Coleman McCormick

Archive of posts with tag 'Management'

The CUA Factor →

August 2, 2024 • #

From the latest issue of Res Extensa: thoughts on Andy Grove’s idea of “modes of control”, from High Output Management:

Thinking about this in the context of my own work, I can map past hardships and bad business decisions to mismatches in environment and mode. As managers, what we most often don’t respect enough is the nature of the CUA factor with a given job, project, or task. This mental framework for thinking about relationships is helpful for selecting the appropriate communication or management mode.

This simple 2x2 is one of the more interesting idea from the book.

✦
August 2, 2024 • #

Modes of Control →

An interesting idea from Andy Grove’s High Output Management.

✦

How to Think About Your Competitors

October 10, 2022 • #

For any company, keeping track of your position in the competitive landscape is an important element of making the right decisions. When I think about competitors, I think about them separately as “direct” vs. “indirect”:

  • Direct competitor: one with a product offering highly similar and seen by your customer as a direct substitute
  • Indirect competitor: one that might look glancingly similar (or very different) on the surface, but addresses the same jobs to be done

Direct vs. indirect doesn’t matter all that much at the end of the day; you’re still trying to occupy the same problem space for your target audience. The important piece is to remember that it should be inclusive of the indirect: those that obliquely address the same concern for a user.

The big question is: how much time and attention should you spend on monitoring and analyzing your position relative to your competitors? Clearly the right answer lies somewhere on the spectrum between none and way too much.

It’s commonplace to skew too far to the left or right on this spectrum — to either be too concerned with the day-to-day movement of what your competitors are doing, or to have too much confidence in your own position, willfully ignoring what your competitors or the market are doing. On one end you can’t stop worrying about it every time a customer mentions a competing product’s features. On the other, you’re saying “we have no competition.”

Clearly the right answer is somewhere in the center, taking behaviors from each side and combining them in creative ways to do something unique, but with enough similarity to the market that you can sell the future you’re building with minimal friction.

What if we could think about “competitive attention” on a spectrum? The spectrum could go from:

  • Zero attention on competitors or the market, to
  • Spending all of your time worried about and analyzing what competitors are doing

Broadly speaking, moving along each direction of the spectrum trends toward being more of a leader or a follower. Leaders blaze their own path and drive toward a vision of the future they define. Followers can’t stop chasing what someone else is doing. It might sound like I’m making the case for “leader” here — after all, leader has the positive connotation, and follower makes you sound like an also-ran. But there are plenty of areas in all businesses where it’s smart to conform to market norms rather than trail-blazing. You should make sure your unique, innovative edge is concentrated in specific areas. Even world-changing product innovators don’t completely ignore what existing markets look like of course.

The best companies view the world from a demand perspective (What do customers want? What are the jobs to be done?) rather than a supply one (Who is building what in the market?)

Let’s define a spectrum, and some points along it:

Definitions on the spectrum — the left side leans toward independence (with an extreme of brazen ignorance), the right toward paranoia (some is a healthy thing, but in the extreme, it’s obsession):

  • Independent mindset:
    • ⟽ Willful Ignorance — You’re irrationally overconfident in your market position. You intentionally don’t care what competitors are doing, you denigrate other options or solutions as irrelevant or obsolete, and you believe you’re more important to your customer than you are. “We could never be replaced” (You can definitely be replaced).
    • ⟻ Blissful NaivetĂŠ — You don’t go so far as to think you’re invincible, but you have an ignorance of the market due to naivetĂŠ more than overconfidence. You don’t bother to spend the time to understand the landscape you participate in.
    • ⭐️ Creative Confidence — The ideal place to be. Confident in your own ideas, maintaining the ability to design and build solutions independently of what others in the market are doing. You focus on creating from first principles based on customer demand, not on copying what others do.
  • Paranoid mindset:
    • ⟾ Dangerous Obsession —  You let competitors dominate your thinking, constantly worried that every new one you discover is already eating your lunch. You call meetings and have big discussions about what competitors are doing, in the worst cases moving your own goalposts continuously when competitors make movements. Instead of worrying about how to solve your current customers’ problems and inventing new solutions for them, you’re spend all your time looking for a customer you don’t have. The grass is always greener somewhere else.
    • ⟼ Frequent Distraction — You do spend time with your own customers looking at what you can build for them, but you let what other people are building distract you from the time required to build truly novel product. Monitoring others’ feature lists and building comparison matrices steals away enough attention to slow you down in your new creative efforts. You pull punches on your innovative work because you’re scared to step too far off a well-trod path. Keeping up with what’s in the rearview steals away your attention from solving your current customer’s problems.
    • ⭐️ Informed Balance — You’re knowledgable about the market and its players, but not in a way that keeps you up at night. you have a confident, informed understanding of what other players can do, and you spend most of your time in “competitive” headspace thinking about articulating your differentiation. Because you’re out in front building your own thing, people copy you more than the other way around. But you do maintain just enough useful paranoia to temper your overconfidence.

