PegaSoft Canada White Paper
Draft - 2003
By Ken O. Burtch
Fred J. Karner was a wealthy CFO and my next-door neighbour. Fred was an example of the ideal business professional. Fred made his reputation as a turn-around man, hired by struggling companies where he would slash the workforce to generate short-term profit. He would then move on to a new company while his former employer collapsed due to a lack of personnel.
Fred depended on mendacity for his success. Like a “destroying angel”, a mushroom that appears harmless but is in reality a deadly poison, Fred’s strategy was to appear harmless. Clean-cut and amiable, human resources department would hire Fred with a minimum of inspection. Once hired, wanting to protect their job lead company leaders to lose them when their company died under Fred's mismanagement. Unrealistic expectations, promises and cover-ups are the norm when job security is at stake. Contemporary business practices lack the fail-safes to protect against “destroying angels” like Fred.
In the same way, Fred was the head of finance for his Catholic church-despite the fact that he didn't even believe in God. Who would hire an atheist to oversee your church's coffers? Yet a church is an organization designed to protect its members from people like Fred also managed to miss the danger signals-or ignored them.
Not everybody has turned a blind eye to Fred. He is currently a fugitive wanted by the Royal Canadian Mounted Police.
This lead one study to categorize companies as cover-ups, ostriches or deaf-dumb-blind. [ACM, expand]
I’ve met many destroying angels in Canadian businesses. Most people knew they were in trouble, but chose to ignore the danger signs.
Destroying angels have always been a threat to organizations. Some believe that North American culture has contributed a larger than normal number of destroying angels and that the traditional safeguards that protect companies against them are no longer in place.
Researcher Robert Wright describes the post World War II generation as the first North American generation that exploited both their parents and their children in the pursuit of material gain. With Depression-era parents and the economic boom period of the mid-1900s, the so-called Baby Boomer generation fought to build a good life for themselves. Their parents contributed over 1 trillion dollars to the Boomer generation in order to see them to success. In exchange, the Boomers held onto not only their wealth but also their parents’ wealth as well to live in self-sufficient retirement. As a result, Boomers took the highest paying and most secure jobs while exiling North American youth to poor jobs with no future. The post-Boomer generation is left with a 50% unemployment rate, high cases of suicide, large educational debts and steadily decreasing purchasing power.
Wright describes the Boomer generation as liberal and domineering, challenging the status quo, and doing so with a lack of conscientiousness towards others. Although individuals vary, studies suggest that the Boomer generation as an aggregate group are obsessed with money and don’t consider the damage they cause in their pursuit of it. That is, there is a higher probability of destroying angels in this age group.
During the prosperous post-Vietnam years, the economic success of North America caused a larger than normal number of destroying angels to advance in large corporations. Their victims had better chance of recovering due to the prosperity of that era. However, in the economic slowdown of the Reagan years and beyond, these angels were now entrenched in high positions and busy defending their jobs in the wake of layoffs. Although this is speculation, Wright quoted studies that suggest that people porn after 1965 tend to be “downwardly mobile”, wanting a quality of life promised by their parents but unable to achieve it. Over half of the post-Boomer generation lives with their parents, moving between low-paying contract jobs in order to survive, unable to start families or live independently.
Although destroying angels are always a threat, economic and social factors have worked to promote destroying angels into high-ranking positions in North American companies.
In Hong Kong, a popular saying is, "The exposed nail is hammered down." The sentiment echoed in Bhudda's enlightenment: you can't win, so don't try. So go with the flow and don't make waves. If there is a problem, let some other sucker deal with it. It’s as Canadian as hockey and ice fishing.
The new religion of "Corporate Sainthood" reflects the humanist lessons painted on Star Trek. In his authorized biography, Gene Roddenberry made this observation on honesty: "As long as the inner person believes and admits that decency is good, the outer person who has to deal with the world, and not always a fair world, is allowed to slip." For example, if you see a black man being beaten by a white, don't get involved: you'll only get hurt. It's enough to know that a crime is being committed. His Prime Directive was simply a method of keeping Star Fleet from getting its hands dirty.
The Bre-X mentality turns promising futures into houses of cards. It’s naïve to think that there are no Destroying Angels out there looking to fleece your efforts for his own gain. Like a high school bully, if no one deals with a Fred Karner, he will win and the company will lose.
In a Wired magazine article on “superrust”, the corrosion of supertankers is a “hot potato”. Companies, knowing their fleet hasn’t received proper rust maintenance, sell of their ships every few years so that some other “sucker” will be the unlucky holder of the ship that causes an environmental catastrophe.
A neo-Prime Directive has its grip on many corporate cultures. Businesses don't feel that they need to take a hand in forging a brave new future. The current economic and social successes were achieved by the previous generation. The current generation feels that success is just their right as North Americans. Like the grasshopper and the ants, they feel that “the world owes them a living.” Even children know this is not true. Meanwhile former third world countries (the ants) ramp up their education and production facilities through American investment, working for a brighter future than they currently have. As they say in business, if you aren't growing, you're out of business. A failure to do long-term planning is a slow death, as inevitable as the fall of Rome.
When everything in a company is somebody else’s problem, the company is moving forward on inertia. When that inertia fails, so will the company. Individuals must take responsibility for their actions because those affections affect everyone. There must be accountability in a company so that those responsibilities are identified and carried out.
"Find out just what any people will quietly submit to and you have the exact measure of the injustice and wrong which will be imposed on them." Fredrick Douglass [BR15, pg.311]
Somebody else’s problem becomes your problem, sooner or later.
Grandpa believed that stealing was smart. My father left $100 on the kitchen counter and Grandpa took $40 to teach him a lesson. He was a known shoplifter who was banned from stores. Dad accidentally took something without paying and when he returned it the storeowner said, "I knew you took it but I wanted to see if you were like your father."
"The attempt to avoid legitimate suffering lies at the root of all emotional illness." [Peck, pg. 133] Searching for shortcuts, refusing to take the time needed for tough necessary jobs, cutting out problems instead of repairing them aren't just signs of a lazy or busy manager--they indicate the manager is mentally unfit to do his job and needs psychological treatment.
When we are children, we are told growing up that we can become anything that we want to be, have any occupation. But a man has very little control over his job or fortunes. The idea that we are masters of our destiny is a lie left by the baby boomers. We are told we can change the world but can only affect our immediate surroundings. Solomon said that the "race is not to the swift." Our occupation and success, whether a tech startup or "safe" career, are largely products of forces that we cannot control. It doesn't mean that our choices and aspirations are not important, just that they are one small part of the equation.
Destroying angels often believe that they are master's of their own destinies. They are constantly formulating schemes and strategies. If being good doesn't guarantee success, then being evil must is their logic. Their obsession doesn't guarantee their success, but they blame outsiders for their failures and themselves for their victories. They are unable to see the futility of their schemes because of their mendacity.
Suppose you are a expert who can predict business trends with 75% of being right. If you try to predict two trends, the odds of you being successful is 75%*75% or about 56%, barely better than flipping a coin.
Don't go for the quick buck. Don't let your resources lie fallow because you hoping for a better deal to come along. Don't alienate potential partners in the hopes that someone bigger will come along. There is a joke about the woman trapped on the roof of her house by a flooded river. She prays to God to rescue her. A canoe drifts by and they offer to help, but she turns it down. Another canoe floats by and they offer to help, and she turns it down. A helicopter flies overhead and they drop down a ladder, but she turns it down. Finally the waters rise so high that she is swept into the river and drowns. In heaven, she asks God why he did not save her. God replies, "I sent you two canoes and a helicopter. What more do you want?" Don't be so arrogant that you turn down the little opportunities. It is better than no opportunities and who can predict whether or not they will lead to better things? Investing in anything is better than investing in nothing because opportunities do not arise in a vacuum. When a man's job is terminated, shouldn't the company mail his wife and children their condolences for the hardship that they will endure? The armed forces' commanding officers must write letters for those casualties of combat. Losing ones job is a similar catastrophe for a family.
One of the most common arguments for mendacity, political correctness and wrongdoing is that “everybody else is doing it”. If the average North American company is successful by doing wrong, then doing wrong must be the right way to do business.
I’ve heard people say that a company needs a great marketing campaign so that it can sell it’s poor quality products to an unsuspecting public. If good marking can sell bad products, does that mean that bad marketing can’t sell good products? How much better would it be if good marketing people can promote good products, generating repeat business?
A better statement is “if everybody’s doing it and it’s costing them so much, how to they stay in business?” It appears that wrongdoers are successful because of the 127 rule. This has to do with the larger number of bad guys, not their skills to be successful: there are simply twice as many companies being run by corrupt people as those being run by honest business men. This is just basic human nature.
