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Books / Audiobooks Ideas Product Management

The Halo Effect by Phil Rosenzweig

Have you ever had a thought that the whole world was crazy? That there was something so painfully obvious that you couldn’t believe everyone was missing? For me, it was the idea that all business books had the same plot:

  1. Let me tell you about this new business theory I have!
  2. I will prove this new theory about business by showing that it applies to great companies like Wal*Mart, Apple, etc.!

I kept wondering why it was only me. Then I came across the book The Halo Effect (with great summary here) by Phil Rosenzweig.

Rosensweig’s key point is that companies only have one independent variable that can be measured — how good it’s doing financially. Companies that are doing well have all these awesome attributes: great leadership, great culture, etc. And companies that are doing poorly have all these horrible features: poor leadership, poor strategy, etc. He uses the example of Cisco:

As an example, when Cisco Systems was growing rapidly, in the late 1990s, it was widely praised by journalists and researchers for its brilliant strategy, masterful management of acquisitions, and superb customer focus. When the tech bubble burst, many of the same observers were quick to make the opposite attributions. Cisco, the journalists and researchers claimed, now had a flawed strategy, haphazard acquisition management, and poor customer relations. On closer examination, Cisco really had not changed much—a decline in its performance led people to see the company differently. Indeed, Cisco staged a remarkable turnaround and today is still one of the leading tech companies.

This isn’t an exercise in analysis or science — it’s an exercise in storytelling. People look at how well the company did and create a story retrospectively to explain it. Rosenzweig quotes Eliot Aronson who says “people are rationalizing beings rather than rational beings.”

But how can these books be so off when they do so much analysis? They talk about going through tens of thousands of pages of financial reports and business press. But maybe this is just theater to make the findings seem more valid than they really are. The less we know about a topic the more we need to dress it up. I remember when I asked a math professor “Why don’t you see very many well-dressed mathematicians?

Math is different from other fields in that you don’t have to prove you’re an authority in math. Your math does it for you. You can solve the problems, they can’t. In English and the Humanities, it’s much more subjective, and so you need some extra way of establishing yourself as an authority figure.

The core problem in analyzing great companies is that there isn’t any good data. Criteria like leadership, customer orientation and culture are subjective. And the financial success of the business leads directly to the contagion of the other metrics.  Rosenzweig says:

The halo effect is especially damaging because it often compromises the quality of data used in research. Indeed, many studies of business performance—as well as some articles that have appeared in journals such as Harvard Business Review and McKinsey Quarterly and in academic business journals—rely on data contaminated by the halo effect. These studies praise themselves for the vast amount of data they have accrued but overlook the fact that if the data aren’t valid, it really doesn’t matter how much was gathered or how sophisticated the analysis appears to be.

The upshot is that business books are telling you stories about great companies and rationalizing the greatness of those companies.  For managers who are looking to improve their companies, these books won’t be helpful. The books are peddling quick fixes and “one size fits all” strategies. But these strategies certainly won’t work for all companies. Managers and leaders need to understand that their role is to be agile and do what’s best in their specific role. They need to look at their company and their environment and determine what strategies will have the best chance of success.

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Fun Stuff

How Numbers Work In The Real World

I really like numbers. I understand that not everyone likes numbers as much as I do and that’s OK. I still like you.

Radiolab did an awesome podcast on Numbers a few years ago. There’s a lot of great stuff in there and it’s accessible even to people that are afraid of math. One of the most interesting bits is how our natural sense of numbers is different from formal math. Come to think of it, that may be why some people have a problem with math.

The core idea is something they refer to as natural counting. We’ve all been conditioned by math classes to think of counting as 1,2,3, etc. However, in the natural state, people act differently. On the show, they told of an experiment with an Amazon tribe where people do not count and don’t have numbers beyond five. They showed the tribesmen a line. On one side they placed 1 object and on the other side, they placed 9 objects. The experimenter asked, “What number is exactly between 1 and 9?” The response was “3.” The reasoning works like this:

  1. First person has 1 stick
  2. Middle person has 3 sticks (3 times as many as the first person)
  3. Last person has 9 sticks (3 times as many as the second person

So the second — the one in the middle has 3 sticks.

Let’s look at another example. Imagine you’re giving out bonuses at work and you have a pool of $500,000 and you want to fairly distribute the pool. You could give everyone the same amount of money. But what if someone made $1 million and 4 people made $100,000. You could give everyone $100,000 as a bonus. But that doesn’t feel fair. To be fair you’d give everyone about the same percentage of their salary as a bonus — which in this case would be about a 36% bonus for everyone.