It takes willful effort to position your mind in the right spot on the line. And depending on the situation, pushing your view left or right is defensible. In some areas you shouldn’t care what the competition is doing — dare to solve the problem differently. In other cases, not all things you need to build are key differentiators; some things are simply table-stakes things that need doing. Innovation and creativity are expensive. You want to spend those resources where they count.

✦

Weekend Reading: Collaborative Enterprise, Algorithms, and Fifth-Gen Management

October 3, 2020 • #

💼 Collaborative Enterprise

Elad Gil describes the trend of continuing consumerization of enterprise software.

🤖 Seeing Like an Algorithm

Part 2 in Eugene Wei’s series on TikTok. See part 1.

🏫 Fifth Generation Management

Venkatesh Rao’s Breaking Smart podcast is always a must-listen.

✦

Talk Notes: Spolsky on Pluralism

August 19, 2020 • #

One of my favorite evening activities is watching talks, interviews, and presentations on YouTube. I often take notes on these for myself, so this is an experiment in brushing up those notes and sharing them publicly.

In this 2016 talk, Joel Spolsky presented this talk called “The History of Management” as an internal training session at StackOverflow. Corporate structure dynamics are fascinating. Groups of people have developed new and more effective ways of cooperating throughout history. We started out organizing ourselves in kinship-based tribal groups with spiritual myth-making to rationalize decisions, and have evolved into the likes of Amazon’s expansive 100,000 person decentralized model or Apple’s global functional org chart.

I like that I this talk Spolsky goes back to the beginnings of group organizing models. He covers this evolution in 6 broad phases:

  • Archaic
  • Magic
  • Impulsive
  • Conformist
  • Achievement
  • Pluralistic

Methods of organization and cooperation are technologies; once we discovered learning through trial and error (particularly through application of scientific methods), we’ve continued adapting and modify them over time.

Most of the substance covers the last 3 stages, each of which you’ll still find in operation today. Here’s the talk, followed by my notes below.

Notes

Just as with technological advancement, governance, and many other things, we’ve moved through each new stage faster than its predecessor. Let’s go through each stage and describe its time period and relevant details about what made it unique.

  • Archaic (100,000 — 50,000 BC)
    • From an age before people could classify things
    • No specialization or division of labor
    • No hierarchy, elders, or chiefs
    • Bands capped out at a few dozen people
  • Magic (15,000 — 0 BC)
    • People had no understanding of death
    • No ability to form abstract concepts
    • Still no specialization
    • Cause and effect was poorly understood — wherever there was any attempt to understand, spirits and magic were attributed as causes
    • Tribes could grow up to several hundred
  • Impulsive (8,000 BC — 1900 AD)
    • Might makes right — power and control is derived from physical strength and dominance
    • The weak have to submit to authority
    • Leaders have a lack of awareness and empathy
      • No value placed on the individual or individualism
    • Black and white worldviews were dominant
    • Rewards and punishments well understood, but violence was commonplace (it was the primary means for asserting and proving your authority)
    • Ego and role differentiation — meant we could differentiate roles and responsibilities, leads to some specialization
    • High levels of instability
    • The chief must:
      • Continually demonstrate power
      • Spread myths about absolute power
      • Surround self with family to insulate from challenges to power and control
      • Buy loyalty
      • Only keep incompetent aids and advisors — if advisors are too capable, they could challenge authority
    • Examples
      • Failed states, places with no rule of law
      • Gangs
      • Mafia
      • TV and movie plotlines

The first three are obsolete — you only really see them appear in movies, fiction, or history books. The final three are still in common existence today.