Mendacity has a cost. If your company is being run by destroying angels, there are expenses hidden expenses associated with their presence. Corruption costs money.
Sometimes action is a subtle form of laziness, a way of covering up the right actions with wrong ones.
If action can’t solve problems, maybe inaction is the answer. After all, doesn’t the old saying go, “Time heals all wounds.”
According to Scott Peck, "A great general, commander of an army, once told me, ‘The single greatest problem in this army, or I guess any organization, is that most of the executives will sit looking at problems in their units, staring them right in the face, doing nothing, as if these problems will go away if they sit there long enough.’ The general...was talking about other generals and senior colonels, mature men of proven capability and trained in discipline." [Peck, 31]
There is no such thing as a problem that will just go away. If problems went away, they wouldn’t be problems.
If your company is being eaten alive by destroying angels, why would suddenly decide to leave? Why would you expect a destroying angel to suddenly turn into a real angel with a halo? This is wishful thinking. Destroying angels need a reason to leave and that means the company must take action before there is no company left.
“Organizations [need] to accept and even welcome challenges to their maps of reality and modi operandi if they are to grow in wisdom and effectiveness.” [Peck, p. 53]
I have never heard anybody say anything good about a cover-up, but people involved in cover-ups often believe they are doing the practical thing. A cover-up occurs when a person hopes that the problem will just go away. Scott Peck was once hired to deal with the problems caused by a U.S. military cover-up. His results, of course, were also covered up.
Cover-ups are always more expensive in the long run than admitting a problem up front. If a problem is admitted, then steps can be taken to solve it. A cover-up is simply a fantasy would where the company pretends the problem doesn’t exist. The problem, and its associated costs, continue to fester and increase.
Employee mendacity results in distrust. If truth is called in question, all communication, promises and rules become breakable and, therefore, suspect. Social ties and work relationships can only function properly if they are believed to be reliable.
Distrust is one of the biggest wastes of resources in a company. When people believe they are being lied to, the essential tools that allow an employee to do their job are broken. The time and resources needed to complete a job increase because every task requires a backup plan in case the fundamental facts are wrong. In the worst case, an employee wanting those who are untrustworthy to feel his frustration by being untrustworthy in return, causing a degenerating spiral.
For example, out of distrust, one company I worked for isolated the superuser privileges on all their computers to a single small set of administrative staff. The administrative staff, unfortunately, wasn’t skilled at administration. Programmers with better understanding of the technology installed secret back doors and made use of other security loopholes just so they could get their jobs done. The isolation policy weakened the overall security of the company.
Good ideas cannot survive if shot by the mendacity of underlings. I knew a CIO who believed in breaking down the walls between departments and held regular chat meetings with IT personnel. After I attended one, I was called into the office of a vice president who said that I was to ignore all that foolishness.
Distrust breaks down the decision making process, leaving a company unable to advance or change. Committees or boards of directors will be frozen by filibusters or railroaded by a vocal minority. Often those who are distrustful or afraid will have the loudest voices since they are acting out of an instinct for self-preservation. They will complain about any new action or question everything for their own political agendas. By doing so, legitimate concerns and wise insights are lost.
Such companies cannot function effectively for the same reason you cannot play the piano with distrust. When learning a new song, you must check the keyboard constantly. At some point, you have to take risk and let your eyes leave the keyboard. It may be that the song will require your left hand to jump down an octave. But you can't continue to count the keys with your eyes. You'll have to have faith that your left pinky will land on the proper key at the right time.
Passing a problem off to someone else doesn’t restore trust.
Legalism doesn’t invoke trust. Procedures are emphasized over the bad intentions of staff, the “letter of the law” being raised over the “spirit of the law”. This is a Catch-22: with more rules, there are more levels of bureaucracy and waste. In the end, it’s the old Roman proverb: “who watches the watchmen”? Legalism is, in fact, an attempt to run away from the problem.
Try to hold onto trust and it slips through your hands like water. Churches are subject to what is known as the "200 limit": churches are often billed as a “family” and such churches have a problem growing beyond 200 people. Some businesses also try this approach and run into the same wall. Any business or church that's being run "as a family" is, in fact, run as with a clique trying to have absolute power over the welfare of the people. Making people feel bad or forcibly ejecting people who disagree with you creates the illusion of agreement and solidarity, but it is only an illusion. A business like this can never grow beyond 200 people because, in order to do so, the clique would have to give up the illusion of a family as well as the dictatorship that goes along with it.
No matter how good their skills, hiring people with a mendacity-based lifestyle will undermine trust and cancel out any benefits the company would have otherwise achieved.
The only workable solution to removing distrust and the problems associated with it is to fight the mendacity that undermined it in the first place. Otherwise, things will revert to their natural state: a state where truth is despised and the bullies have all the power.
Turning a blind eye doesn’t make distrust go away. I discussed why in the previous section.
Management is the act of dealing with the needs of a group of people. A manager is an agent (or servant) of the group. He or she is an arbitrator, a gofer, and an organizer.
When mendacity occurs in management, it empowers the criminals and damages a large portion of the company. Managers can promote mendacity and prevent communication in order to defeat healing.
A manager's chief concern is the intangible goals and relationships of the people he serves. Always set aside time each day to do uninterrupted thinking on the intangibles. Don't be deceived that the papers on your desk represent your top priority. Sculley set aside an hour each day to make rounds on the development floor at Apple. A manager's job is not defined by the paper that crosses his desk.
Wisdom is not usually a quality chosen for managers. It is possible to be inexperienced and wise, and old and foolish. People like to be surrounded by "yes men", but managers are supposed to be the ones to see through the yes men. If all managers did was report the obvious, there would be no need for them.
A manager is not usually a leader.
Like any job, a manager must have the proper skills to be a manager. Promoting someone to a management position makes no logical sense, but companies do this all the time. Making someone who is unable or unwilling to serve a manager is mendacity, a false worldview. It will destroy your company and your job.
If someone lacks basic understanding, he can be tempted to steal ideas that he doesn't understand from others, not giving credit or he can be tempted to lead through force to hide his incompetence. When managers can’t manage effectively, fear and mendacity become their tools of self-preservation.
But if managers are the agents of a group, how can they perform their jobs where they are isolated and are unable to communicate effectively with their group? DeMarco suggests that as much as 80% of a manager's time can reasonably spent on the needs of his team [Slack, p.23], but at my last job weeks could go by without communicating with the manager communicating with the team. That’s because managers were a “retired” position: a place where a person is put when they pull in enough favours, effectively eliminating them from the workflow of the organization. Teams are effectively left without managers or have managers who have no incentive to manage.
When a manager is obsessed by fear, one of the results is there is a reluctance by his group to tell him “no”. Telling a manager "no" is necessary for a proper functioning group. [ACM pg.18] Ironically, I’ve met managers who admittedly lied to their boss, completely unaware that they people under them were lying to them in just the same way. No tolerating questions or objects will lead to atmosphere of denial.
Ambition is often a sign of a person who is trapped in childhood and has never learned to be an adult. Peck cites a case of a businessman who looked "back on a life of frantic ambition to constantly make more money and rise ever higher in the corporate hierarchy and find it meaningless. After long reflection he realizes that he has been driven by a need for approval from a domineering, constantly critical mother; he has almost worked himself to death so as to be finally successful in her eyes. [Peck, p.138] Ask an ambitious person why success is important, and they can't give a good answer, you may be taking to an 8-year-old trapped in a 45-year-old body. Do you want an 8-year-old manager on your team?
Managers should trust their people to make decisions on their own, but verify the decisions results. In most North American companies, the manager makes the decision for his people and then never checks what happens. There is a lack of accountability that is fine if managers are capable and qualified, or disastrous when they are not. As managers are a token position in many companies, there is never any follow-up on their performance, except by shallow evaluations.
The only way to defeat mendacity is from the top down. Hire honest people. Set an example of honesty. Be on guard for treachery. Stomp out corruption when it occurs. If you are Elliot Ness, Al Capone won't be able to get a foothold in your company.
"Narcissistic individuals are actually unable to perceive their children, spouses or friends as being separate from themselves on an emotional level...Since they do not perceive others as others but only as extensions of themselves, narcissistic individuals lack the capacity for empathy, which is the capacity to feel what another(italic) is feeling." [Peck,pg. 161,163] Compare Phil Wallace and we all believe the same thing. Also, mangers who are oblivious to the people under them.