Another non-intuitive concept on Radiolab is Benford’s law.  Benford’s law says that in the real world, you’ll see the number 1 appear many times more as the first digit than the number 9. This happens for naturally occurring phenomena like money in your bank account, size of countries or views on YouTube.

Radiolab has a great story on how this is used in the real world. Say someone was trying to commit a fraud on tax returns. They would be trying to create “random” numbers by having the first digit of each number evenly distributed (equal numbers of 1,2,3, etc.) But Benford’s law says that you should have more 1’s as the first digit than 9’s. So if numbers end up looking more random than they would be in the real world, that’s a sure sign of fraud.

So why does this happen? For the same reason that we saw above, things like to grow by percentages rather than units. Think about the bonus example. Say things are growing by 10%. If you start with the number 1 the next numbers are 1.1, 1.21, 1.33. 1.46, 1.61, 1.77, 1.94. That’s 8 numbers that start with a 1. For 9, you have 9 and 9.9 so that’s only 2 numbers that start with a 9 (and then you’re back to another number that starts with a 1).

For a more detailed explanation of Benford’s law including a pretty technical mathematical explanation, check out Singing Banana.

So why is this important? Even though we think about the world in 1, 2, 3’s, it’s actually more about the changes from where we are now. It’s 10%, another 10%, another 10%, etc. By understanding the world in these terms it’s more intuitive and more useful.

Categories
Kids

Winter Exercise — Stair War and Stair Chemistry Fluxx

We live in a 30 story building. In the summer the kids can run and play outside but in the winter they need to get their exercise inside the building.

So we started to climb the stairs inside our building. The building is 30 floors high so getting to the top is a nice workout. When Blake was about 3, he would climb to the top of the building with excitement. We even started learning numbers. We learned that there is no number 13 in our building — or is there? But as the boys got older they want to do something more exciting so we created a game called “stair war.”

The rules for stair war are the same as the card game of war but every time there’s a war you go up that number of flights of stairs. This makes climbing the stairs a bit more interesting. The game has a number of interesting properties:

  1. Each time there’s a war you go up on average 7 flights assuming you go up ten flights for J, Q, K, A
  2. One out of every 13 plays, on overage, is a war. There are 169 ways that cards can lay between hands 13 x 13. But only 13 of them are wars.
  3. On average that’s about half a flight on average for each card flipped you go up 7 flights every 13 plays.
  4. But there’s a lot of uncertainty which adds to the excitement. You don’t know when the war is going to happen!

Blake is 8 now so we can play more interesting games. Our new favorite is now Chemistry Fluxx (sample game) on the stairs. We play a game of Chemistry Fluxx and then go up 10 flights of stairs — repeat until exhausted. Chemistry Fluxx is part of the Fluxx series, a card game where the rules and goals of the game are always in “Fluxx.” Watch the sample game and you’ll get a good idea of how it works. We speed up the game by changing the initial rules to something to draw 2 / play 2 to speed things up. Also, Chemistry Fluxx teaches them a few chemistry facts while you play!

Categories
Kids

The Hidden Thirteenth Floor

In my apartment building, like many others, there’s no 13th floor. The floors go right from 12 to 14.

Categories
Fun Stuff

Exploring Towers

I’ve always loved going to the tops of towers. When I was at Yale we used to climb up on towers and look across the campus. This was before every door was locked.

Freshman year, my friends Lutz and Christine joined me in a quest to figure out what was at the top of the library. If you look at the top of Yale’s Sterling Memorial Library, you can see something that looks like a tiny castle (you can see it if you zoom in on the roof). We spent a few afternoons trying to figure out what this secret castle was. As it turns out, it’s actually a castle! When the library was built, they thought it would be a nice way to hide the machinery on the roof. In the age of Facebook, we can actually see what the castle looks like:

Sterling Castle

More recently, when I’m up at SchoolPlus for the boys to take their Math and Science class, I found another tower. This is the view from the south tower at the Union Theological Seminary.

It’s a wonderful place for me to sit and do some writing.

Today the building is under construction. As I looked out upon the garden I couldn’t help but think that this is what Rapunzel must have felt like.

Categories
Kids

Decorating Your Home With Magnets

I’ve always been very envious of artists that decorate their spaces. I remember visiting Industrial Light and Magic and seeing all the different statues that were on top of peoples desks. In The Last Lecture, Randy Pausch shows how he painted his childhood bedroom — even including painting an elevator on the wall. It used to make me sad that I would never be able to decorate the walls like that and really make it my own. But then I discovered a solution … magnets!