  • Conformist (4,000 BC — present)
    • Huge advancement over “Impulsive (8,000 BC — 1900 AD)” systems
    • Examples: US Army, MTA, Catholic Church, East India Company
    • Defined by rigid, unchanging bureaucracy
      • Understand time as finite and linear
        • Cause and effect
        • Farming (plant now, eat later)
        • Caloric surplus
        • Surplus energy means we can do “extra stuff” — administrators, craftsmen
    • Understanding other people’s points of view
      • People will seek approval, leaders want approval from followers
      • Adopting group norms and conformism (us vs. them)
      • Fitting in requires self-discipline, can’t be all impulse
    • We develop moral codes assumed to be universal and immutable
      • Do right â­˘ earn rewards; do wrong â­˘ get punished
    • Creates structures — bureaucracies, hierarchies, castes, strict roles, institutions
      • Compared to earlier models, Conformism offers comparative stability and security
      • Arbitrarily scalable, templates can be cloned
        • There is One Right Way
      • End up with a rigid hierarchy of titles, org charts, ranks, uniforms
      • Unfortunately Conformist models lead to exclusion of non-conformists or outsiders, highly stratified (to a fault)
    • Long-term perspective is possible
      • Can build things over centuries
      • Global trading networks
    • But because of the rigidity and fixed nature of the structure, Conformist orgs often fail to adapt to a changing world
    • “Compliance”-focused organizations
      • Thinking is at the top, doing is at the bottom
      • Decisions are “handed down”
      • People “report up”
      • Rulers are assumed to be smart
      • Default assumption is that workers are lazy, and need supervision
    • You don’t have to fight for power or watch your back (it’s all in the system)
    • Mores and norms
      • Us vs. them
      • Loyalty for life
      • Leaving or being fired is terrible
  • Achievement (1945 — present)
    • Examples: Walmart, Coca Cola, Nike, Microsoft, GE, modern multinationals
    • Made possible through science, the scientific method, and imagining other worlds to pursue
    • Fundamental assumption is the world is changeable: we can study it and figure out
    • No absolute right or wrong
      • Pragmatism — decisions made based on right and wrong, what works and what doesn’t
      • “Best practices”
      • Use science, do experiments
      • Innovation
    • It’s possible to imagine alternate worlds
      • Skepticism is valued; we should question our current assumptions
      • We can question authority
    • Led to unprecedented prosperity in last century
      • Massive human liberation
      • But side effects like corporate greed and environmental problems
    • Innovation is a core pursuit
      • Constant improvement
      • Change around us is an opportunity to differentiate ourselves
      • We do projects with objectives, not just carrying out pre-determined processes (uses a goal-oriented approach, often driven by a metric)
    • Accountability is paramount
      • People are brains, not just labor; have to trust employees to deliver
      • Management by objectives becomes central, companies work toward goals (OKRs)
        • Management sets goals, people figure out how
        • Creation of performance reviews, bonuses, rewards to align people with objectives
        • But egos can prevent proper delegation (manager doesn’t really stay hands-off the “how”)
        • Budgets cause sandbagging
        • Hard to manage what you can’t measure (a creeping focus on legibility over impact can result)
          • People find shortcuts and game the system to show progress on those metrics
    • Meritocracy advances from the Conformist model
      • Anyone can become a CEO
      • Symbols of hierarchy are shunned (or at least less important)
    • We still talk of a “corporate ladder” to move up — vestiges of Conformism
      • Still org charts and hierarchies
      • But lots of cross-talk and cross-team projects
      • Communication doesn’t need to go through chain of command, often encouraged to go point-to-point
    • Downsides with “Achievement (1945 * present)”
      • End up pursuing growth for growth’s sake (is there a higher purposes than profits and size?)
      • Create customer needs that aren’t real; even more pervasive when chasing legibility and measurable metrics
      • No meaning to it all
  • Pluralistic (1980 — present)
    • Modern, purpose-driven organizations; built on top of Achievement organizations
    • Examples: StackOverflow, Patagonia, Etsy, Atlassian, most startups
    • Empowerment as a core virtue
      • Decision-making is pushed down to the lowest level it can be done
        • Person with the most information makes the decision
        • Intel in the 1980s under Andy Grove pioneered this approach, at least openly
      • Pluralism prizes autonomy and individual agency
      • This means managers have to give up control
      • Organization becomes closer to a network than a hierarchy
      • Servant leadership; leadership should function as inspiration, support, assistive enablers
        • Listen to, empower, develop, and motivate subordinates
      • 360 feedback valued — feedback loops up, down, and across, a means of error correction within the organization
      • Managers chosen by and from rank and file
      • Requires management training and development, it’s most effective to breed leaders from within
    • Multiple stakeholders now
      • Not just shareholders
      • Employees, community, customers, suppliers, society, environment
        • Values improving conditions within their suppliers
        • Eliminating wasteful packaging
        • Extraordinary working conditions provided for team and selves
    • Pluralism is not anarchy
      • Discarding hierarchy completely doesn’t work for any meaningful amount of time, or with large groups
        • Is there a relationship here with [[Dunbar number]] and how many people can collaborate in a group successfully?
        • Decentralization is a tactic deployed as much as possible to empower those local to a problem or project to identify those issues and formulate solutions
    • New technologies enable pluralistic management styles
✦