"The difficulty that humans so generally seem to have in fully appreciating the separateness of those who they are close to interferes not only with their parenting but with all their intimate relationships, including marriage. Not too long ago in a couples group I heard one og the members state that the "purpose and function" of his wife was to keep their house neat and him well fed...To my horror the six others, male and female alike, gave very similar answers. All of them defined the purpose and function of their husbands and wives in reference to themselves; all of them failed to perceive that their own mates might have an existence basically separate from their own or any kind of destiny apart from their marriage...Somewhat belligerently, they asked me to define the purpose and function of my wife. "The purpose and function of Lily," I responded, "is to grow to be the most of what she is capable, not for my own benefit but for her own glory and to the glory of God." [Peck, pp. 165,166] It's the same as a manager: their job is not to serve you but to become they best they can be.
Peck does not believe in separate lives. "If I perceive my wife or my children or my parents or my friends suffering from an illusion, an ignorance or an unnecessary impediment, I have every bit as much obligation to extend myself to them to correct the situation insofar as possible, as I do to my patients, who pay me for my services. Am I to withhold my services, my wisdom and my love from my family and my friends because they have not specifically contracted and paid me for my attention to their psychological needs? How can I be a good friend, father, husband or son unless I take the opportunities that are available to attempt, with whatever artisry I can command, to teach my beloved what I know and give whatever assistance is in my power to give in his or her journeys of spiritual growth? Moreover, I expect the same services from my friends and family to the limits of their ability." [ Peck, pp.177-178] Cmp separation of personal and business.
When managers start out, they are usually expected to work in a vacuum, to prove their worth. They are isolated and have no one to turn to for help. It is better for a new manager to seek help on something than to do a poor job. Unfortunately, many companies set up managers in competitive tiers with no one to turn to and no way to share their strengths. [Slack] They are left with only the tool of mendacity to protect their incompetence: they increase their isolationism and protect themselves with lies. This becomes a domino effect. DeMarco says that managers who rule by fear tend to cluster together--they support each other or hire people who are like-minded. [Slack, p.90]
Middle-managers are often isolated, unable to communicate with each other or ask for advice from above. [S p.161] When manager’s are isolated, there is no accountability: nobody sees what they do.
Microsoft overloads managers to see if they crack, then reassigns them if they do because they can't handle the pressure. But managers need to be able to fail without being blamed if they are to taking on challenging, risky projects. [S p.95,96]
What incentive to managers have to award good behavior. By the 127 rule, awarding good behavior makes the stand out. Managers have less of a reason to award good behavior than even punishing bad behavior. The lazy manager will fail to be a manager at all because there’s little accountability in today’s companies for managers.
The isolationism of managers make weekly status meetings (the substitution of teamwork) into a ceremony glorifying the boss leading the meeting. [S p.170] The isolationism can spread to the team, breaking down communication. An isolated manager is, by definition, mendacity, a contradiction in terms. Managers cannot do their jobs unless they can communicate with peers and those they serve.
It is said that good managers are skilled at what they do, but great managers surround themselves with staff better than themselves. Yet nothing is further from the truth. While applying for jobs, I have been repeated told that I am “too good” at what I do. Companies have the policy of hiring stupid, deceitful or just plain wrong people for a job. The North American job selection process, from resumes to interviews, reinforces the selection of bad candidates.
I’ll address interviews in the next section.
A SuSE manager said that his company had to hire 10 people to find one good programmer. My father hired 10 right-hand men before he found a good one who stayed on.
Companies may hire a "web designer" or a "system architect". There's no recognition that certain outstanding people may be good at many tasks or possess orthogonal traits. Companies settle on mediocrity, choosing not a "Java expert" but a programmer who is not good enough to master more than one language. It is the company that suffer with poor talent.
Suppose a band is hiring a drummer. Would they hire a drummer who described himself as a "snare expert" but unable to use high hats or the bass, who was only interested in drumming for the money, not the music? But this is the kind of employee companies hire.
Cringely argues that good people are hard to find. He says that (by the 7 plus or minus 2 rule) only 0.3% of people can memorize more than 9 items. His point is not that those that can accomplish this are better than others, but that people with exceptional skills are rare--they exist, but if you want them, you have to search for them
Some companies, inspired by arguments like Cringley’s, use crude tests to weed out candidates. IQ tests are used to identify “smart” people. However, IQ tests are biased to abstract thought and certain personality types. Second, they don’t determine whether or not a person is destructive.
When Loki games considered hiring me, I told them up front that my experience was writing games for non-Intel platform. When they sent me a test to evaluate the skills, they sent a test about low-level Intel graphics. If you're going to test peoples skills, dumb tests lead to dumb people being hired.
Some have said that current hiring practices cause a random selection of an employee from equally viable candidates. This is not true. Instead, there is a bias towards a particular moral and personality type that's detrimental to the company's well being.
Others say that hiring quality staff is not important any more. As a Dilbert cartoon explained, Dogbert runs a help desk and talks with a bewildered user. He'll ask the user a bunch of pointless questions and then will transfer the user to another person who will ask exactly the same questions in order to prove that the tech support people have absolutely no understanding of technology. Ironically, many companies help desks hire personnel based on their failure to understand a technology that they will be required to support.
When I visited an outsourcing company, a former head of human resources was describing how to write a proper cover letter. He showed an actual letter written by a guy who said he was desperate to find work and asked a HR officer if he had any leads. The lecturer said that this was a worthless letter since it was an insult to busy HR departments: it wasn't their business to do hand-holding.
I disagreed. I thought it was a sorry statement on the self-centered attitude of HR departments. Clearly the letter showed a person who was anxious to work, willing to go out and find a job, honest (who would write a letter like that who wasn't honest?) and if he was hired, he'd pay back the favor of hiring him. Who would be foolish enough not to hire a guy like that. But if the guy had sent in a perfect cover letter and lied through his teeth and acted like he didn't give a crap, then according to the lecturer, the guy would have landed a job. There is something fundamentally self-
Employees are hired for blame deferral.
Hiring the wrong people leads to a vicious circle. The wrong people will tend to recommend the wrong people in order to defend their weak position.
Corporate hiring is entirely turned on its head, going against all common sense. There needs to be a better way of evaluating people, a way to identify talent not skills, a way to hire the best people for a job. There needs to be a way to keep destroying angels and a way to discourage mendacity.
A professor I had once asked whether it was better to hire, as an IT manager, someone who know a lot about IT but who was a lousy manager, or a great manager who know nothing about IT. I tested the first hypothesis at a company I recently worked for, and the second was tested by Steve Jobs when he hired John Sculley.
In the first case, I worked for a team leader who lacked virtually all discernable leadership skills and outside our team, he was know as the "Angry Father. Over the course of a year, he made over 100 serious mistakes, or about 1 serious mistake every 2 and a half days. The team was left bitter and resentful, so he threatened people with layoffs, leading to a vicious circle. Being out of touch with his team, a genius UNIX hacker with no management skills undermined the productivity of everyone he was serving.
In the other case, the slow demise of Apple Computer under John Sculley and his compatriots is documented in the book "Apple". The book chronicles how Sculley pitted Apple against the unassailable business market, sacrificing the markets which Apple previously had in its grip. Revolutionary technology developed at Apple, like the digital camera, were sunk. Doomed to fail products like the Newton were spurred ahead despite constant warnings from staff. Sculley and his ilk had no clue whether they were being deceived by project leaders or when whether or not a technology was truly revolutionary. In the end, Apple was forced to the brink of bankruptcy by upper management who didn't understand their own technology.
So to hire a manager with no leadership skills or to hire a manager with no understanding of what he is managing amounts to the same thing: a team with no manager. Is it better to hire a baseball player with no arms who can run well or a player with no legs who can really hit? Either way, the player will never set foot on first base.
That doesn't stop these kind of people from being hired. When the only interest is hiring someone who looks good, or appears to have good potential, a company is essentially hiring someone who can't do the job they are being hired for.
My father hired a pool player to run a grape harvester because of his eye-hand coordination. It's better to hire someone who doesn't know a particular skill because you can train a smart guy to do what you want, and he will do it the way you want and will do it well.
destructive in this HR model.
On the other hand, some companies try to hire the perfect fit candidate under the pretext of saving money. They would argue that the cost savings in hiring a Perl programmer to do Perl work offsets the value of hiring a smart programmer and retraining or updating his skills. This looks like a sound use of resources but it is no such thing.
In these days, long-term employment is only 3 to 5 years. There is a strong incentive to hire a person with a particular skill, use him for a single project, and discard him. There's no training cost. But who trained him in his skill? A competitor? Self-trained using money that he saved? Companies that hire without training are moochers who drain the resources of the local community. This is not cost savings at all but a way of making others pay the upkeep costs for skills. If moochers become the dominant mindset in a community, the overall IT skill set in the community becomes old, obsolete and the entire community is hurt by the effect.
