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« March 2011 | Main | May 2011 »

Why you might choose to be in favor of transparency

Thousands of doctors have signed up for a service that, among other things, they can use to try to prohibit patients from posting reviews. You can read a bit about it here.

In Iowa, in a surprisingly similar move, the state government is moving ahead with a law that will make it a crime to take or possess videotapes of factory farming that might harm the commercial interests of the farmer.

In both cases, an organization is trying to maintain power by hiding information from the public. Can you imagine being arrested for possession of a photo of a pig?

It's easy to argue that from the public's point of view, laws like this are a bad idea. The public certainly benefits from the outing of bad doctors and from the improved hygeine of factory farms. In that sense, it's unethical for doctors and legislators to subvert their responsibilities by ordering the unempowered to shut up.

I think it's interesting to think about from the doc's point of view (and the chicken farmer), as well. The temptation is for those in charge to defend the status quo by fighting transparency. This ignores a simple truth:

When book reviews are posted, book sales go up.

Yes, the argument of fairness matters. The patients have no choice, the chickens certainly have no choice and the consumers don't have much choice either. There's an argument that goes beyond choice, though... it turns out that transparency increases profitability.

If every chicken coop has a video camera in it, quality will obviously go up. Confidence in the product will go up. Employee behavior will improve as well, because it's hard to torture a chicken if you know you're going to get caught.

But wait, you might argue... if we have to take better care of the chickens, our costs will go up as well.

Here's the thing: when consumers get used to transparency, they're also more interested in the quality of what you sell, and are more likely to willingly pay extra. They'll certainly cross the street to buy from an ethical provider. And once people start moving in that direction, the cost of being an unethical provider gets so high that you either change your ways or fade away.

Chicken farms don't need a law prohibiting possession of images. They need a producer who will make a ton of great (true) chicken movies. Inundate us with images of cleanliness and quality instead of blacking us out. Don't race to the bottom (you might win). Instead, force your competition to race you to the top instead.

[Aside: the same objection happened when we started regulating hygeine in restaurant kitchens. Yes, it got more expensive to clean the pots and kill the rodents, but it was okay, because post-Duncan Hines, demand for quality went up enough to more than pay for it.]

The same argument holds true for doctors. Once information about good doctors becomes widespread, patients will be more willing to seek out those doctors, rewarding the ones who consistently take better care of their patients. The entire profession doesn't suffer (we'll still go to a doctor) merely the careless doctors will.

One more: A leading politician in India is arguing that bribery (in certain transactions) ought to be legalized. Why? Because if the briber feels free to rat out the bureaucrat, bribery goes down.

In all three cases, sunlight is an antiseptic and the marketplace rewards those that behave--and the entire market grows when the standards increase.

Consumers and those that want their admiration ought to reward those in favor of transparency (what a great opportunity for McDonald's). And the antidote for speech a provider doesn't like isn't a contract or a law. The antidote to speech you don't like is more speech.

Turning the habit of self-criticism upside down

Perhaps this sounds familiar:

When it's time to write a resume or talk to a boss or discuss a project glitch with colleagues, the instinct is to spin, to avoid a little responsibility, to sit quietly. Put a best face forward, don't set yourself up.

When reviewing just about anything you've done with yourself (in your head), the instinct is to be brutal, relentlessly critical and filled with doubt and self-blame.

What if they were reversed?

What if the habit of the project review meeting was for each person to put their worst foot forward, to identify every item that they learned from? What if we took responsibility as a way of getting more authority next time?

And the flip side--when talking to ourselves, what if we were a little more supportive?

It's not an easy habit, but it works.

In search of a biz monkey (why bother?)

Andrew Chen coins a great term. A biz monkey is a replaceable, Powerpoint toting, suit wearing, acronym-spewing middle manager business dude drone. They are quick to comment and sneer, slow to actually ship.