Weekend Reading: Attention, Hill Climbing, and Enforcing Culture

October 5, 2019 • #

🧠 To Pay Attention, the Brain Uses Filters, Not a Spotlight

For a long time, because attention seemed so intricately tied up with consciousness and other complex functions, scientists assumed that it was first and foremost a cortical phenomenon. A major departure from that line of thinking came in 1984, when Francis Crick, known for his work on the structure of DNA, proposed that the attentional searchlight was controlled by a region deep in the brain called the thalamus, parts of which receive input from sensory domains and feed information to the cortex. He developed a theory in which the sensory thalamus acted not just as a relay station, but also as a gatekeeper — not just a bridge, but a sieve — staunching some of the flow of data to establish a certain level of focus.

⛰ Climbing the Wrong Hill

Using the hill climbing problem as an analogy for challenging yourself and achieving long-term goals.

👨🏽‍💼 What Do Executives Do, Anyway?

The key takeaway of High Output Management:

To paraphrase the book, the job of an executive is: to define and enforce culture and values for their whole organization, and to ratify good decisions.

That’s all.

Not to decide. Not to break ties. Not to set strategy. Not to be the expert on every, or any topic. Just to sit in the room while the right people make good decisions in alignment with their values. And if they do, to endorse it. And if they don’t, to send them back to try again.

✦

Managerial Leverage

August 5, 2019 • #

Andy Grove is widely respected as an authority figure on business management. Best known for his work at Intel during the 1980s, his book High Output Management is regularly cited as one of the best in the genre of business books. After having it on my list for years and finally reading it earlier this year, I’d wholeheartedly agree. It’s the best book out there about business planning, management, and efficiency, still just as pertinent today as it was when it was first published in 1983.

Its relevance more than 30 years later attests to the universality of its value. I’ve mentioned before here my personal interest in understanding first principles approaches to thinking over derivative systems typically touted by the self-help and business publishing community. The book’s extreme practicality and information density falls in line with what you’d expect from an engineer like Grove — light on the fluff and “case study”-type stuff that permeates and inflates page counts of other business books.

I’ve written here before about a couple of specific topics from the book — about Grove’s perspective on meetings, and on the concept of “modes of control” — but I wanted to give some more space to the book overall, as I believe it’s one of those rare pieces of core reading material on which hundred of other works are based.

Managerial leverage

The thesis he lays out is simple in principle: a business is a machine, the people and processes are its parts, with inputs (human effort, ideas, work) and outputs (its products and services). To develop a high output system, you have to peel apart its internal components, inspect how they interface with one another, and create a management infrastructure throughout that enables high leverage. Throughout the book’s chapters he touches on the stables of a manager’s workload: planning, meetings, making decisions, reporting, oversight, training, and more. What’s truly important isn’t any one of these particular components, though, it’s in the efficiency of the connections between them. In the analogy of the business to a machine, effective management is the design of the parts, the connections between them, and the lubrication to avoid slippage.

