Category: Management

In Managing Workers Firms Should “Experiment with New Forms of Freedom”

(p. C1) In a classic 1958 lecture, the philosopher Isaiah Berlin distinguished between two types of freedom. Negative liberty is freedom from obstacles and interference by others. Positive liberty is freedom to control your own destiny and shape your own life. If we want to maximize net freedom in the future of work, we need to expand both positive and negative liberty.

The debate about whether work should be in-person, remote-first or hybrid is too narrow. Yes, people want the freedom to decide where they work. But they also want the freedom to decide who they work with, what they work on and when they work. Real flexibility is having autonomy to choose your people, your purpose and your priorities.

. . .

(p. C2) We need boundaries to protect individual focus time too.

. . .

One effective strategy seems to be blocking quiet time in the mornings as a window for deep work, and then coming together after lunch. When virtual meetings are held in the afternoon, people are less likely to multitask—probably in part because they’ve been able to make progress on their own tasks.

. . .

Flexible work is here to stay, but companies that resist it may not be. One of the biggest mistakes I saw companies make before Covid was failing to experiment with new forms of freedom.

For the full commentary, see:

Adam Grant. “The Real Meaning of Freedom at Work.” The Wall Street Journal (Saturday, Oct. 9, 2021 [sic]): C1-C2.

(Note: ellipses added.)

(Note: the online version of the commentary was updated October 8, 2021 [sic], and has the same title as the print version.)

Akio Toyoda Had the Courage to Predict the Current EV Debacle

On Nov. 25, 2022, I ran a blog entry that reported on the severe criticism that then-Toyota-President Akio Toyoda [sic] was receiving for his skepticism that charging infrastructure and consumer preferences were ready for an immediate full switch to electric vehicles. Because he had the courage to keep Toyota focused on hybrids, consumers now have more of what they need and want. As a result Toyota prospers. In a capitalist system, firms run by executives with foresight and courage receive their just reward.

(p. B1) TOKYO—Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.

Toyota on Tuesday [February 6, 2024] forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.

Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.

Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.

For the full story, see:

River Davis. “Toyota Is Cashing In As Hybrid Sales Boom.” The Wall Street Journal (Wednesday, February 7, 2024): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date February 6, 2024, and has the title “Toyota Cashes In on Booming Hybrid Sales.”)

Zuckerberg Praises Musk for Not Being Too Shy to Reduce Staff at X

(p. R3) At the beginning of the year, many were quick with predictions of X’s demise, in part because of the dramatic staff cuts made by Musk.

. . .

Perhaps the biggest impact of Musk’s staff reductions was provoking a broader conversation about staffing needs and overall productivity throughout Silicon Valley.

Even rival Mark Zuckerberg praised Musk for removing layers of management. “I also think that it was probably good for the industry that he made those changes because my sense is that there were a lot of other people who thought that those were good changes but who may have been a little shy about doing them,” the Facebook co-founder said.

For the full commentary, see:

Tim Higgins. “Elon Musk as Technoking? More Like DramaKing.” The Wall Street Journal (Monday, Dec. 18, 2023): R3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date December 16, 2023, and has the title “In the Year of a DramaKing: Elon Musk.”)

The Social Security Administration Is Badly Administered

(p. B1) Few government agencies touch the lives of more Americans than the Social Security Administration — the agency pays $1.4 trillion in benefits to more than 71 million people every year.

But Social Security has been grappling with a customer service mess that threatens to grow worse before it gets better. The problems include long wait times on the agency’s toll-free phone line, a large backlog in disability applications and a growing problem with overpayments to low-income beneficiaries.

. . .

Training new workers typically takes more than a year because Social Security rules are so complex.

. . .

The waiting time on S.S.A.’s phone line, which is crucial for people with questions about benefits or those applying for benefits, averages 36 minutes. Average wait times have fluctuated over the past decade, but in 2013 the average wait time was 10 minutes. The agency recently began using a modernized toll-free phone system, but noted that more trained employees will be needed to reduce wait times.

There is a backlog of more than one million people waiting an average of seven months for initial decisions on disability benefit applications — a process that has been slowed by staffing issues at the agency and in state governments, which receive S.S.A. funding to determine applicants’ eligibility at the local level.

The agency also is under fire over overpayments of benefits that have led the agency to claw back billions of dollars, with some people receiving notices that they owe tens of thousands to the S.S.A.

. . .

Earlier this year [2023], the Social Security Administration placed last in a ranking of the best places to work in the federal government — . . . .

For the full commentary, see:

Mark Miller. “Social Security’s Customer Service Struggle.” The New York Times, SundayBusiness Section (Sunday, December 3, 2023): 7.

(Note: ellipses, and bracketed years, added.)

(Note: the online version of the commentary has the date Dec. 2, 2023, and has the title “When You Call Social Security, Expect to Wait Even Longer.” In a couple of places where the online version is slightly longer than the print version, the passages quoted above follow the online version.)

“Context Switching Is the Mindkiller”

(p. B7) “My mind often feels…like a very wild storm,” Musk said Wednesday in the same interview. “I’m a fountain of ideas. I mean I have more ideas than I could possibly execute. So I have no shortage of ideas. Innovation is not a problem, execution is a problem.”

He was speaking at the New York Times DealBook Summit on Wednesday [Nov. 29, 2023] in New York City, a high-profile event run by one of the media juggernauts he has been openly needling.

He was only there, Musk said, because of his friendship with the host, Andrew Ross Sorkin. Or, as Musk called him on stage, “Jonathan.”

“I’m Andrew,” Sorkin said.

. . .

“Context switching is the mindkiller,” he tweeted the day after Thanksgiving, a favorite axiom of his that mixes a quote from the sci-fi book “Dune” with computer lingo for multitasking.

In “Dune,” fear is the mindkiller—the idea that the primal reaction to fear is to recoil rather than go forward. In essence, fear is an obstacle to be overcome to reach success. For Musk, the challenge to overcome is being able to handle switching between rockets and tweets and cars and brain computers and drilling machines and superhuman artificial intelligence.

. . .

In the moment that ricocheted around the world, Musk told advertisers unhappy with him to go f— themselves, saying he was unwilling to pander to their “blackmail” and warned they threatened to bankrupt the social-media platform he acquired slightly more than a year ago. And if they were successful, he warned, “See how Earth responds to that.”

. . .

To Musk, the likes of Disney are trying to squelch his freedom of speech. To others, they are simply exercising their rights to walk away.

“Go. F—. Yourself,” Musk said on stage to a stunned audience. “Is that clear? I hope it is. Hey, Bob, if you’re in the audience.”

For the full commentary, see:

Tim Higgins. “Storm in Musk’s Mind Casts Shadow on Vehicle Launch.” The Wall Street Journal (Monday, Dec. 4, 2023): B7.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the commentary has the date December 2, 2023, and has the title “The Storm Brewing Inside Elon Musk’s Mind Gets Out.” The 7th, 8th, and 9th sentences quoted above, appear in the online, but not in the print, version of the commentary. Also, the online version of the sentence on being able to handle switching, contains seven added words of detail.)

The science-fiction Dune book mentioned above is:

Herbert, Frank. Dune. Deluxe ed. New York: Ace, 2019 [1st ed. 1965].

Planners of Megaprojects Almost Always Over-Promise and Under-Deliver

(p. B5) Bent Flyvbjerg is an expert in the planning and management of “megaprojects,” his name for huge efforts that require at least $1 billion of investment: bridges, tunnels, office towers, airports, telescopes and even the Olympics. He’s spent decades wrapping his mind around the many ways megaprojects go wrong and the few ways to get them right, and he summarizes what he’s learned from his research and real-world experience in a new book called “How Big Things Get Done.”

Spoiler alert! Big things get done very badly.

They cost too much. They take too long. They fall too short of expectations too often. This is what Dr. Flyvbjerg calls the Iron Law of Megaprojects: “over budget, over time, under benefits, over and over again.”

The Iron Law of Megaprojects might sound familiar to anyone who has survived a home renovation. But when Dr. Flyvbjerg dug into the numbers, the financial overruns and time delays were more common than he expected. And worse. Much worse.

His seminal work on big projects can be distilled into three pitiful numbers:

• 47.9% are delivered on budget.

• 8.5% are delivered on budget and on time.

• 0.5% are delivered on budget, on time and with the projected benefits.

. . .

Humans are optimistic by nature and underestimate how long it takes to complete future tasks. It doesn’t seem to matter how many times we fall prey to this cognitive bias known as the planning fallacy. We can always ignore our previous mishaps and delude ourselves into believing this time will be different. We’re also subject to the power dynamics and competitive forces that complicate reality, since megaprojects don’t take place in controlled environments, and they are plagued by politics as much as psychology. Take funding, for example. “How do you get funding?” he said. “By making it look good on paper. You underestimate the cost so it looks cheaper, and you underestimate the schedule so it looks like you can do it faster.”

For the full review, see:

Ben Cohen. “SCIENCE OF SUCCESS; 99% of Big Projects Fail. Lego Is the Fix.” The Wall Street Journal (Saturday, February 4, 2023): B5.

(Note: ellipsis added.)

(Note: the online version of the review has the date February 2, 2023, and has the title “SCIENCE OF SUCCESS; 99% of Big Projects Fail. His Fix Starts With Legos.”)

The book under review is:

Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between. New York: Currency, 2023.

Tom Watson, Jr. Managed IBM’s Rare and Successful Self-Disruption by “Transitioning the Firm to Electronic Computing”

(p. 9) Thomas J. Watson Jr. seemed, from a young age, to be destined for failure.

. . .

“He played with fire, shot animals in the nearby swamps and pilfered things from neighbors’ houses,” Ralph Watson McElvenny and Marc Wortman write in “The Greatest Capitalist Who Ever Lived,” a compelling new biography of Watson Jr.

. . .

This is far from the first book about IBM.

. . .

But this is probably the most theatrical book about IBM ever published. McElvenny, who happens to be Watson Jr.’s eldest grandson, is privy to “personal and corporate papers” and, as the endnotes mysteriously specify, many “family sources.”

. . .

“The Greatest Capitalist Who Ever Lived” is about the challenges of corporate and family succession, an essential topic given that IBM itself was the father figure to most of the computing and tech industry. Watson Sr., “the old man,” was a type familiar to our times: the tech titan who runs a large company as an extension of himself. (The IBM machine that beat the “Jeopardy!” champion Ken Jennings bears his name.) For four decades, IBM was Watson Sr.’s fief. The company “was run entirely out of one man’s breast pocket,” McElvenny and Wortman write. Watson Sr. “made all strategic decisions and most minor ones” and “delegated almost no authority.”

To his lasting credit, he did truly take care of his employees and their families in a manner that bred a strong loyalty. That said, Watson Sr. demanded conformity and could be erratic and cruel.

. . .

IBM faced a classic version of what the Harvard Business School professor Clayton Christensen has termed the “innovator’s dilemma” and what the Nobel Prize-winning economist Kenneth Arrow described as a monopoly’s disinclination to innovate. IBM was making plenty of profit on punched cards and accounting machines, its customers were happy, so why rock the boat?

Watson Jr.’s intense antipathy toward his father ended up saving IBM. Just before the United States entered World War II, Junior gained self-confidence the old-fashioned way: by joining the Army Air Corps and flying a B-24. When he eventually returned to IBM (pushed to do so by his commanding officer, Maj. Gen. Follett Bradley, who thought Watson would be wasted as an airline pilot), he became the internal champion of transitioning the firm to electronic computing. He was perhaps the only person who could oppose his father in a company built on yes men.

While the book’s title calls him “the greatest capitalist,” it might more accurately, if less ringingly, call him “the greatest manager,” for Watson Jr. was much better at delegating and using his employees’ talents.

For the full review, see:

Tim Wu. “Next-Gen.” The New York Times Book Review (Sunday, December 17, 2023): 9.

(Note: ellipses added.)

(Note: the online version of the review was updated Dec. 15, 2023, and has the title “The Father-Son Struggle That Helped Ensure IBM’s Success.”)

The book under review is:

McElvenny, Ralph Watson, and Marc Wortman. The Greatest Capitalist Who Ever Lived: Tom Watson Jr. and the Epic Story of How IBM Created the Digital Age. New York: PublicAffairs, 2023.

