The Nebulous Kingdom

Business Ethnography

2/19/2014

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I've always found Steve Jobs to be an interesting fellow, and of all his repeatable aphorisms, I most often quote the one about the dots always connecting when you look backwards.  It's a curious thing that life is so path-dependent, particularly when you think of the narratives that we tell ourselves about how our success is based on our own effort, or what-not.

When I look back, I see a series of learning moments that arose sometimes incidentally but that shaped my life today.  I used to be afeared of freeways and driving in general, but living in LA and having a car-loving boyfriend when I was 19 inevitably forced me to become reasonably competent behind the wheel.  I learned how to manage risk by sneaking into local casinos at 17 to play California No Bust blackjack with my cousin, or sometimes the driving-distance Indian reservation with friends.  My first brush with entrepreneurship was as an assistant to a flamboyant local artist and grantwriter, building her a successful at-home business on her sunny Topanga Canyon estate.  I learned how to drive a forklift and run a call center at my first job after university, how to manage a team and give feedback, how to hire and fire people who were older than me.  At that job, I was given a photocopy of a New York Times article about a young, relatively unknown economist at the University of Chicago, named Steven Levitt.  On the basis of that article alone, I made UChicago my top-choice business school and embarked on a revelatory intellectual journey.

At my first job after business school, I asked to study markets - odd markets some of them - precision machining in aerospace, wastewater treatment equipment, health products for baby boomers, maintenance and management of clinical technology, senior living facilities, raw materials used in valve manufacturing, the future of the healthcare system, and so forth.  From far away, say in business school, each market seems alike - you think in terms of patterns so you can wrap your mind around it, that one is a traditional manufacturer, this one is a capital-intensive business.

But what I've learned over the years is that each market is like a person.  It has its own fingerprint, its own flavor, its own personalities.  An executive at a valve manufacturer doesn't see other manufacturers as its competitors - it sees only two other companies and it knows their history and skeletons and the dust on their skeletons.  There are family businesses and families working at different competing businesses.  When there's a move, it's like moving a stalk in a mountain of hay.

These differences are meaningful.  Did you know that there are virtually no third-party aftermarket provider of major parts in wastewater treatment equipment, and that OEMs have a vise-like grip on the market?  Or that parts and services can be up to 50% of the revenue for a manufacturer?  Or that the main barrier to cellulosic ethanol are the prohibitively expensive price of cellulosic enzymes that can break down tough cellulose?  Or that the reason why the experience at skilled nursing facilities is so poor compared to continuing care retirement communities is because skilled nursing is subject to the vagaries of public reimbursement policies?

If you're going to be in this business, you're going to have to respect these differences.  What's that old saying about how if you can't see the sucker, then the sucker is you.  Business ethnography takes time and patience, and good listening skills, and even better note-taking because you're going to forget most of what you think you've learned.  It also takes the ability to absorb rejection, turn hostility into chuckling, make actually pleasant small talk, to be interested in people, to drive a conversation so it's natural, and know how to come up with good questions.

It's incredibly rewarding though.  As one of my business school professors used to say, if you're doing it well, it's like putting an X-ray over an entire industry and be able to put your finger on the exact spot.
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Cloud Atlas & Leadership

2/9/2014

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I woke up this morning feeling like I had dreamt all night of Cloud Atlas.  We had stayed up late last night watching the movie.  I'm probably in the bottom tenth percentile in both being a movie buff and awareness of pop culture but I had run across some blog post that mentioned in passing the utter strangeness of this movie and of course I had to see it.

The movie was, without a doubt, deeply strange across the board but the narrative that my mind kept lingering upon was the one around the Korean clone Sonmi-451 who was built to be a disposable server in a diner, and who ultimately (and briefly) steps forward to be a catalyst for a new world and is captured and executed.

Free will and the extent to which we have any is a recurrent theme in the movie.  I know of people that would say that we are driven so much by our DNA and biochemicals and environmental factors out of our control that we are actually animals, whether or not we'd like to admit it.  The story of Sonmi-451, the perfectly cloned entity bounded by DNA and environment, helped me synthesize this - that it's not about how much free will we have, it's that we have any.  In even the tiniest microfraction of the opportunity represented by free will, we have infinite choice and it's that choice that makes us human.  

The willingness to exercise that fundamentally human capability is a defining characteristic of leadership.  I've been thinking a lot about leadership lately, examples of both triumphs and failures, how powerfully it affects the people around for better and for worse, and the relationships among leadership, choice and truth.

Leadership is a word that is thrown around so much that it seems like everyone gets their own definition - executives are often asked as a softball question in interviews, "How do you define leadership?"  To me, that's like saying, "How do you define truth?"  As Sonmi-451 says, "Truth is singular. Its versions are mistruths."  

Leadership to me is  specific - it is the ability to build confidence (and reduce perceived risk) in others so that they can make their own choices in the context of risk and uncertainty.  Leadership is about the choices that an individual makes to enable and empower the choices of others.  At the core of it is truth-based trust-building, based on both competence and values.

Here is what failures of leadership look like:  Lack of a shared vision that would enable decentralized decision-making made in lockstep.  Unwillingness to commit to well-defined priorities resulting in suboptimal resource allocation decisions.  A disjoint between the words of leaders and their actions-choices.  An evident gap between what a leader knows and the reality of the situation on the ground.  A leader that needs to be managed.  Neglect.  Low levels of responsiveness, sometimes pervasive across the organization.  Perceptions of unfairness.  Politics.  Implicit acceptance of behaviors that contradict expressed values.  Situations where it's not comfortable to speak up.  Frequent decisions made on power, out of protocol.  Problems are pushed down in the hierarchy, rather than raised up.  Leaders who offload risk to their teams rather than taking it on or serving as an umbrella.  People going to bed at night feeling bad about their jobs. 

But leadership isn't only something that people with titles do.  If leadership is about choices that enable the choices of others, and we have even the smallest iota of free will, then we can all show leadership.  We can make it so people don't go to bed feeling quite so bad about their lives.  In these small spaces, we are God.

You need more leadership when times are uncertain, when you're doing uncertain work and the ground is shifting beneath.  And look around - anyone that doesn't think we are in uncertain times has had their head stuck in the ground.  The folding in of the technology advances of the past two decades into the investments of large enterprises will be enormously disruptive.  Rising income inequality are rewriting the social contracts, and the education debt we've built up over decades of mismanagement of public primary and secondary school systems is coming up for payment.  The very nature of money - the currency of the untold trades that have created virtually all wealth in the world - is being redefined.  We need leadership more than ever.
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    I'm interested in uncertainty, time, trust, consistency, strategy, economics, empathy, philosophy, education, technology, story-telling, and fractals.
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