical Candor” about a creative idea can discourage employee creativity. Scott’s counsel on building trust is her magic potion, but potions can kill as well as heal.

AMBITION

It takes more than ambition to build a successful organization or company. Unless one is a genius who can continually innovate, it takes management structure that encourages others to innovate and work for a common organizational purpose.

Books of Interest
Website: chetyarbrough.blog

Bad Blood (Secrets and Lies in a Silicon Valley Startup)

By: John Carreyrou

Narrated By: Will Damron

John Carreyrou (Author, French-American investigative reporter for the NY Times)

Ambition is the strong desire or drive to achieve something. The public story of Theranos is examined by investigative reporter, John Carreyrou. His subject is Elizabeth Holmes, a bright young woman who drops out of Yale to pursue an idea. Her idea is to create a blood testing system intended to diagnose medical conditions with potential for measuring effectiveness of drug treatment for existing disease. Her ability to sell an idea exceeded her ability to organize a company to create a product that accomplished that end.

Most companies or organizations will either fail or stagnate when led by only one innovator. There are exceptions but it requires an extraordinary leader, like a Steve Jobs, Ginni Rometty, Mary Barra, or Elon Musk. Their leadership skills may rub people the wrong way, but they have a superior perception of reality that is not singularly based on loyalty. They have the innate ability to offer enough innovation to grow their companies. (At the risk of offending supporters, loyalty is the threat of Trump’s management style. Trump principally bases his organizational decisions on loyalty.)

Elizabeth Holmes may have had a great idea, but her poor management skills are appallingly revealed in Carreyrou’s interviews with former employees of Theranos.

The only consistent management criteria practiced by Holmes is loyalty. If an employee appears disloyal to her vision of the company, they are fired. Any organization that principally relies on loyalty discourages innovation and becomes entirely dependent on orders of its leadership. Particularly in the tech industry, innovation is critical.

Elizabeth Holmes misled investors, patients, and doctors. She is convicted for fraud and conspiracy in 2022. She is serving an 11-year sentence in a Federal Prison Camp in Bryan, Texas.

Holmes’ ambition, in addition to her prison sentence, led to a $500,000 SEC’ fine and the return of 18.9 million shares of a company that no longer exists. Furthermore, the SEC ordered a ten-year ban on serving as an officer or director of a public company which, of course, becomes moot with her imprisonment. The irony of Carreyrou’s story is that Holme’s idea is presently being pursued by Babson Diagnostics, Stanford Researchers, and Becton Dickinson. Whether she will ever reap any reward from another company’s success seems remote, but it will presumably be based on patents filed, and licensing agreements based on former Theranos patents.

“Sunny” Balwani was also tried and convicted for Theranos’ misdeeds.

The 16th century phrase “birds of a feather flock together” comes to mind when Ramesh “Sunny” Balwani joins Theranos in 2009. He had loaned the company $13 million but he also knew Holmes from her days when she was learning Chinese in a Stanford summer program. At some point they became lovers despite a 19-year age difference. Carreyrou notes Balwani became a multi-millionaire with the sale of his tech company, Commerce One” in 2000. He was convicted of tax evasion for the sale but claimed the evasion was caused by his tax accountant which he sued for recovery for back taxes he had to pay. (There is a settlement amount between the tax accountant and Balwani, but it is not revealed.) Carreyrou explains Balwani was a martinet who brooked little disagreement when he became COO of Theranos in 2009. (Part of Holme’s defense was that Balwani was the principal behind Theranos misdeeds, but the court obviously disagreed.)

In 2022, Balwani was sentenced to 13 years in a federal prison for his involvement in what is characterized as Theranos fraudulent activities.

There are business management lessons in Carreyrou’s book about the misdeeds of Theranos. It takes more than ambition to build a successful organization or company. Unless one is a genius who can continually innovate, it takes management structure that encourages others to innovate and work for a common organizational purpose.

LABOR REVOLUTION

Todays’ workers are like the trees in life, i.e., they communicate with each other and provide for the needs of society.

Books of Interest
Website: chetyarbrough.blog

“The Problem with Change”

By: Ashley Goodall

Narrated by: Ashley Goodall

Ashley Goodall (Author, organizational consultant, served as a Senior VP at Cisco for 6 years and HR at Deloitte for 14 years.)

As an experienced Human Resources manager, Ashley Goodall addresses “The Problem with Change” in 21st century corporations. In the first chapters of his book, Goodall focuses on corporate change brought on by industry consolidation but later broadens his assessment of business management based on his experience and opinion.

**Goodall argues today’s businesses need to build from the bottom up rather than the top down.**

Arguably, today’s business enterprises become highly successful because of their employees and the way they are managed. As has been true since the industrial revolution, growing a business requires employees. The way employees are managed is slowly changing, in part because of changes in American capitalism. In America, a labor revolution has begun with the growth of knowledge workers and technology. In earlier times, business management was successfully managed from the top down.

Henry Ford (1863-1947) American industrialist who successfully created the incredibly successful Ford Motor company with top-down management.

Top-down management has become much less effective in the 21st century with knowledge workers who have a better understanding of their contribution to the success of a company than their CEOs. Goodall infers many American corporations continue to operate from the top down based on one criteria of performance–return on assets (some say profit, others say costs of doing and staying in business). The mistake of top-down management in modern times, is that return on assets is compromised because of its narrow focus on balance sheet numbers.