Charlie Munger Had “Epistemic Humility,” Endorsing Confucius’s Claim “That Real Knowledge Is Knowing the Extent of One’s Ignorance”

Epistemic humility is honest and useful, but is often punished. We often admire the confident, whether their confidence is justified or not. But I do not agree with Confucius–we can have real knowledge beyond knowing we are very ignorant.

(p. B1) I had the extraordinary good luck to get to know Charlie Munger in the past two decades.

. . .

More than almost anyone I’ve ever known, Munger also possessed what philosophers call epistemic humility: a profound sense of how little anyone can know and how important it is to open and change your mind.

. . .

(p. B4) Munger—who graduated magna cum laude from Harvard Law School without ever earning a college degree—knew perfectly well how smart he was. And it is an understatement to say he didn’t suffer fools gladly. In an interview with The Wall Street Journal in 2019, he used the phrase “massively stupid” at least seven times to describe other people and even entire professions.

So was he a cocky, cranky old man yelling at the clouds?

No. If there was one thing Munger knew, it was himself. As he told me in 2014, “Confucius said that real knowledge is knowing the extent of one’s ignorance . . . .  Knowing what you don’t know is more useful than being brilliant.”

For the full commentary, see:

Jason Zweig. “THE INTELLIGENT INVESTOR; Charlie Munger’s Reflections on His Life, Luck and Success.” The Wall Street Journal (Saturday, Dec. 2, 2023): B1 & B4.

(Note: ellipses between paragraphs added; ellipsis internal to the penultimate quoted paragraph in original.)

(Note: the online version of the commentary has the date November 29, 2023, and has the title “THE INTELLIGENT INVESTOR; Charlie Munger’s Life Was About Way More Than Money.”)

“Adding Manpower to a Late Software Project Makes It Later”

(p. 24) Dr. Brooks had a wide-ranging career that included creating the computer science department at the University of North Carolina and leading influential research in computer graphics and virtual reality.

But he is best known for being one of the technical leaders of IBM’s 360 computer project in the 1960s.

. . .

Until the 360, each model of computer had its own bespoke hardware design. That required engineers to overhaul their software programs to run on every new machine that was introduced.

But IBM promised to eliminate that costly, repetitive labor with an approach championed by Dr. Brooks, a young engineering star at the company, and a few colleagues. In April 1964, IBM announced the 360 as a family of six compatible computers. Programs written for one 360 model could run on the others, without the need to rewrite software, as customers moved from smaller to larger computers.

. . .

The hard-earned lessons he learned from grappling with the OS/360 software became grist for his book “The Mythical Man-Month: Essays on Software Engineering.” First published in 1975, it became recognized as a quirky classic, selling briskly year after year and routinely cited as gospel by computer scientists.

The tone is witty and self-deprecating, with pithy quotes from Shakespeare and Sophocles and chapter titles like “Ten Pounds in a Five-Pound Sack” and “Hatching a Catastrophe.” There are practical tips along the way. For example: Organize engineers on big software projects into small groups, which Dr. Brooks called “surgical teams.”

The most well known of his principles was what he called Brooks’s law: “Adding manpower to a late software project makes it later.”

Dr. Brooks himself acknowledged that with the “law” he was “oversimplifying outrageously.” But he was exaggerating to make a point: It is often smarter to rethink things, he suggested, than to add more people. And in software engineering, a profession with elements of artistry and creativity, workers are not interchangeable units of labor.

In the internet era, some software developers have suggested that Brooks’s law no longer applies. Large open-source software projects — so named because the underlying “source” code is open for all to see — have armies of internet-connected engineers to spot flaws in code and recommend fixes. Still, even open-source projects are typically governed by a small group of individuals, more surgical team than the wisdom of the crowd.

For the full obituary, see:

Steve Lohr. “Frederick P. Brooks Jr., an Innovator of Computer Design, Dies at 91.” The New York Times, First Section (Sunday, November 27, 2022): 24.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Nov. 25, 2022, and has the title “Frederick P. Brooks Jr., Computer Design Innovator, Dies at 91.”)