Originally I thought it would be really cool to use magnetic paint on the wall. But then I learned that magnetic paint is good for putting flexible magnetic images on the wall, but not for hanging anything up. So I thought, “How can I make my house into a magnetic bulletin board?” Then I realized how much of my house is made of metal.

The radiator is made of metal…

… as is the front door is made of metal which is a collection of pictures and maps …

Note at the top of the door is some remnants of our sign from the women’s march including Blake’s wonderful artwork of Donald Trump in the middle of the “O.”

Our window frames are made of metal…

… as are the many of the joints where the joints in the wall where the drywall comes together…

… so we can post awards right at wall corners…

… and school assignments.

On the fridge we built some really cool things using  Magnaformers. We also use them to build some cool Platonic solids, Archimedean solids and Johnson solids (not pictured).

We use little superstrong neodymium magnets with clips to make sure that things stick.

 

Categories
Product Management

Product Management at AIG

This year I’ve moved from Citi to AIG. I’m a Product Manager doing Agile Development. Some definitions:

  • Product Manager: Product Managers are the owners of products, setting the goals of products and ensuring they are met. We manage the product, not the people (i.e., the coders).  It’s common for the business to need one thing and technology to deliver something else. The product manager is there to ensure that the technology team effectively meets the needs of the business. For a non-technology example of miscommunication of business needs take a look at this cake or this one
  • Agile Development: People used to think that you should build software like you build a building. You make detailed plans and then take years to build it. However, we’ve realized over the years that we can solve most key business problems without building the whole software project — we just build the parts that matter. Also, people can start using the software before it’s done — which lets us revise the plans on a regular basis as we see how it’s used

Some resources:

 

Categories
Building Design Fun Stuff Life Lessons

My Personal Contact Cards

About a year ago I made my own business cards. I wanted to have a personal expression of who I was rather than just me as an agent of a company. I wanted to make something I was proud of and made this:

It’s based on an Apple Store recruitment card which reads “Your customer service just now was exceptional. I work for the Apple Store and you’re exactly the kind of person we’d like to talk to. If you’re happy where you are, I’d never ask you to leave. But if you’re thinking about a change, give me a call. This could be the start of something great.”

Categories
Life Lessons

Free Speech — A View From Yale (From 2017)

This a post I wrote in 2017. I figured I’d publish it now given the unrest on campus.

In the last few years, there’s been an increasingly polarizing discussion around freedom of speech and values in the US — especially on college campuses. It reminded me that in contrast to the he said / she said of political debate, Yale took a much more thoughtful view on the topic starting 4 decades ago.

Yale’s President Peter Salovey referenced these two issues in his freshman addresses of 2014: On Freedom of Expression at Yale and 2015: On Calhoun College. As the debate on these subjects get’s less and less civil, I thought it would be good to take the long view here.

Categories
Books / Audiobooks Kids

Dr. Seuss Books Read by Celebrities

Audible has a large number of Dr. Seuss Books read by Celebrities. Here’s a sampling.

Green Eggs and Ham and Other Servings of Dr. Seuss which includes my favorite — One Fish Two Fish read by David Hyde Pierce

  • “Green Eggs and Ham” read by Jason Alexander
  • “One Fish, Two Fish, Red Fish, Blue Fish” read by David Hyde Pierce
  • “Oh the Thinks You Can Think!” read by Michael McKean
  • “I’m Not Going to Get Up Today” read by Jason Alexander
  • “Oh Say Can You Say?” read by Michael McKean
  • “Fox in Socks” read by David Hyde Pierce
  • “I Can Read With My Eyes Shut” read by Michael McKean
  • “Hop on Pop” read by David Hyde Pierce
  • “Dr. Seuss’s ABC” read by Jason Alexander

The Cat in the Hat and Other Dr. Seuss Favorites

  • The Cat in the Hat read by Kelsey Grammer
  • Horton Hears a Who read by Dustin Hoffman
  • How the Grinch Stole Christmas read by Walter Matthau
  • Did I Ever Tell You How Lucky You Are? read by John Cleese
  • The Lorax read by Ted Danson
  • Yertle the Turtle, Gertrude McFuzz, and The Big Brag read by John Lithgow
  • Thidwick, the Big-Hearted Moose read by Mercedes McCambridge
  • Horton Hatches the Egg read by Billy Crystal
  • The Cat in the Hat Comes Back read by Kelsey Grammer