Goodall explains “The Problem of Change” is compounded with industry consolidation because top-down management diminishes the effectiveness of an acquired company’s knowledge workers.

Workers are only viewed as cost centers, not revenue producers. Goodall notes an acquiring corporation compounds their cost of acquisition and diminishes profitability by losing knowledge workers. “The Problem of Change” is both for the acquirer and the acquired. There is loss of motivation by workers who feel threatened by job loss and loss to the acquirer because too little value is given to the contribution made by knowledge workers.

Being employed in a capitalist society is part of one’s identity.

To lose a job, is a major loss for one’s identity. Goodall explains an acquiring company could benefit from consulting employees on their future after acquisition. Patience of the acquirer, and transparency with employees could inure to the benefit of both. Questions should be asked of employees about what their experience can contribute to the acquirer’s future plans. The acquirer should take some time to evaluate acquisitions before reorganizing.

Goodall refers to experimental studies that show how animals confined to a cage are shown how to escape a shock by jumping out, while other caged animals are not shown how to escape. Their responses are different. The uneducated animals presume the shock has become a part of their lives and choose to cower in their cages. An acquiring company needs to be transparent when acquiring a company so employees can make a rational decision to either jump or accept change. How many employees are cowering in their cages rather than leaving a company or having a company change their way of managing knowledge workers?

Empowerment is in the hands of an employee when he/she has an opportunity to explain what they can do for an acquiring company. With patience and transparency, the acquiring company may find that a particular team of knowledge workers may have an idea that will offer bigger opportunities.

Here is where Goodall explains how teams of knowledge workers are key to corporate success. Humans are social creatures. Whether introverted or extroverted, we wish to be a part of something bigger than ourselves.

In this technological age, the complications of work and life are beyond the comprehension of most individuals. It is natural for workers to seek help from other employees to understand their job and how it contributes to a company’s goals. That natural tendency leads to the development of teams, particularly in more technological companies. There is a synergy in teams that comes from one individual who likes doing something while others don’t. (Coding, for example, is a laborious and boring process for some but a fascination for others.)

In a corporate acquisition, the acquirer can choose to be transparent about their objectives with employees. An acquiring company can capitalize on existing teams or generate movement toward creating new teams in line with the needs of the new company. Of course, it can also lead to the exodus of employees who realize they do not fit the new company’s culture. What Goodall infers is leaving a company is better than living as a cowering employee that does not fit the new company’s culture.

**Goodall ends his book by characterizing workers like transplanted trees.**

Trees communicate with each other through their root system. Some trees flourish better than others based on when they were transplanted. If they were transplanted when young, they flourished; when older, they still grew but had fewer branches and leaves. All still offer a product needed by society. Todays’ workers are like the trees in life, i.e., they communicate with each other and provide for the needs of society.

BUSINESS MANAGEMENT

“Drucker” is an interesting book about an important 20th century professor and storied business consultant.

Books of Interest
Website: chetyarbrough.blog

“Drucker” (The Man who Invented the Corporate Society)

By: John J. Tarrant

Published in 1980–No picture available of the author, John J. Tarrant.

Peter Drucker was a world-renowned business and government management consultant in the mid-twentieth century. John J. Tarrant’s personal memoir is about Peter Drucker’s business and government management beliefs. A lack of approval or acknowledgement of Tarrant’s book by Drucker reinforces one’s belief in Tarrant’s objectivity.

With my personal experience as a neophyte business manager in the 1970s, Peter Drucker was a business consultant we studied in management development classes.

There were several group meetings with other managers in the company for which I worked. In those meetings we discussed Drucker’s views on business management and practice. Drucker had a profound effect on me and how I managed my part of the business.

A fundamental point made by Drucker is that a business’ manager must focus on strengths, not weaknesses of people reporting to him or her.

The principle of that focus is that every manager is charged with setting goals while recognizing he/she needs to build around personal weaknesses with direct report’ employee’s strengths. The point is that a manager and/or employee in an organization is unlikely to know all there is to know to achieve a company’s goals. Drucker argues the purpose of business is to sustain itself by achieving determined objectives. It is not about profit but about sustaining a business’s future. That principle applies to government departments as long as they continue to serve the needs of the public. When businesses or government departments fail to preserve their future or purpose, they deserve dissolution.

What Tarrant notes in his memoir is that Drucker believes government departments do not have the same incentives as businesses and tend to become self-perpetuating when their original purpose is achieved. Businesses disappear or go bankrupt because they do not generate enough revenue to sustain their future. Drucker suggests government departments rarely disappear. They become self-perpetuating. They are protected by public taxes, not the principle of free market revenue. Tarrant infers Drucker believes government departments should be dissolved when their goals are achieved.

Tarrant categorizes Drucker as a conservative but not in a 21st century Republican sense but in a belief that government tends to waste public taxes because their goals tend to evolve from service to the public to employment-preservation. Government departments should not exist as an employment haven without public purpose.

Tarrant notes Drucker voted as a Democrat. As an Austrian born American, Tarrant notes, he only voted for a Republican President twice in his lifetime. Drucker is alleged to regret having voted Republican the two times he did. One was for Nixon and the second I can’t remember. This is not to suggest Drucker was partisan because his focus was on management, not politics. “Drucker” is an interesting book about an important 20th century professor and storied business consultant.

Share this:

Share this:

Share this:

Share this: