Robin's Interesting Thoughts

C. Christensen and M. Raynor, in a footnote in The Innovator’s Solution (p. 144), explain why it is rational for large existing firms to have (or fund) scientific research laboratories.

Disruptive innovations usually do not entail technological breakthroughs. Rather, they package available technologies in a disruptive business model. New breakthrough technologies that emerge from research labs are almost always sustaining in character, and almost always entail unpredictable interdependencies with other subsystems in the product. Hence… the established firms have a strong advantage in commercializing these technologies.

In other words, incumbent firms are more likely than startup companies to successfully bring breakthrough technologies to market (even if those breakthroughs are published and visible to all). So it makes sense for a large incumbent company to encourage new breakthroughs via a research lab, as a channel for new successful products or features.

It strikes me as crucial (and counterintuitive) to remember that startup companies are more likely to succeed if the technology they rely on is not a breakthrough. This was certainly the case with internet companies like Amazon, Zappos, Facebook, and Twitter — only after they gained a foothold did they start to develop breakthrough technologies to scale up their products and add new features.

I made an animated fractal video by having the computer gradually update three rotation parameters as it renders fractals for each video frame. The three-minute video took about 45 minutes to render in fancy mode (but in normal mode, TeraFractal can display animations in real time).

(Click the preview to go to the video.)

Over the past few years, I’ve read quite a few books related to organizational psychology and culture, such as:

• Emotional Intelligence (Goleman)
• The Element (Robinson)
• Authentic Happiness (Seligman)
• Mindset (Dweck)
• Switch (Heath & Heath)
• The Innovator’s Dilemma (Christensen)
• The Lean Startup (Ries)
• Peopleware (DeMarco & Lister)

All of these books use scientific evidence to support ideas that in many ways fly in the face of conventional wisdom. What’s surprised me most is that many of the clear best practices have still not been widely adopted, sometimes decades after first publication. Culture and habits are difficult to change.

But I’m still an idealist at heart, and I want to work at a place where learning is rampant, emotional support is plentiful, work-life balance is required, and creativity is allowed to flourish. Not just to pay lip service to these things, but to achieve them for real. We know that happier employees do better and more valuable work, and we know how to create this kind of environment. It just requires upsetting a lot of the assumptions of mainstream business culture.

I came up with a partial list of what I see as indicators of organizational health. These are meant to be provocative, since most companies do not fit all of these descriptions. Also, I realize that in many cases the devil is in the details, and taking these ideas to the extreme would generally be disastrous. But I stand behind the overall goals.

1. Employees should goof off and be silly together.
   If not, the community is weak and team members need to get to know each other better or be re-assigned.
    
2. Employees should go home early more often than work overtime. If teams feel the need to stay late, there is too much pressure and not enough focus on long-term priorities.
    
3. Employees should typically be working on something different than last year. If not, we have stopped learning; work will become boring and our products and culture will become stale.
    
4. Employees should frequently make mistakes and celebrate them. If everything works on the first try, then we are not being creative enough.
    
5. Employees should feel comfortable challenging any assumption or idea. If the boss is always right, team members feel shut out. If crazy ideas are not encouraged, the environment is not supportive enough.
    
6. Evaluation should be qualitative. Easy metrics such as quotas and billable hours convey a lack of trust and reduce our intrinsic motivation.
    

Achieving goals like these will always be a work in progress, but I think they are worth striving for.

Recently a student I tutor was looking for an online graphing calculator. My brief internet search did not uncover anything satisfactory. But today I found one that really is good. It has only been available for a few months, and works on iPads too.

https://www.abettercalculator.com/

All written in HTML5/Javascript. Probably almost any application that was available ten years ago on any platform can now be ported to the web.

Camera: iPhone 4.

I’ve been thinking for a while about companies that focus on making the highest quality products. I wrote most of this essay several years ago, but didn’t finish editing it until now.

The companies that I’ve spent time thinking about are Patagonia (after reading Let My People Go Surfing by Yvon Chouinard), Omni Group (because I worked there), and Apple (because it’s perhaps the most well-known company in this category). Some other examples, that I won’t cover here, are Zappos and Theo Chocolate.

I started categorizing these companies as “quality-focused” after seeing a series of industry research reports in 2009 showing that Apple is far more successful than most people assume, given their market share. For example, Apple sold less than 10% of laptops in the US, but about 90% of the laptops costing more than $1000. They sold less than 2% of cellphones worldwide in 2009, yet earned 30% of the total profit in that market. (Today, they have 9% unit share and 75% of profits.) In other words, Apple sells only high-quality, value-added products that can command a wide profit margin.

I realized that Omni and Patagonia similarly have a strategy of selling high-quality, high-price, high-value products. (And I believe the products are worth their higher cost: they last longer, work better, save time and hassle, and are plain old more fun to use than the cheaper competing products in their respective markets.)

I wondered: What else do these quality-focused companies have in common? Is it an entirely different way of doing business?

The first interesting parallel I noticed was that all three companies have gone through a “crisis” period that forced the companies to clarify and strengthen their vision (goals, values, purpose) and fully commit to it. Patagonia’s growth spiraled out of control in the early nineties and the company almost went bankrupt before simplifying their product line and clarifying their goals. Steve Jobs is widely credited for rescuing Apple from demise with his razor-sharp vision for product design and his insistence on quality and simplicity. Omni, too, went through a painful transition that resulted in the loss of a co-founder and a clarified statement of the company’s mission and values.

