In his later tenure as Apple leader Steve Jobs famously only took a salary of one dollar. The message? He was there for a love of the company not financial gain, and every employee should be there for the same reason. The fact that he owned billions in stock in Apple and various other enterprises giving him a comfortable cushion should his fortunes ever change and one of his risks backfire was rarely mentioned, but Read the rest of this entry »
Mrs. Thatcher was wrong, the markets are not the answer to everything.
Something’s work well with markets, somethings get caught in a race to the bottom, the NHS is one of them.
The core issue is the incentives are wrong, when you have a privatised NHS the incentives are and always will be money.
A key decision has to be made, what is the core incentive of the NHS? Money or keeping people healthy? One of these focuses on the short term one on the long.
When money is the core incentive then people will stay sick. A company that makes money when people are sick, will keep making people sick, so they can continue to make money! If they cure everyone then they will have no way to make money anymore so it’s obviously not in their best interest, there’s no escaping the core incentive of a company. No matter what regulations you throw at it.
However an organisation where people are the main incentive, where the organisation is incentivised by people. Measured over the course of their life how little amount of time they are sick, then people will start getting better as the incentive will move from treatment to prevention.
A privatised NHS will fail, because at it’s core it’s got the wrong incentive.
If we managed the English football team, like we manage government, every time we lost a game, the entire team and the manager would be swapped wholesale with the reserve side for the next game. In what universe does that make any sense!?!
We really need to find a better way to manage government.
We all love a good story, and nothing is quite as compelling as a hero story.
You know the fella, he’s got a bright red cape, blue spandex body suit and red pants. On the outside - ok, I don’t really understand that bit either. Whatever.
Anyway you can picture the scene : there’s a skyscraper, in a terrorised country, run by a dictator and a surprise earthquake triggered by a super villain leaves it perilously close to collapse, on the brink of destruction.
Cutscene. A woman and child scream in panic on the roof top! Oh my god! The emotional factor! What will happen to our poor victims?
Just in the last moment our hero swoops in, saves the day with his superhero strength, props up the skyscraper and then flies off to deal with other such similar potential tragedies.
And they all live, happily ever after. The woman and child safe, free to go back to their cancerous jobs burning e-waste for precious minerals, and the superhero gets that warm fuzzy narcissistic glow from being a hero.
Except it’s not. It would be lovely if that was the end of the story, but of course the real story here is the construction story.
How did a skyscraper without sufficient earthquake protection get built in the first place?
In this story, there’s a structural engineering firm, a project management firm, some shady financial shell companies (that make it impossible to really tell where the money for this project came from in the first place) and they’re all suing the shit out of each other to avoid getting the blame.
But we focussed on the hero story, because it’s easier and more palatable and we don’t really have to think very hard about it. Obviously it doesn’t matter that this focus predestines us to repeat the same mistakes, over and over and over again, until we learn that the hero, is a symptom of the problem, not a solution to it.
Don’t fall for the easy story, if someone says to you the the word: hero, rockstar, superstar or guru, then chances are your organisation has some deep deep organisational problems and you’re building skyscrapers without earthquake protection.
Once when I was a young adult, I had been drinking in a bar after work with some friends, after several beers it was time to leave and move on to a club that was open for longer.
On the way to the club, we walked through a sort of promenade with bars and restaurants on both sides of the road. For an unknown reason, barricades, over a meter high, had been placed about a third of the way along the street, hindering our onward path.
In my youth I was a regional champion high-jumper, which was apart from skate boarding was pretty much the only sport I had ever accomplished something in. In my drunken exuberance, I decided to resurrect these skills rather than the more sensible option taken by my friends of walking round the obstruction.
I took a long run up to gather my speed and just before the barrier I leapt up into a sort of cannon ball formation in order to gracefully glide over the fence and land safely on the other side.
Unfortunately, in my inebriated state, I misjudged the height of the barrier.
As I passed the threshold of the barrier, my toes got caught on the edge of the rail unbalancing me and causing me to abort my carefully composed form and crash land into the hard concrete below on my chest and hands.
By this time, a small crowd had gathered to watch my attempt and provided suitable crowd noises, such as cheers during the run up, and on the land a communal ‘owww’ noise.