I’ll point out here that the book’s value is not limited to those that manage people. If you manage any system or procedure at all you’ll get value out of it. In fact, it’s useful to anyone that wants to understand what makes their organization tick and where they might fit into the machinery.

Creating Clarity from Abstraction

One of the driving factors that’s created a cottage industry around business processes, teamwork, and strategy (an industry that’s generated thousands of how-to books on the theme) is that the modern era of “knowledge work” requires working in so many abstractions. In the good old days of industrial production, the inputs, outputs, and stages in between were manifest in physical systems you could watch working together. Grove recognizes this point early1 (emphasis mine):

Of course, the principle of work simplification is hardly new in the widget manufacturing arts. In fact, this is one of the things industrial engineers have been doing for a hundred years. But the application of the principle to improve the productivity of the “soft professions” — the administrative, professional, and managerial workplace — is new and slow to take hold. The major problem to be overcome is defining what the output of such work is or should be. As we will see, in the work of the soft professions, it becomes very difficult to distinguish between output and activity. And as noted, stressing output is the key to improving productivity, while looking to increase activity can result in just the opposite.

Too many businesses sit down and “strategize” by developing high-altitude mission statements, corporate principles, and annual goals. There’s nothing wrong with these things, but they ultimately aren’t granular enough to become actionable by individual team members. Aligning around a well-articulated output at each employee’s level is critical to avoiding the “busyness” syndrome that plagues so much of the modern workplace. What’s missing is a tool to bridge this gap between high-minded mission statements and employees, one that arms them with actionable targets they can point at and measure progress on — enter OKRs.

Objectives, Results, and Measurement

A key concept articulated in High Output Management, one that’s been adopted widely today, is the Objectives and Key Results (OKRs) framework. It’s clear from the way Grove articulates it that he didn’t see OKRs as some kind of brand-building opportunity with an intent to sell this idea to the business community; he merely saw it as a way to give the company a circulatory system throughout to keep its teams in alignment on output. Like many of the ideas in the book, he has a succinct style of communicating these ideas that make them seem patently obvious, with a clarity that’s easy for anyone to comprehend.

Anyone in the knowledge work space (which is most of us) has seen this all over our organizations. Without the focus around the outcome — What exactly are we making? What do we want that to do for us? Why? — any organization can dissipate much of its energy in simply performing activities, the way an inefficient machine gives off much of its energy as heat from friction. The mission then is to make sure any activity performed at any level is clearly tied to output that stacks up with the organization’s top-level expectations.

The venture investor John Doerr, most known for his work with Kleiner Perkins and investments in Amazon, Google, Netscape, and other early internet companies, was an employee and colleague of Grove in the Intel days. I recently read his Measure What Matters, a book on the concept of OKRs and how they’re employed in various modern businesses. My problem with that book was that it’s simply a retelling of the core principles laid out in High Output Management, with most of the pages devoted to the “see how it works for organization X?” type of commercial trying to sell you on the idea of OKRs. That might be a good communication style for a certain type of reader, but I’d rather have the core building blocks and let me do the imagining of how it might impact my own work and organization. There are tons of other books and blog posts out there about OKRs, but I’d point anyone looking into them to High Output Management as a resource.

At the core OKRs are a great system because of how little “system” there really is. They’re intended to get a bunch of diverse people in a hierarchy working as a well-oiled machine, with the strongest emphasis on keeping the machine and it’s components focus on shared, agreed-upon outcomes. It’s about having the diligence to create a stacked set of priorities and goals, mutually agreed on, that cascade from the top down into the ranks. A well-designed OKR process should create a universe where everyone in the organization can point directly to their objectives, and any colleague can see the wiring up and down from there to the OKRs of others.

Writing as Reporting (and Thinking)

It’s partially my personal style, but I’m a huge believer in the idea of writing as a tool for status reporting, intra-office communication, and teamwork. Not only does writing things down create a log of someone’s idea or design concept, it’s a fantastic medium for forcing critical thinking. Jeff Bezos has famously required agendas for meetings at Amazon to be written up as long form proposals. This forces rigor in having focused meetings with thought out discussion topics. No one will spend time writing up a document if they don’t truly believe in it or haven’t thought it through, which saves everyone the wasted time of discussing poorly-considered ideas. The act of writing something down also forces you as the generator of an idea to ruminate on its implications, think about how to articulate it, and to create an element of knowledge to leave as an institutional guidepost for future coworkers thinking about related ideas.