I spoke with a salesman once about how to handle business partners when they don't live up to their agreements. I said that a person should discuss the problems with the partners. Some effort should be taken to identify the problem and correct it, even if it fails. When the problem is corrected, it's of benefit not only for your business relationship but also by indirectly enriching the business community. The salesman disagreed. “Ken, you should drop them like a hot potato. Discussing anything with losers is a waste of resources.” What he was advocating was that a company should be a moocher, leaving dealing with problem partners to somebody else, making it somebody else's problem.
In wheat farming, when seed is sown that plants that grow respond according to the type of soil. If the soil is bad, the plants will be unproductive. If the soil is good, the plants give back many new kernels. Even if half the farm contains soil that is weak, the other half is so bountiful that the farmer can still make a living. There's inherent risk in trying to improve the community. There's no guarantee that the time and resources you use will be rewarded on any single effort. But in the long run, those successes you do find will more than offset the cost of the effort.
The company that mooches is a short-term opportunist, shooting itself in the foot, undermining the community in which it functions, and is setting itself up for long-term failure. It takes a “1” personality to make the world better than how you found it, whether that's by setting aside a training budget, advocating changes in local laws or offering advice to business partners. These people are team players who want everybody, including themselves to succeed. In taking small, short term investments in others, a company is success-focused and can achieve many years of valuable rewards.
The human brain is very good at organizing the world into patterns. People like things to be placed in nice neat boxes, labeled and understood. When events occur which defy our notions of the world, we try to make sense out of the new patterns we see. This is how theories of misfortune, or superstitions, arise. If something bad happens when a black cat crosses someone’s path, maybe something bad will happen whenever black cats are around. The sense of order and security is restored and we can go about our daily life while improving the world by reducing the local feline population.
Once I worked for a company where a vice president said to me, “We had trouble with your kind in the past.” To this day, I don’t know what he meant by “your kind”. He never explained himself, but it was clear that he felt that I was a cat that should be exterminated.
Trying to hire someone is just as frightening as being a job applicant. Hiring a bad applicant can reflect on someone’s position or it may man having a negative impact on an entire department. Yet people are still faced with the task of evaluating perfect strangers. Like superstitions, people need to be reassured—or, at least, need to have something to blame when the applicant turns out to be a bad choice. This comes in small pieces of paper called resumes.
The idea that perfect strangers can be accurately evaluated for a job is absurd. Most jobs are filled internally or through the recommendations of acquaintances. In most cases, the resume is just the object of blame if the candidate doesn’t work out. It’s not used for explaining skills or experience—these are already known and vouched for.
When people are forced to make decisions under fear and without proper information, they can make bizarre and even paradoxical decisions. The popular TV show “Hogan’s Heroes” was originally turned down by NBC—not because the show was bad, but because the show was a sure success. It was so good that the executives didn’t see how the cast and crew could keep up the quality [BR13, p.177]. So it was discarded because it was a perfect candidate.
Besides the “we can’t hire you because you’re a perfect fit”, I’ve also heard other superstitions such as “we can’t hire you because you’re too qualified so you are not loyal”, “we can’t hire you because superior candidates will threaten someone’s job” and “we can’t hire you because you are under qualified so too dumb to learn”. So if an underqualified applicant is rejected, and an overqualified applicant is rejected, and a perfect fit is rejected, how then can resumes be used to fit a person with a position?
In fact, if the chief purpose of a resume is blame deferral when an applicant turns out to be a destroying angel, how can a listing of skills, experience and references vouch for a person’s character? The 127 rule suggests that 20% of candidates could be destroying angels, and they will be indistinguishable from ideal applicants because that’s what destroying angels do—they blend into the paperwork. On the other hand, 10% of the candidates may be exceptional but are too honest or humble to sell themselves on paper.
Even so, many companies simply hire to fill a vacancy, even though the candidate may be useless, deceitful or destructive. They are too lazy or rushed to bother doing an accurate search of the resumes cross their doors.
It resumes could be taken at face value, it may be argued that they supply information about the person’s capabilities and how they can be applied to the company. This is not true, I will discuss it below. But for know, it’s enough to say that resumes are a superstitious business, full of mendacity. They don’t work—they never have. And destroying angels know this.
Superstitions are the act of assigning labels to unexplained misfortunes. Prejudice can be said to be the act of making superstitions and saying “I’m smarter than you”. If you go to a restaurant and get bad service, you may decide that the restaurant gives bad service every night. You might decide that all restaurants give bad services. Or even that they all give bad service because they delight in mistreating their customers. So you decide to eat at home and tell all your friends that only a fool would eat at a restaurant. Superstitions are caused by fear; prejudice is caused by pride.
Interviews are supposed to be the safety net for resumes, to evaluate the suitability of a candidate and to weed out destroying angels with trick questions. During an interview, the personnel officer puts on an act of sincerity while looking for flaws in the applicant’s performance. When the applicant makes a mistake, the officer announces, “I’m smarter than you!” The interview process is not designed to evaluate candidates but is an exercise in prejudice. They are a ceremony to page homage to the personnel officer.
If interviews were truly effective, why do people take training courses in order to pass them? Interviews are not conducted in the work settings. They are not conducted in a natural, social environment. They are conducted in an alien environment under extreme stress. It is unlikely that the personnel officer would get an accurate “first impression”—or any impression—in such a scenario.
In the days of my grandfather, in small-town Canada, people would meet together regularly for church and after work at bars. These meeting places served as a way to get to know a person’s skills and ethics and show how they could be applied. Although the number of candidates were smaller, they were well-understood. My father once hired a pool player to run a complicated piece of machinery. Although the pool player knew little about machines, my father saw how his hand/eye coordination were far more important than his experience.
Companies based in large cities have no way to search out and recruit excellent employees—and no way to fathom out their history or ethics if they are destroying angels—companies hire blind. Destroying angels are only interested in giving the HR person what they want to see. Since they have so much to hide, they carefully train themselves in misdirection, not to promote their skills as much as to hide their agendas. Although many people believe they can spot a like, it’s not actually possible to tell whether or not a candidate is a destroying angel on the basis of an interview.
Like resumes, interviews go more smoothly if the person is known by someone in the company. Sometimes the results of an interview are completely ignored in favour of someone’s personal assessment based on first-hand experience. North American culture prides itself on a lack of prejudice. Surprisingly, interviews are on of the few areas where unjustified bias is rationalized as a reasonable course of action—even when it doesn’t work. There are no shortcuts to evaluating a person’s character.
Since resumes and interviews are superstition and prejudice and do nothing to protect a company against destroying angels, it may be argued that outsourcing the hiring process is the best solution. Companies are busy and reviewing candidates is slow and expensive. Hiring agencies (or headhunters) are professionals trained to chose the best staff and are paid large commissions for the selection of an acceptable candidate. They ought to have some secret weapons to protect themselves from prejudice and superstition—that’s why they can demand high prices.
In reality, hiring agencies are an expensive shortcut used by desperate, fearful or lazy people. Since the agencies must go by the job criteria, matching up resumes with the same superstitions as personnel officers. They have no idea how skills are transferable (though they may claim to), no idea of the larger issues for a company, and have no social connections to given them an idea who will make a good candidate. In short, hiring agencies select resumes at random.
In many cases, a company doesn’t care about a person’s qualifications—they just want to fill a hole. Whether they hire a poor candidate—or a destroying angel—is immaterial. The hiring angecy is being paid large commissions so they they can take the fall if the candidate doesn’t work out. The agency is being used as a scapegoat. Of course, this seldom works out. By the time a destroying angel’s agenda is discovered, the company cannot blame the agency without blaming themselves as well. Hiring agencies are seldom useful in blame deferral.
General layoffs are a sign that a company is in serious financial trouble. People are usually the largest cost to a company and are the first cost to be cut. People are not a resource: they are human capital [Slack, circa pg.35]. They are an investment made by the company. When there are general layoffs, the company is taking a loss on its investment.
When a company makes large layoffs, the company is crippled and the full results many not be felt until years later. The temporary gains are offset by even larger losses down the road as the company is unable to demand or roll out new products.
Cringely talks about the myth of “professionalism”. After a young and innovative company becomes successful, a member of the board of directors may say that they need to become more “professional”. This means that the board member wants to hire some of his cronies, slash the staff in order to show short-term profits, and sell his stake in the company for a tidy profit. Meanwhile the company is left to die. Such people are destroying angels. This is a common occurrence in many IT startups [Cringley].