When something is scarce, it's valuable. MBA's with buzzwords and the ability to raise a million dollars around some web idea are not scarce. They are fungible.

People who understand technology and are willing to bend it to their will, on the other hand, are scarce. They can't be found with a classified ad on Craigslist or in a blind project ad on eLance.

The job of the smart business person isn't to fish in waters where coders are cheap. It's to have enough initiative and vision that the best coders in the world will realize that they'll do better with you than without you.

Business people add value when they make things happen, not when they seek to hire cheap.

Wasting the digital dividend

The internet means that many time-consuming forms of white-collar drudgery have disappeared, or at least been offloaded to cheaper people who aren't you, permitting you to spend more time on things that are actually productive and highly leveraged.

No more standing in line at the copier, trudging to the Fedex box, waiting two weeks for a letter to be returned, leaving voice mails, searching for the right person to contact, waiting months to learn a skill or a fact, discovering that a project is hopelessly broken, and on and on.

It's a little like the bump we got after the Cold War ended. The peace dividend was there, just waiting for us to repurpose our military, our military budget and our military research. We didn't. We squandered the window, wasted the money and didn't rush to fill it with the sort of top-down industrial projects (like high speed rail and efficient new forms of energy) that could have changed everything.

So, what are you going to do with the digital dividend? Cruise Facebook?

How to fail

There are some significant misunderstandings about failure. A common one, similar to one we seem to have about death, is that if you don't plan for it, it won't happen.

All of us fail. Successful people fail often, and, worth noting, learn more from that failure than everyone else.

Two habits that don't help:

  • Getting good at avoiding blame and casting doubt
  • Not signing up for visible and important projects

While it may seem like these two choices increase your chances for survival or even promotion, in fact they merely insulate you from worthwhile failures.

I think it's worth noting that my definition of failure does not include being unlucky enough to be involved in a project where random external events kept you from succeeding. That's the cost of showing up, not the definition of failure.

Identifying these random events, of course, is part of the art of doing ever better. Many of the things we'd like to blame as being out of our control are in fact avoidable or can be planned around.

Here are six random ideas that will help you fail better, more often and with an inevitably positive upside:

  1. Whenever possible, take on specific projects.
  2. Make detailed promises about what success looks like and when it will occur.
  3. Engage others in your projects. If you fail, they should be involved and know that they will fail with you.
  4. Be really clear about what the true risks are. Ignore the vivid, unlikely and ultimately non-fatal risks that take so much of our focus away.
  5. Concentrate your energy and will on the elements of the project that you have influence on, ignore external events that you can't avoid or change.
  6. When you fail (and you will) be clear about it, call it by name and outline specifically what you learned so you won't make the same mistake twice. People who blame others for failure will never be good at failing, because they've never done it.

If that list frightened you, you might be getting to the nub of the matter. If that list feels like the sort of thing you'd like your freelancers, employees or even bosses to adopt, then perhaps it's resonating as a plan going forward for you.

The free market

Companies that operate in a free market generally work as hard as they can to make that market not free.

By creating lock in, monopolies, patent protection, long term contracts, chasms in pricing and other barriers to entry, companies profit out of proportion to their risk or investment. That's their job.

Acting on their own behalf, self-interested companies will almost always work to make the playing field unlevel, to create loopholes and to generate barriers that keep the market unfree. It's what their owners profit from.

Their adversaries? Technological change, enforced transparency and regulation in favor of consumer protection and against monopolies. There's no question that an unfettered authoritarian corporate regime is more efficient and effective--in the short run. In the long run, though, the free market triumphs, as long as it isn't destroyed by those that get to play first.

The free market is a great idea, which is why we need to be careful when market incumbents lobby to make it un-free.

Why makers should think a little bit more like managers (and vice versa)

Paul Graham, as usual, is thought provoking.

There's no question that programmers, designers, writers and others that do their best work in a moment of flow do themselves and their organizations a disservice when they are ruled by the clock and spend a lot of it in meetings.