All of these companies also go to great lengths to treat their employees well. There are flexible working hours, plenty of vacation time, convenient and healthy cafeterias, top-notch health benefits, etc. “Let My People Go Surfing” refers to Patagonia’s policy that employees are welcome to skip work every now and then when the waves are high. Apple and Omni’s offices include game rooms, movie viewing areas, and lots of couches. Salaries are generous. The reasoning behind all this has to do with the fact that you need high-quality employees to make high-quality products. One way to attract and retain high-quality employees is to make them appreciate and enjoy working with you.

Patagonia founder Chouinard frequently points out that for many (most?) companies, the real product is the company itself.  In other words, the thing that the founders, executives, board, and employees really care about is maximizing company profits, so that the company itself can be sold or the shareholders can be paid.  The products the company actually makes, and the customers who buy those products, are secondary to the “bottom line.”

By contrast, for the quality-focused companies, the actual products and customers are the real bottom line. Employees emotionally care about customers. They spend time on things that might not be “worth the effort” in a strict sense, but are simply the right thing to do for people they care about. Profitability is only important as a means to this end. As Omni’s philosophy statement puts it, “Businesses that lose money can’t make good software for very long.” Note that Apple has achieved this despite being publicly traded, i.e. with shareholders who presumably demand profit above all else. Maintaining a high-quality value structure is presumably easier for privately held companies like Patagonia and Omni Group.

The primary challenge for any quality-focused company is the need to compete against profit-focused corporations who treat their employees worse and try to rip off the high quality products. How do the quality-focused companies succeed in facing off this threat?

The first requirement is to keep the products truly high quality in a way that customers can trust. Customers will only pay extra if they trust that the high-quality claim is true. There are many ways of establishing that trust, such as always being honest (duh), establishing a consistent brand image to associate with that honesty, and having domain experts recommend your products. World-class rock climbers, skiers, etc. recommend Patagonia equipment. And computer experts in various professions recommend Omni software to their colleagues.

A second requirement is consistent innovation. You have to do this to stay ahead of the copycat competitors. In economics parlance, this gives you temporary monopolies because you have a unique product. Innovation requires creativity, and creativity requires happy employees. Research shows that people under stress, depression, pessimism, and poor health are simply not very creative. This is another part of why caring for employees is so central to making high-quality companies work.

A third requirement is that you protect your innovations, which can be done via speed to market, secrecy, and intellectual property law. Apple is notorious for the lengths to which they go to achieve secrecy. Employees working on yet-to-be-released products have to pass through four layers of security doors to get to their offices. Some emails are sent with identifiable patterns of spaces so that if the message leaks out, the perpetrator can be pinpointed. Apple also applies for dozens of patents each year. It’s harder for smaller companies to maintain a patent portfolio, so secrecy and speed to market are key.

The last requirement I will list (though there are probably many others) is the ability to focus on a narrow and exclusive set of products. Apple has an exceptionally small number of product lines; Steve Jobs has said that he is just as proud of the products he decided not to make as he is of the ones that actually made it to market. Patagonia similarly found that they had to simplify their product line to be profitable. Making high-quality products is difficult and time-consuming. The fewer products there are, the more time can be spent improving each.

My goal here is not to show that these companies are essentially the same; they have many important differences. Still, it seems that the decision to focus on high-quality products has implications for many aspects of a business’s operations and culture. Traditions and common wisdom from the wider business world may well be counterproductive for companies focused on quality.

If you run a company, make sure you understand your priorities.

“If the best designs are the least noticeable (helping yet not interfering), the real challenge is remembering that design is important.”

-me, just now

In grad school, I thought there were two types of advisors (and managers):

• “hands-on” advisors, who check in with you every day and are closely involved with the details of your work
• “hands-off” advisors, who are available for help and advice when you need it but don’t actively involve themselves in your work.

I experienced both types of advisor, and my theory was that you should go with the type that better suits your own personality. Anecdotally, students who tend to procrastinate do better with a “hands-on” advisor pushing them every day, while students who finish homework well ahead of time do better with a “hands-off” advisor who helps when needed and does not add extra pressure.

I’m now reading Peopleware, and realizing that neither style is really ideal. The ideal manager from that book tries to avoid applying pressure or being distracting (which seems hands-off) but spends much of their time actively trying to help their advisees succeed (which seems hands-on).

The real art of management, then (at least for creative/intellectual work), is helping other people to succeed in ways that ideally they will never even know you were involved.

This is analogous to how the best designs “get out of the way” so that the viewer does not even notice them (because they are focused on the function or content).

And really, we can think of management as the practice of designing an effective work environment for employees. You need to get to know your “users”, understand costs and benefits, solicit feedback, and iteratively improve the design of this environment.

I think Steve Jobs understood this, and was interested not just in designing products but in designing the company itself. It remains to be seen how well he succeeded in this latter pursuit.

Just one of many things an iPad can be.

Dear Editors,

I write regarding a recent article about education reform politics.

There is an entire discipline of professionals who study what works and what doesn’t work in education.  They have done research for decades in every state and all over the world, and they largely agree about what improves student outcomes and what doesn’t. I am talking about education professors, people with PhDs studying schools, teaching, and learning.

In your lengthy article about education reform, and in the larger conversation about these issues, the people who actually know what they’re talking about — education professors — are not consulted or quoted.  Instead it’s just a bunch of donors and politicians with “opinions”.  Can you help us move towards a more fact-based conversation by interviewing the experts the next time you report on education reform (or really any issue)?

Robin