Similar problems occur when companies have large staff turnover. This is especially true in IT where staff move constantly because of boredom and the need for advancement. Companies with huge turnover rates lose a lot of money, but they seldom take this into account. [Slack circa pg. 35]
If a company is in financial difficulty, it’s much more effective to address the real issues rather than to cut staff. However, if the problem has been left too long by people who hoped it would just go away, layoffs may be unavoidable. The company must share some of its hardship with the staff.
---
If a manager sees two people talking, is this an indication of dead weight in the company? Without knowing the conversation, how can a manager tell if the person standing is an idle gossip, or if the person sitting is not good at their job and is receiving a tutorial? Some layoffs are made with as little forethought. In this case, you might as well perform downsizing by flipping a coin for each employee. Blowing away people randomly will not make a company more efficient.
There is a lot of pressure on managers to make cuts while being overworked and giving the impression of improving efficiency. I knew one manager who, if his boss didn't like blacks, would cut all the blacks under him in an effort to look efficient. If his boss never checked his actual efficiency, he would just assume that his manager was doing a good job by subconscious absence of black faces.
Managers are never the lines of communication in a company. Any company that attempts this immediately creates an underground grapevine. [Slack]
Integrity is important. One CEO set regular announcements to his employees that were written by someone else. Like a politician giving a speech, he was told what to say. Employees had no faith in him or his statements. The company was left without a leader whom the employees could believe in.
When corporate communications are flawed with mendacity, the entire communications infrastructure of a company breaks down. A CEO must never use speechwriters because he will appear to be a puppet leader to the employees. Employees are not stupid: they know when they are being deceived.
A communications department is supposed to keep employees informed. Unfortunately, the idea that communications people are propagandists and censors is so embedded in our culture that in most cases a company has better communication without any communications department at all. Having such a department erodes communications worse than the rumors it is supposed to stop and reduces morale when every message is suspected of hidden agendas.
Integrity is essential for communications. If nobody believes what you say, you are only fooling yourself. An executive must always write his own messages and sign his own cheques. According to my father, Oprah Winfrey signs nothing without OKing it first.
Focus on communication, not risk. According to once source, Canadian textbook publishers don't case if a textbook is prejudice or not. Rather, it's the appearance of prejudice that they avoid. This is another form of mendacity.
Salaries and pay rates should be public. Hiding them creates speculation and reduces morale and enhances the belief that there's something to hide. This also creates an internal check-and-balance against unfair wages.
When the president of my company announced a takeover to the staff, the response of the employees was universal. They wanted to know why he thought they were children so that they would be fooled by his empty reassurances. Whether or not his words were true, the point was the employees didn't believe it.
They say in news casting that you have 20 seconds to tell a 10 minute story that a reporter has only an hour to research. Does anyone believe that the evening news is little more than a gossip report? News casts cannot possibly have integrity under such conditions, unless in a small town where the background is known beforehand.
Apple, in its heyday, was a company of free speech. John Sculley's door was always open for anybody to walk in, and he daily went around the buildings to get the developer's feedback on the latest projects. Conformance and strict lines of communication were rejected at Apple as interference in the flow of ideas.
Sculley's open door policy was effectively destroyed when Allan Loren made everyone go through him to get to his boss. Sculley was not paying attention and his underlings told him everything was file while morale plummeted due to mendacity. [Apple p.115,115]
If a company is too flat, it leads to bad communication due to overwork. If a company is too tall, it leads to bad communication personal bias. Mendacity cannot be fought by using an organizational system. Going from tall to flat, or flat to tall, only exchanges one kind of lie for another.
Communications should reflect on the concern of the people. Showing little converging of a major vision, or showing big coverage of a minor vision. It's another form of lies or mendacity.
A study showed that a major reason that the FoxMeyer Drug Corporation, a large wholesale drug distribution firm, went bankrupt as a result of the lack of communication in the IT department. IT people were encouraged to hide the problems with their system, especially the fact that it would be unable to handle the volume of new contracts. [ACM April 2002, pg.79] A similar problem occurred at a company I worked for.
A man with integrity is a man who sees the world as it really is. When you see the world as it really is, there is a straight road to your goal. You discipline yourself to stick to the road. When a man has no integrity, his fears, hates and inner demons distract him from that path—he wanders off into the undergrowth and takes his employer with him. It’s the man with integrity who reaches the goal and who is stronger for it.
When a boss I worked for wanted to impress his customers, he phoned me in the morning, in the evenings, during means. As a contractor, I handed in my biweekly invoice and it showed that my productivity had been cut by more than half due to his interruptions.
Like communications, morale is a subject largely mislabeled and misunderstood. Morale is not a positive attitude. It is not vapid cluelessness or a blind disregard for a futile battle. It’s not freedom from stress or a happy-go-lucky attitude. Morale is the trust, faith and hope between people. When you don’t trust or believe in the integrity of your coworkers, you have no morale.
During my six-month review at one place where I was head of IT, the president praised me for the improvement in morale at his battered and beleaguered company. What did I do? I simply put my trust in the people under me, treating them with honesty, respect and kindness. To coin the golden rule, I treated them the way I wanted to be treated.
I knew a supervisor looked down on stretch breaks since it made his team look lazy. Do you think that he wanted to be treated the same way, having his manager complain if he took a kink out of his back? I doubt it. His paranoia created a double-standard and hard feelings in his staff.
When personnel people undertake morale-building exercises, they are an attempt to deal with symptoms, not problems. At one of Canada’s most top rated companies, human resources put a VCR and a set of Mr. Bean videos in the lunchroom to relieve stress. But if you cannot trust your boss, how would watching videos change that? In fact, managers at that company forbid employees from watching the videos in the first place.
If low company morale is a matter of trust, faith and hope, it should be no surprise that destroying angels are major contributors to poor morale.
Although most companies have an extensive disciplinary system—even if it is just there for show—few companies consider how to award excellence. When awards and bonuses are left as an afterthought, they are left to the discression of managers who are not held accountable over their decisions.
Some managers consider awards as “hand holding”, extra work without value. However, the need for peer recognition is universal. Everyone wants to feel valuable and have their value confirmed. Rewards also confirm that personal improvement and excellence are beneficial to the company, cutting costs and improving morale.
Failure to award excellence is the equivalent of slavery: work without value.
When managers are accountable for awarding their teams, they, in turn, become awarded. Apple, in its heyday, was an awards-oriented company. Managers were free to offer rewards of any sort for a job well done without worry about being chastised for the expense. When Kevin Sullivan oversaw Apple’s finances, so much red tape was put into place that offering bonuses became a taboo. [Apple, Pg. 65]
Empty prizes actually decrease morale by insulting employees. The prizes offered by companies, such as Blank of the Month awards, are too empty to inspire. [Slack, pg. 46] If a prize is hollow or insincere, it is an insult to the person receiving the prize and they will know it. They will know it is mendacity, a fabrication of praise from insincere people.
Subjective prizes increase pressure in a company. [Slack, pg. 46] Prizes are seldom earned by those who deserve them but by visible people with connections. My old high school was notorious for awarding its ethical award to the most popular students, not the ones who quietly do community service. Subject awards require much more time and research to award that most managers are willing to take. They only result in hard feelings.
Concrete prizes, that is, prizes based on hard numbers like sales performance, create a cutthroat atmosphere. If a salesman is unable to meet his target, his only alternative is to sabotage his fellow salesmen, defeating the purpose of the prize.
People who attempt to win prizes of any sort will be equally inspired without them: they are disciplined, goal-oriented individuals who are used to setting their own milestones. However, if their milestones are undermined and their initiative is ignored, they will be discouraged. When Nortel predicted 30% growth and tied the bonuses of salesmen to that figure, the salesmen abandoned ship, taking their connections with them. [Nortel]
Awarding employees is an integral part of a successful business. A failure to award employees, or an ill-conceived system, will create an atmosphere of distrust, backstabbing, frustration and disillusionment. It will be seen for the empty mendacity that it is.
Without an effective award system in place, a company has to fall back on the only way to confirm good work and show appreciation: promotion.
Conventional wisdom says that promotion is the movement of a person into a position of more money and less responsibility, usually into a position where they have to manage other (or more) people. The key value here is experience: as the person moves through the ranks, they learn intimately how the business as a whole functions and they can apply this knowledge directly when managing those ranks.
Although this technique was marginally successful in previous decades, today people seldom hold a position at one company for more than five years. They have no time to develop a feel for the larger organization before they are shuffled off to another company out of a search for better wages, boredom, or a corporate take over. Computerization constantly causes departments to merge, split or change function. There is no “ranks” to apply knowledge to.