The Brooks’s book mentioned above is:

Brooks, Frederick P., Jr. The Mythical Man-Month: Essays on Software Engineering. 2nd ed. Boston, MA: Addison-Wesley, 1995.

P&G CEO Defended Using Harsh Criticism of Workers

Deirdre McCloskey frequently says we should use more “sweet talk.” Edwin Artzt defended using harsh talk. Is there room for both?

(p. A8) Edwin Artzt, who expanded Procter & Gamble Co.’s global reach in the 1980s and then, as chief executive officer in the early 1990s, rattled the company’s managers with cost-cutting drives and harsh criticism of their work, died at the age of 92, the Cincinnati-based company said.

As CEO from 1990 until 1995, Mr. Artzt was known for berating managers and using words including “stupid” and “imbecilic” to describe some of their proposals, as recounted in “Soap Opera: The Inside Story of Procter & Gamble,” a 1993 book by Alecia Swasy, a former Wall Street Journal reporter. He didn’t sugarcoat his desire to eliminate weak brands and underperforming employees.

Mr. Artzt, who died on April 6, was sometimes called “The Prince of Darkness.” Some colleagues said the nickname reflected a hot temper. He said it came from his habit of working late.

“I certainly don’t want to have a short trigger with people and not give them a chance,” he told The Wall Street Journal in 1991. “But sure I’ve cleared out deadwood. Probably some of it was still breathing when it was cleared out.”

Two years later, he said: “Terrifying people is not my intention…People come to me years later and say, ‘Remember that meeting 10 years ago? You laid it on me, but I sure remember that lesson.’”

For the full obituary, see:

James R. Hagerty. “P&G CEO’s Harsh Talk Rattled a Bureaucracy.” The Wall Street Journal (Saturday, April 15, 2023): A10.

(Note: the online version of the obituary was updated April 12, 2023, and has the title “Edwin L. Artzt, P&G CEO Known for His Tough Talk, Dies at 92.”)

The book on Proctor & Gamble mentioned above is:

Swasy, Alecia. Soap Opera: The Inside Story of Proctor & Gamble. New York: Crown Publishing, 1993.

“You Will Do Your Best Creative Work by Yourself”

(p. A12) The value of gathering to swap loosely formed thoughts is highly suspect, despite being a major reason many companies want workers back in offices.

“You do not get your best ideas out of these freewheeling brainstorming sessions,” says Sheena Iyengar, a professor at Columbia Business School. “You will do your best creative work by yourself.”

Iyengar has compiled academic research on idea generation, including a decade of her own interviews with more than a thousand people, into a book called “Think Bigger.” It concludes that group brainstorming is usually a waste of time.

Pitfalls include blabbermouths with mediocre suggestions and introverts with brilliant ones that they keep to themselves.

. . .

Plenty of people have always bemoaned brainstorming. Longtime Wall Street Journal readers may recall a 2006 “Cubicle Culture” column that skewered the popular practice, and Harvard Business Review published a research-based case against the usefulness of brainstorming in 2015.

. . .

Sometimes leaders bring employees together to create the illusion of wide-open input, says Erika Hall, co-founder of Mule Design Studio, a management consulting firm in San Francisco. In-person brainstorming is part of the back-to-office rationale for many of her clients, and she generally advises the ones that truly want to improve collaboration to first carve out some alone time for their workers.

When Hall needs inspiration, she goes for a run.

“It’s freaky,” she says. “I will go run on a problem, and things will happen in my head that do not happen under any other circumstance.”

Others might find “Aha!” moments in the shower or while listening to music. Leaving breakthroughs to private serendipity can feel, to bosses, like losing control, she acknowledges, but it might be more effective than trying to schedule magic in a conference room.

For the full commentary, see:

Callum Borchers. “ON THE CLOCK; Switch Off Brainstorming If You Want Brighter Ideas.” The Wall Street Journal (Thursday, May 18, 2023): A12.

(Note: ellipses added.)

(Note: the online version of the commentary was updated May 18, 2023, and has the title “ON THE CLOCK; Office Brainstorms Are a Waste of Time.”)

The book by Iyengar mentioned above is:

Iyengar, Sheena. Think Bigger: How to Innovate. New York: Columbia Business School Publishing, 2023.