Lying on the ground I remember two things, the first was the incredible amount of pain I was in, the second was realising my complete social faux-pas. I decided the later was most important and in a moment of endorphin fuelled bravado, I picked my self up held my hands into the air to proclaim victory.
The crowd cheered my resilience, I was the champion of the fence!
I had also broken a rib and sprained my wrists so badly I could really use my hands for a week.
There was a lesson in there somewhere, however I’m still not quite sure what it was.
I had always had a funny feeling about the stock market, a kind of uncomfortableness sitting in my stomach whenever it was brought up.
The more I tried to understand, the more complicated it got, the more complicated it got, the more the core principles seemed to get diluted. The more the principles started getting diluted, I began to realise, the more it was people using complexity to hide the truth.
Finally after watching this, my mind was made up. The stock market is bad, it’s just people gambling with hard working people’s money and making a profit in the process. Somewhat like going to Las Vegas, giving all your money to a owner of a casino and watching him lose it all on his own roulette tables, then coming back and telling you how unlucky you were and better luck next time.
So it got me thinking. The principles of the stock market are maybe not all that bad - the counter argument people will make to the start of this post are that it has, with it’s reckless gambling, fuelled growth in areas and regions, that otherwise that would not have grown. While that’s partially true, the lack of transparency and fair process, negate the good it has done. It has also grown bad things, like the arms industry whilst destroying profitable everyday businesses due to market fluctuations and wild over speculation.
Without going into the huge topic of all the failings and consequences of the stock market, we can jump to the question, “What would a better stock-market look like?”
I think there are a few principles that should have been created to regulate this out of control monster.
- The process must remain simple, so EVERYONE can understand how it works.
- Holding of shares, should be a commitment to seeing a company grow, not a focus on short term profits. Shares should have a lease period, of minimum one year, five years, ten years or longer. (i.e. No high speed trading)
- Trading shares in between lease periods, disallowed - shares can only be sold back to the company, which has a duty to buy them back and can then sell them on again.
- For a company to float, it must decide, how much of the company, for what price it is willing to sell, and specify projections on what sort of return will be gotten from dividends over the period of the lease of the shares.
- No middle men, the transaction should be directly between the company and the individual. No fee’s, what you pay is what you get.
- Everyone gets to vote. If you own the shares, you own a part of the company. Embedded in the online process should be an interface designed to give the shareholders the voice they deserve.
- Companies finances must be transparent and real time to the share holders. We must protect against complexity through ‘clever’ accounting.
I don’t know whether this would work or not. I do know that somehow we have to start improving on this and this is as good a place to start as any. What would your principle’s of a fair stock market be?
Human error is seen as the effect of systemic vulnerabilities deeper inside the organization.
It’s hard to look past the superficial, especially when your boss or company culture encourages you to find a scapegoat when something goes wrong.
Human nature often er’s on the side of a little sadism, we went through hundreds of years in the middle ages publicly torturing and executing people, so even your team might want to see someone punished for making a mistake. However, being a leader requires that you look beyond the short term, you’re in it for the duration and it’s up to you to set the example.
In the long term, excellent teams are built on trust, not on fear. So get rid of the blame, it’s just making things worse.
Inspired by : Learning from failure at etsy
Save bee’s, help them eat, help us eat.
By any measure, Terminal 3 at Beijing Capital Airport is impressive. Built in less than four years… it commenced full operations on March 26, 2008 without any notable problems
The next day, half way around the world, Heathrow Terminal 5 opened for business. At one-third the size of Beijing Terminal 3, the new London terminal had taken twice as long to build and cost twice as much…. hundreds of flights were canceled in the first few days of operation, and about 28,000 bags went missing the first weekend
What a great article by Mary Poppendieck, showing us some clear lessons from the Chinese teaching us about managing large complex construction projects and software projects.
I can’t recall how many times have I had to argue with senior managers about the value of deploying and testing on subsets of real people before big bang launches, but still with knowledge as starkly presented as this, I wonder how many projects will continue to fail due to rampant manager egotism and plain ignorance of these simple truths.
The design of your product is only as good as it’s smallest part.