Promotion is the movement of a person of an individual through an organization in a search for a job they can’t do. It is possible to promote a person into complete uselessness, and a useless person is not only bad for a company, it’s bad for the individual. After Don Estrige had a phenomenal hit with the IBM PC, IBM “awarded” him by promoting him to a managerial position to guarantee that he wouldn’t have a follow-up success. [I Cringley, Fixing IBM]
It’s mendacity when a person is promoted into a useless position, or where they feel useless. A fish out of water, they are expect to master the position (if they have the skills to do so) in complete isolation—except for the boss who promoted them. The result is that a system of favours develops: the promoted person owes their boss for doing the wrong thing. This is an effective tool of destroying angel managers as it allows them to push their own wrongdoing by calling in favours.
When people are promoted into new jobs where they have no experience, they are no longer part of a team and are expected to learn in a vacuum. This is especially true of management teams where individuals are isolated by office walls. [S p.169]
Promoting people is an ineffective way to award people. More often than not, senseless promotion hurts both the individual and the company and gives power to destroying angels.
Between 1990 and 2002, the average CEO pay has risen 600% [BR15,pg.182]
Nortel CEO John Roth earned a retirement package of US$700,000/year for the rest of his life. Nortel stock fell from $124 to $7. [ BR15, pg.246]
Distrust is often justified in the name of security, protecting the innocent. That distrust can lead to wrongdoing and a lack of focus on "rightdoing". Companies are often eager to put up security measures in the excitement to catch a criminal in the act, but neglect to show appreciation to the innocent majority who form the basis for the business.
When people are promoted into new jobs where they have no experience, they are no longer part of a team and are expected to learn in a vacuum. This is especially true of management teams where individuals are isolated by office walls. [S p.169]
Stock markets operate on fear (and greed). People shun stocks out of fear. When CEOs have their jobs on the line on the basis of stock performance, the CEOs are being driven to reduce people's fear even at the price of mendacity. They will alter financial figures. When enough people realize that the figures are "cooked", they will lose faith in the stock market and will no longer invest in business. This creates not only a recession, but with tech companies, puts North America's future as a tech leader in jeopardy. With no investment, new products and services cannot be rolled out. Mendacity destroys North American's long-term future, but the CEO will say, "Hey, my job is on the line. That's what the company demanded that I do." So stocks are a poor way to motivate executives.
Conformance is saying and doing what is unnatural, undesirable or wrong because you are ordered to or you have a need to be accepted. Peer pressure can cause people to do what they don’t want to do. Patriotism pressure can cause people to say things that they don’t believe
In businesses, like in schools and families and political borders, people are expected to conform. But conformance is not necessarily a virtue: pursing people to act in a certain way is only good if the motivation and the goals are good. If a person agrees with the goal, like a person who joins Weight Watchers to have emotional support during weight loss, it is not conformance but encouragement, fellowship and bearing burdens.
When I was in high school, I was taking a math test and discovered a mistake in the teacher’s material. For a suspicious question in the test, I plotted some test data on the back of a piece of paper and figured out the correct answer. The teacher marked my answer wrong, but I protested and demonstrated the correct solution in front of the class. “Well,” he said, “it looks like I made a mistake. So, class, we have two choices. We can either mark Ken right and everyone else wrong or we can leave the marks the way they are. Now how many want to be marked wrong?” When no one put up their hand, he said, “Sorry, Ken, we live in a democracy.” So I received a zero for a question I had gotten correct.
The math class was an important example to me. Conformity in public companies can mean suppression of the truth. When senior officers are rated by their company’s stock performance, bad news is frowned upon under the guise of teamwork and conformity. In reality, the ones pushing conformance are the ones who are not the team players. They are looking to suppress problems that need solving in order to sabotage the team and save themselves.
Unless problems are exposed, they cannot be solved. Exposing problems means risking non-conformity. By the 127 rule, heroes and villains are the minority and may both be equally despised for being non-team players—the villains because they want to destroy the company, and the heroes because they stand up to problems that threaten a company in order to expose them and see them corrected. Only the 7’s, the majority, avoid standing out and are never labeled non-conformists.
An anarchistic company, one where there is total non-conformity, where every decision is questioned, is no better than a conformist company. Anarchy breeds backstabbing, hurt feelings, political alliances and a lack of teamwork and trust.
A healthy company needs a certain about of righteous independence and risk taking. People who are non-conformists are not necessarily non-team-players. A company with solely conformists is a company of “yes men” who are only out for their own careers and who have no outstanding performers. They are men you say “yes” to mendacity.
"The act of love--extending oneself--as I have said, requires a moving out against the inertia of laziness (work) or the resistance engendered by fear (couage)." [Peck, p. 131] 1s are courageous workers, 2s defend their laziness and phobias, 7s are content with their weakness.
People respond to stress by staying to a course of action. A captain of a shop on stormy seas redoubles his efforts to reach the harbour safely. A team or company that is continuously under stress is one that is not prepared to deal with changing priorities and conditions. In IT, preorities and conditions are constantly changing (because of Moore's Law).
Tom DeMarco, having worked for Microsoft, Apple and other tech companies, points out that "very successful companies have never struck me as particularly busy." DeMacro's argues that success is not linked to overwork or high efficiency. This makes sense: an over-efficient, stressed out company may work zealously towards a goal, but they have no time to confirm the goal is the right one.
European companies expect workers to work hard but also to play hard. They have more public holidays and four weeks or more of annual vacation days. [BP]
"The simplest truths often meet the sternest resistance." [BR15, pg.113] Its easiest to market crap.
Electronic Arts said in Wired that they advertize the experience, not the game. That is, they refuse to advertize the product that they are selling but instead try to deceive the consumer into thinking that their games are better than what they actually are.
When Y2K turned out not to be the end of the North American business world, it wasn't because of the billions spent on its prevention but because the web sites of most companies are empty facades. Orders simply get printed out and retyped by hand. Y2K was just another glitch for the quality control personnel to catch.
Marketing is another victim of mendacity. The role of a marketer is to accurately describe a product to the people who may purchase it. However, the dark side is to find subtle ways to misrepresent products to artificially increase the market. For example, Intel released a processor called the "486DX2" which was twice the speed of a normal 486. ("X2" is a common abbreviation for "times 2".) When the "486Dx4" was released many people assumed that the processor was twice as fast as a DX2, but it wasn't. The DX4 was three times faster than a normal 486. Good marketing should have caught the fact that customers would believe the DX4 was faster than it actually was and arranged to have the name changed.
In contrast, with Steve Job's return to Apple Computer in the late 90s, the Macintosh line was streamlined. With around a dozen similar products, salesmen and customers were equally confused as to which Mac was best for them. The marketing strategy was originally introduced by John Sculley to mimic the convoluted choices offered by Intel-based machines and their many providers. Steve's strategy was to reduce the product line to 4 machines: two high-end, two-low end, two laptops and two desktops. Customers and the sales force now had clearly defined alternatives.
Microsoft Windows software suffered from poor marketing in the year 2000. Traditionally, there were two Windows lines: the low end designated by numbers (e.g. Windows 98) and the high end called Windows NT. Then Windows 2000 was released, appearing to be low end but it wasn't but it was really based on NT. And Windows ME was released, but it was really a low end product that was based on Windows 98. With the naming changes, they appeared to be brand new products, or total rewrites, but that was not the case. As a result, it was not clear to customers which products to upgrade to or what advantages were being offered.
In a monopoly position, the pressure on marketers is to befuddle the consumer in the hopes of purchasing the wrong products, and then making refunds so difficult to get that they don't ask for one, artificially inflating sales. Another form of mendacity. In the late 90s, people marched on Microsoft's offices asking for a refund for their Windows software because of the poor quality.
Microsoft refused to uphold their on refund policy. In 2002, Bill Gates admitted that poor quality was a serious issue that needed to be addressed.
Some businesses track bad customers, but few track good ones. Although the 127 rule indicates twice as man bad customers than good, the good represent your loyal customers: spreading the word about your company and committing many years of steady purchases. When a customer returns a duplicate shipment, for example, instead of keeping it, they should be flagged as a preferred customer, the same as any large buyer since that's what they effectively represent. (This primarily effects individual customers since corporate turn over can be high.)
Be prepared for your market. About half of all telephones in the world are located in the United States. Less than 1 percent of the world has broadband access. Yet most web sites are designed for broadband customers. I once designed an intranet site with only 1 small GIF logo on the page. A consulted commented that he never seen a home page come up so fast.