Grove approaches managerial reporting and planning from a similar angle. While he highly values passing informal conversation in maintaining time-sensitive communication, he respects writing as a tool for clear thinking2:

I have to confess that the information most useful to me, and I suspect most useful to all managers, comes from quick, often casual verbal exchanges. This usually reaches a manager much faster than anything written down. And usually the more timely the information, the more valuable it is.

So why are written reports necessary at all? They obviously can’t provide timely information. What they do is constitute an archive of data, help to validate ad hoc inputs, and catch, in safety-net fashion, anything you may have missed. But reports also have another totally different function. As they are formulated and written, the author is forced to be more precise than he might be verbally. Hence their value stems from the discipline and the thinking the writer is forced to impose upon himself as he identifies and deals with the trouble spots in his presentation. Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.

This same logic applies to so many things in business — the final version of a report, design spec, marketing strategy, or budget isn’t where all the value lies; the final output document is what enforces the discipline of that business process. The requirement to come away with the “Budget 2020.xlsx” file forces us to run through the planning process thoroughly. If done well, we only need to look at the document as a quarterly gut check. The planning process itself makes us think through priorities, objectives, and where we want to focus.

Add It to the Library

There’s a lot more excellent material in the pages of High Output Management than I can cover in a single blog post. My paperback copy sits on my shelf in my office and is scribbled all over. I pull it out regularly to cite paragraphs or reference things for my own communication within the company. It’s one of my first recommendations to anyone looking for a book on business or productivity.

  1. High Output Management, p. 36. â†Š

  2. ibid., p. 48. â†Š

✦

Modes of Control

March 21, 2019 • #

I’ve nearly finished reading Andy Grove’s High Output Management. Grove was the one of the founders and CEO of Intel, especially famous for his leadership of the company’s shift from design and fabrication of memory to microprocessors in the 80s.

The book is mostly well known for documenting Grove’s management style, which was later formalized into the OKR framework now widely used by Google and others.

But one of my favorite bits from the book (and there are several) is his concept of “modes of control.”

The fundamental idea is that there are different models in which actions can be controlled or influenced on two dimensions: where the motivations lie and the complexity of the environment (which he terms complexity, uncertainty, and ambiguity, the “CUA factor”).

Modes of control

The axes run across these two spectra:

  • Group Interest → Self Interest
  • Low CUA → High CUA

Then there are the “modes” themselves. Grove emphasizes the importance of selecting the appropriate mode of control for the position of the relationship or environment, with three fundamental modes:

  • Free market forces — Purchasing new tires, you select the lowest price and highest quality for your personal need. High self interest, low ambiguity.
  • Contractual obligations — Traffic signals and stop signs. There’s a high group interest in all of us obeying the rules, and low ambiguity about how to do so.
  • Cultural values — Getting promoted or hired into a leadership role in a company. Group interest must be satisfied for the company success, but ambiguity can be very high as to how to know what to focus on. Strong cultural values in an organization help guide leaders to the right decisions.

Each combination of motivation and ambiguity creates a unique environment with an optimum mode. In thinking about this in context of my own work, I can easily map past hardships and bad business relationships to a mismatch in environment/mode. In the workplace as managers, what we most often don’t respect enough is the nature of the CUA factor with a given job, project, or task. This mental framework for thinking about relationships is helpful for selecting the appropriate communication or management mode.

When self interest and ambiguity both spike up, you get chaos. The “everyone for themselves” panic on a sinking ship.

✦

How Google Sets Goals

March 8, 2019 • #

I’ve been thinking and reading more about OKRs and how I might be able to implement them effectively — both professionally and personally. The idea of having clearly defined goals over bounded timelines is something we could all use to better manage time, especially in abstract “knowledge work” where it’s hard to see the actual work product of a day or a week’s activity.

This is an old workshop put on by GV’s Rick Klau. He does a good job giving a bird’s eye view of how to set OKRs and the importance of linking them through the organizational hierarchy:

He also has a good post on the subject from a few years later.

✦
Browse the full archive →
✦