Paul's argument is that makers should be insulated from this sort of wasteful nonsense.

The essay is one of his best ever, but I think he needs to add a key point...

Managers need to act more like makers, because making is more important than ever before. Even the most Outlook-driven manager can benefit from finding the isolation to do truly challenging work.

Makers need to be disciplined enough to interact like managers, else they will become pawns in a system they don't sufficiently influence. If you're not present when decisions are getting made, my guess is that you won't like what gets decided...

Neither side gets to insist on just one way. Both need to do more of the other's work. Not because it's easy or even fun, but because it's still the best way to bring your vision to the world.

Insist on the coin flip

Very often, we’re challenged to make decisions with too little information. Sometimes, there’s no information--merely noise. The question is: how will you decide?

Consider the challenge we faced when setting the pricing for a brand of software we were launching in 1986. It was the biggest project to date of my short career... more than a year of work by forty people. Should these games cost $29, $34 or $39 each? My bosses and I had one day to finalize our decision for the salesforce.

Unlike Harvard case studies, we had no graphs, no history, no data. We were the first in the category and there was just nothing significant to go on. The meeting was held late on a Thursday. In addition to my newly minted Stanford MBA, we also had two from Harvard, one from Tuck and another I think from Wharton in the room.

We talked for an hour and then did the only intelligent thing--we flipped a coin. To be sure we had it right, we double checked and flipped two out of three. The only mistake we made was wasting an hour pontificating and arguing before we flipped.

This is also the way we should settle closely contested elections. We know the error rate for counting ballots is some percentage--say it’s .01%. Whenever the margin is less than the error rate, we should flip. Not waste months and millions in court, we should insist on the flip. Anything else is a waste of time and money.

Or consider the dilemma of the lucky high school student with five colleges to choose from. UVM or Oberlin or Bowdoin or Wesleyan or who knows what famous schools. Once you’ve narrowed it down and all you’re left with is a hunch, once there are no data points to give you a rational way to pick, stop worrying. Stop analyzing. Don’t waste $4,000 and a month of anxiety visiting the schools again. The data you’ll collect (one lucky meeting, one good day of weather) is just not relevant to making an intelligent decision. Any non-fact based research is designed to help you feel better about your decision, not to help you make a more effective decision.

One last example: if you know from experience that checking job references in your industry gives you basically random results (some people exaggerate, some lie out of spite), then why are you checking?

When there isn’t enough data, when there can’t be enough data, insist on the flip.

By refusing to lie to yourself, by not telling yourself a fable to make the decision easier, you'll understand quite clearly when you're winging it.

Once you embrace this idea, it’s a lot easier not to second guess your decisions--and if you're applying to college, you’ll free up enough time to write a novel before you even matriculate.

Limited (and unlimited)

Two deadlines today:

Eight tickets left for the upcoming April 11 full day event in NYC.

A few hours to buy the five-pack of Poke the Box at a big discount. (Not many left, it seems).

It fascinates me that books are generally unlimited. A popular book never goes out of print. An unpopular ebook never goes out of print either. They are here today and they will be here tomorrow.

It's funny how a scarcity of availability and a ticking clock changes our perspective and the desire to take action.

Perfect vs. interesting

There are two jobs available to most of us:

You can be the person or the organization that's perfect. The one that always ships on time, without typos, that delivers flawlessly and dots every i. You can be the hosting company or the doctor that might be boring, but is always right.

Or you can be the person or the organization that's interesting. The thing about being interesting, making a ruckus, creating remarkable products and being magnetic is that you only have to be that way once in a while. No one is expected to be interesting all the time.

Fedex vs. Playwrights Horizons.

When an interesting person is momentarily not-interesting, I wait patiently. When a perfect organization, the boring one that's constantly using its policies to dumb things down, is imperfect, I get annoyed. Because perfect has to be perfect all the time.

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