Shopping carts were a tough sell: women who pushed baby strollers didn't want to push things, men didn't want to appear too weak to carry a basket, and grocery stores were afraid of kids playing on them and that the store would be sued. It wasn't until the inventor of the shopping cart created a movie showing how shopping carts would be used that stores began ordering them.[AABR, pg 262 ]
Software obsolescence is like the story of Sealand, the world's smallest country. A man and his wife made their home on an abandoned British military platform in the middle of the ocean and announced that the platform was an independent country. The case went to court but the judges ruled in favour of Sealand because the British military had abandoned it. Software, like Sealand, often gets left for dead, but if someone shows an interested, they are attacked. Sealand is not like the Falkland Islands.
Like Sealand, many people have approached Apple to license their old Apple II technology, and Apple answered with militaristic hostility to protect their abandoned projects. "If we can't do anything with it, nobody will." It's bad business, but it's also unethical when you consider Sealand.
Customers are fickle. If a price is too low, they think there's something wrong with it. If a price is too high, they think they're being overcharged.
People purchase an item on its perceived value. If they perceive that the price is not fair, they must be convinced that the price is fair or it must be changed. To build a program with the comparable features of Microsoft Word, its perceived value is the same as that of Microsoft Word regardless of the amount of work involved or whether or not Microsoft Word is overpriced.
Fair pricing means lower sales from the very customers you are trying to be fair with.
"Blackmail billing" is billing somebody for a service they already receive. For example, a company may charge a service charge to "activate" a service that is, from a computer point of view, always active anyway, or take a cost upon itself to inhibit the always active service.
"Bribery payments" are paying for something that is traditionally free. In some African countries where it's traditional to bribe the boss in order to get a paycheck. This bribe is called a "show of appreciation" to their boss but a bribe, by any name, is still a bribe. If North America, it's called "a service charge", but ethically, it is still a bribe. For example, some financial institutions charge service charges on top of their business of earning money through lending or borrowing.
"Fear insurance" is a maintenance contract that preys on people's fears. They are not based on risk analysis. This is the "chain letter" of marketing. For example, I have never gotten tape protection when renting video tapes. I have never had a tape damaged in my VCR.
Another example is house insurance. Never get insurance for anything that is irreplaceable, since by definition it cannot be replaced. Never get insurance on things that can easily be replaced since you'll spend more on the insurance than the actually replacing the good. That's why I have no content insurance on my house. But I do have fire and water insurance since the house itself is not irreplaceable or easily replaced--it's just not replaceable in an emergency. This is an example of good insurance.
My father once bought a $5 watch. The salesman then tried to sell him a $9 maintenance contract. "On a $5 watch?" asked my father. "It would be cheaper just to replace the watch."
Bad marketing erodes your customer base and produces a bad reputation.
Fear of corruption can alienate your customers.
A small resort in Northern Ontario had a problem. They mainly catered to wealthy Americans wanting to go for a week of fishing deep in the Canadian woods. The resort offered a free shuttle service by boat to the island where they were located. It wasn't long before a couple leaving near the resort began taking the shuttle boat each Sunday to enjoy the view and get a cup of coffee. The owner bitterly complained that this couple was not buying enough to cover the gas for the boat. He talked about putting up a “tip jar” in the boat, or charging for the trip. It was pointed out to him that either of those things would insult the wealth visitors from the United States who paid good money in advance. The resort owner fear threatened to alienate his customers over the actions of a single couple and this would cost him far more money than the couple was costing him.
In the same way, many rental films begin with a message in a red background and capital letters threatening the viewers with lawsuits if they copy the film. They insult their customer base who paid good money to watch the film over the actions of a small number of irresponsibile people. They never say a message, “Thanks for supporting our films. Enjoy the show,” a positive message applicable to the majority which could lead to improved sales and client reliations. Instead, Hollywood insults the people they are supposed to be entertaining.
This is mendacity, making business decisions with an unrealistic world model.
In 1988, Apple broke the cardinal rule of pricing: Do not raise prices of a product like computers that has a high depreciation, even if it was the best computer around. In doing so, sales fell dramatically and customers were angered. [Apple pg. 80-81]
Adobe charged huge prices for its font technology. John Warnock was furious when Apple and Microsoft announced the rival, cheaper TrueType standard. If you sell pencils for $1 million, and there's no way to create an advancements, don't be surprised when people being selling their own brand pencils for 50 cents.
“Our life is frittered away by detail...simplify...simplify...,” said Henry David Thoreau, as quoted by Issac Asimov. Keep returns simple. Don't require a Return Authorization Number for every return. RA numbers get written down wrong or confused, and customers hate paying shipping to return a defective product that you sent them, even if your company is only a distributor. Send them another free of charge. If they request a lot of returns, then ask to see the product and assign an RA number.
A worker for my father was told not to drive the farm van after hours. He took it out, got drunk and crashed it into a telephone pole. It was the only time my father ever fired anyone.
When a headmaster from Ridley College visited Appleby college in Toronto, he was surprised to discover that the college had no locks on its lockers. When he asked the Appleby executives about crime, he found out that theft was far lower at Appleby than Ridley. The cheap locks on Ridley's lockers served as a challenge to students looking to cause trouble and actually increased the amount of crime at the school.
Crime is a reality. Half-baked prevention mechanisms actually increase crime. It is better to keep an environment as open as possible, and anything that absolutely must be protected should be done so with the best security possible. Never shred papers: burn them.
It is impossible to enforce morality by arbitrary rules. Supreme Court Justice William O. Douglas said, "It is better, the Fourth Amendment teaches us, that the guilty sometimes go free than the citizens be subject to easy arrest." [AABR, pg. 232]
I spoke with a furnace repair man who lamented the changes in the repair standards in 2002. "By the new rules, if I come to your house and all you did was hit the off switch on your furnace, I have to switch it back on and then spend an hour-and-a-half confirming your equipment is up to the current standards. What was a $20 house call will now cost $150. That, in turn, will raise the insurance rates of home owners." The paranoia of shifting the blame to "the guys in the field" is paid for by the consumer.
"Do not muzzle the ox when he treads the grain." You can't expect employees not to partake of the benefits of the group. People have individual needs necessary for well being. Do not punish the group for the wrongdoing of one.
Protecting yourself against wrongdoing is a act of diminishing returns. Your best bet is to avoid obvious abuses and not to tempt people to do wrong. By looking at security from the standpoint of "temptation" instead of "protection", you focus on real threats instead of the conjurings of imagination. If 40% of all car thefts take place because keys are left in the ignition, putting a $2 buzzer in the car to warn when keys are left in is a more effective return than a security system worth thousands of dollars.
There is no such thing as complete security.
Without rules, the only disciplinary measure left is firing. That's like having no guns, only atomic bombs, for a nation's defense. When Apple was having problems with Steve Jobs interrupting workflow, they effectively got rid of him by making him chairman. But at the same time, they got rid of the driving force, vision and charisma of Apple. Loosing the baby with the bath water, the company began to decline. Firing doesn't allow learning or personal growth.
Making employees sign Non-Disclosure Agreements (or NDAs) has got to be the single most pointless activity a company can do. Unlike a business contract, employees have little resources with which to use to repay damage in a court case. NDAs are an excuse not to properly educate new employees on their responsibilities. It makes much more sense for the little employee to make the business sign a NDA.
Defining "wrongdoing" as "that which reduces the stock price" enforces mendacity and corruption. Sometimes a risk of stock price fall is necessary. Fear of losing face in the public's eye is not a sufficient reason to suppress the truth. For example, in the "War on Terror", many nations are reluctant to support the U.S. because it decided to "save face" and not issue an apology for all the terrorist groups around the world funded by the government.
There will always be losses of resources. When forming a company that doesn't operate on mendacity--a trusting, honest and unafraid organization--there will still be losses of resources. But they are lost through the actions of bad men outside the company. The company is no longer shooting itself in the foot.
Ridley and defaulter points.
When a headmaster from Ridley College visited Appleby College in Toronto, he was surprised to discover that the college had no locks on its lockers. When he asked the Appleby executives about crime, he found out that theft was far lower at Appleby than Ridley. The cheap locks on Ridley's lockers served as a challenge to students looking to cause trouble and actually increased the amount of crime at the school.
Crime is a reality. Half-baked prevention mechanisms actually increase crime. It is better to keep an environment as open as possible and anything that absolutely must be protected should be done so with the best security possible. Never shred papers: burn them.
"Couples cannot resolve in any way the universal issues of marriage-dependency and interdependency, dominance and submission, freedom and fidelity, for example--without the security of knowing that the act of struggling over these issues will not itself destroy the relationship". [Peck, pg. 141] Likewise, how can a worker work out how to fit into an organization under the continual threat of the slightest mistake costing him his job?
Revenge is petty if you are a Christian since anything you do is a drop in the water compared to what God can do.
You can't declare "war" on a company to prevent corruption or to get even. George W. Bush declared war on Afghanistan but failed in his mission to capture terrorists. The criminals simply moved to a new country and set up shop there. White-collar criminals can move about even more easily. Don't trace the wrong-doing of a company but of its individuals.
In a lawsuit, "everybody always loses". [S., p.92]
Lawsuits are used to deflect blame. [S p.94] This reflects the no stock price drop mentality.
Contracts are so complicated that the courts are often unable to identify the guilty party. [S p. 96] Take a look at the Microsoft antitrust case and the conflicting rulings at different court levels. Or Napster and the flawed DMCA. G.E. has a policy that the bottom 10% of managers in evaluations are fired. [S, p.97] This creates a backstabbing atmosphere.
Imitation is the sincerest form of flattery. Small companies welcome it, large companies are terrified by it. The usual reason for the terror is that large companies are not prepared to deal with imitation, so they try to attack it instead of working with the imitators for an amiable solution effective to both parties. The Olympic committee could have sued every Olympic sales gimmick, but instead it chose to review and approve "official" Olympic merchandise, allowing both the committee and the sponsors to profit.
The legal system has not kept up to date with current technology. Their was the idea of privacy, that people had a place to go home to in order to sort out their feelings and make decisions. The law and modern technology allow the police to peer into homes without a warrant, reading computer monitors, listening into conversations, etc. Before recent technology, these would require a warrant in order to plant a listening device or check the house for evidence. Not any more. Unfortunately, this means that it's up to people to protect their privacy or risk incarceration.
Rewarding good customers or employees can sometimes yield better profits than chasing after the bad. 15% of drivers get 76% of all traffic tickets. What is the point of aggravating the 85% of drivers that are doing a good job? Despite this, big corporations often do the opposite. The death of digital cassettes, Macrovision copy protection, all cause more harm than good.
In fear, companies lay claim on all communications and ideas as communal "intellectual property" regardless of the purpose or application. "Intellectual property" claims attempt to pry into private conversations and take credit where no credit is due. All-inclusive IP is self-defeating.
Wired April 2002 pg 59 - only 5% of patents earn anything. 95% are failures.
Supreme Court Justice William O. Douglas said, "It is better, the Fourth Amendment teaches us, that the guilty sometimes go free than the citizens be subject to easy arrest." [AABR, pg. 232]
Howard Aiken said, "Don't worry about people stealing your idea. If it's original, you'll have to ram it down their throats." [ BR15, pg. 84]
Lawyers are no exception to the 127 rule. 1 out of 10 lawyers is honest, hardworking and dedicated to you. With all the lawyer jokes rolling around, most people would agree with that statement. But that's not unusual: it's what the 127 rule would predict. Lawyers are no more unusual than any other profession: heroes are rare and must be sought out.
Most lawyers want to make money and an NDA is a well-understood, common legal document. What's more, most lawyers know that a legal battle is no sure thing to earn their pay. So how do they make money? If your lawyer is a 2 or 7, he or she may tell you you need a long non-disclosure agreement so you will be protected. In other words, they make their money on your fear, by charging you to draw up a large, complicated NDA.
My father tells the story of one lawyer he worked with who charged people who were put “on hold” on his phone...without telling the clients that there were several people waiting at the same time. The lawyer made more money tying up his phones than doing actual work. Likewise, one publishing company I worked with said that they once had a paragraph in their contract saying that they had the right to build a theme park based on the author's computer book. Who builds computer theme parks? No one, but you can bet the lawyer got paid for writing up that paragraph.
Long NDA's do not necessarily give better legal protection. Even with an NDA, most contract disputes still become “he said, she said” battles where the judge is required to make a fair decision. Even if you bring in an “iron clad” NDA, there's little stopping a judge from saying that the NDA is too complex to be reasonably be followed and dismissing it.
If your company requires a NDA, don't assume you need a big NDA. In most cases, two or four paragraphs should suffice.
Christian have a ceremony called baptism. This rite is not an initiation. It is not a right of passage to prove one's toughness. It's a request for people to "shut up and put up". Those who give lip service say, "Oh, well, I don't mind coming to church one in a while and put my money on the plate, but you want me to stand up and take a bath? Whoa, there, I never said I believed enough to take a stand in public." Yet promotions at companies come often with no proof of fidelity, no verification of faith. I wonder how many would bow-out and say, "maybe I don't believe in that promotion after all" if put to the test.
In the same way, CIOs, CEOs and CFOs are not required to "work in the trenches" before overseeing the people in those same trenches. There is hypocrisy in that. They don't even have a 2-week stint to appreciate the needs of the people that don't come across in paper reports, or even to shake up the corrupt managers once in a while.
Empty "opinions" are not wisdom. One UNIX expert I worked with was so concerned of losing face that he expressed unfounded opinions on everything. He insisted or team be given a certain brand of laptops even though the entire team hated the brand because they were cheaply built and hard to use.
DeMarco argues that bad bosses are a sign of the bad employees that empower them. Standing up to a bad boss may get one fired. [S p. 143]
When working with IT companies, it's important to identify and monitor the people/individuals you deal with. People hop between companies quickly.
The 80-20 rules applies outside of programming. Apple concluded that 20$ of dealers did 80% of the sales [Apple p139]. Ironically, this was to be expected by the 80-20 rule.
In a Dilbert strip, the PHB complained that 40% of sick days were Mondays and Fridays--which is exactly what there should be statistically.
Activision was founded on the principle that, like a book, software was a creative product that had an author, and as such, all early Activison games has author bios and pictures. Under that principle, if an author made one game that fans like, the fans might like to seek out other games by the same author. Each programmer has their own style.
A Dilbert cartoon shows the pointy-haired boss calling a meeting to announce the next ISO audit, ordering the employees to put non-conforming documents into the trunks of their cars--and then torch their cars.
ISO 9000 is the ultimate in mendacity: an effort to give the illusion of reliability and customer service without the responsibility.
Cost-cutting is not always a matter of cutting. To cut costs, Apple got rid of its water coolers and didn't replace them with anything else. Employees had to bring water from home to drink.
When times were bad, my father had his tractor's painted. He explained that when the equipment looked good, the workers would take better care of it. However, most companies trim "the paint" when times are bad, leading to greater costs.
Apple cut off dealers under $500,000 exclusively. They didn't consider whether a dealer had record growth or was on its way down. In one case, they got rid of a dealer who sold $300,000 in his first year. Not only did this insult the dealer, but it left a bad impression on the consumers of the region. With products that age like computers, customers have bitter memories of being shafted by a company.
How do you reposition managers? I haven't talked about moving employees.
Change is accomplished by individuals. A company that is overworked is a group of individuals too busy to consider risks or improvements. You cannot command change, only provide an environment where it is possible. [S p.35]
The self-serve syndrome. Because gofers and secretaries are some of the first to be laid off, managers spend much of their time standing around copying machines and fine tuning slideshow reports instead of actually managing.
According to CBC's Venture, the Japanese consider personal relationships very important and large layoffs are considered to be irresponsible and dishonorable. This means that recovering from the recession takes longer but there is less unemployment. The managers feel responsible for the employees under them.
Cringley points out that IBM, in order to show the illusion of profitability, cut staff on a team until the team was no longer able to function. Not only was the perceived profit a lie, cutting down the team is a hole with no way out, no chance of improving the project and making it marketable [ASP].
John Sculley saved money by cutting $200 million from R&D, improving Apple's bottom line and becoming a success story...until Apple hand now new products to bring to market. [I Cringely, Fixing IBM]
In the same way that you can't legislate honesty, you also can't standardize a job. Creating procedures and forms automate the simplest aspects of a job. The hard part remains. [S p.108]
What's mine is yours--when?
The problem of overpayment of managers/executives. They are justified in trying to attract the best and keep them from leaving, but that is not true.
Companies are becoming the main social groups: a place to meet friends, associates, and romantic attachments.
Emotional support like Weight Watches provides personal, emotional support when it works. Ordinary people need human interest.
North American companies are so full of distrust that one cannot hug or shake a hand or any other kind of emotional support.
"For the most part, mental illness is caused by an absence or defect in the love that a particular child required from its particular parents for successful maturation and spiritual growth." [Peck,pg.175] Cmp w/mgmt.
When George W. Bush's military strategy failed against terrorists in Afghanistan, he used it again with Iraq. As Pierre Berton said in WiW, America's military history is using the wrong strategy. Using tanks to catch individuals makes no sense.