By Charles in Management — Nov 15, 2017

General Management, Session 3

Engineers and Artists.

Values, ambitions, thoughts, and beliefs vary significantly among people you work with. Understanding how their brains work helps you and your team get more done. To explore this further, we will look inside the heads and hearts of the Artist and the Engineer. We will talk about how to manage the various super-powers and deadly risks of a diverse team.

Slides from today

Assignment

Course materials

MacKenzie, chapters 1, 2, and 3.
“Cognitive Distortions of Founders,” video on harrisonmetal.com.
“Thank you Kahneman & Tversky,” video on harrisonmetal.com.
“Harriet Tubman, Hero of Capitalism,” video on harrisonmetal.com.
“Drake’s Equation,” video on harrisonmetal.com.

Orbiting the giant hairball

Orbiting is responsible creativity: vigorously exploring and operating beyond the Hairball of the corporate mind set, beyond “accepted models, patterns, or standards”—all the while remaining connected to the spirit of the corporate mission.

To find Orbit around a corporate Hairball is to find a place of balance where you benefit from the physical, intellectual and philosophical resources of the organization without becoming entombed in the bureaucracy of the institution.

To be of optimum value to the corporate endeavor, you must invest enough individuality to counteract the pull of Corporate Gravity, but not so much that you escape that pull altogether. Just enough to stay out of the Hairball.

Through this measured assertion of your own uniqueness, it is possible to establish a dynamic relationship with the Hairball—to Orbit around the institutional mass. If you do this, you make an asset of the gravity in that it becomes a force that keeps you from flying out into the overwhelming nothingness of deep space.

But if you allow that same gravity to suck you into the bureaucratic Hairball, you will find yourself in a different kind of nothingness. The nothingness of a normalcy made stagnant by a compulsion to cling to past successes. The nothingness of the Hairball.

Artists and Engineers

One type of person working in a text editor, building software, devices, machines. Operating in rational, analytic side of brain most days.

The other type working with color, shape, emotion.

How do these things go together (or don't)?

Who is your favorite Engineer?

What makes her/him special?

Chris, thoughtful, empathy, wanted to tackle the difficult problems

Colin, he was incredibly detail focused and could effectively communicate problems and what he was doing.

Mine is Lynn. She was so creative and really understood how the tech and the business worked together to make the users successful.

RVP—the nicest person (not just engineer). Willing to listen to any idea, a great collaborator, and able to solve difficult problems with a great attitude.

Ross - organized, detail oriented, kind

Bill, open and willing to listen AND teach

Ryan, awesome communicator, big picture view of problems, creative problem solver

Knowledge of tech domain
Do what it takes
Humble communicator
Learner
Can say no, + why
Fearless
Optimism
Thorough – "Sharpening the axe"
Trustworthy -> increases speed
Mentor
Spend time with people
Quality

All are qualities that we aspire to in general. Most relate to how they get their work done, the personal and interpersonal spirit they bring to work, the human character traits.

Who is your favorite Artist?

What makes her/him special?

We can fill it out, but it will look the same as the Engineer board. The artists you love are fearless, optimistic, thorough, trustworthy, love to learn new stuff, help other people get there too – it's the same list.

The syllabus is a trick – it's not about managing engineers OR artists; it's about managing humans.

Let's peer inside the human "black box"

The Engineer and the Artist are alive and well in all of us.

Five idea sprints to find the places of leverage in human systems.

What causes incredibly talented people to stumble in our hyper-growth, no-time-to-waste industry, is the human systems interactions. Every one of the mushroom clouds that come out of our industry are because of human systems failures, not poor technical execution.

Christina Hedberg: This is so interesting b/c when you are meeting people in the professional realm they always want too know your domain expertise. Almost like what box to put you in. If you described yourself in the terms of what is on the board, you will lose most people.

Brittany Stich: We briefly discussed the intentionality of the word choice “favorite” engineer/artist. If the question were “best,” the answer may very well be different for some.

Idea sprints

Ideas from people from very diverse backgrounds. None were general managers.

Beck: Understand self-image, world-view, and future expectations
Tubman: Scale your impact with shared-value-alliances
K&T: Solve problems using intuition and rational analytics
Ostrom: Face-to-face self-governance of common pool resources
Drake: Frame complex systems so everyone can participate

Idea 1: Aaron Beck's Cognitive Behavior Model

Was taught in school that there is a very fixed and rational way people make decisions in personal and work life:

Gather information
Make observations from that data
Put through rational processor where they churn through, make conclusions
Form action plan based on those conclusions
Execute actions

Aaron Beck did work with depressed and anxious patients showing how flaws that linear rational processing model is. Spent thousands of hours interviewing people whose mental illness crippled the way they lived.

He was intrigued by the idea that their thoughts worked against them – the way they gathered information, drew conclusions, planned actions was detrimental. Although the steps were real, the people paralyzed by their illness had filtered lenses between each step, bending and shaping and coloring their interpretation of the information and deciding what action plan to take.

It boils down to their world-view, their self-image, and their future expectations. And if he knew those three things about a particular person, he can start to unwind some of the unproductive thoughts, start to change the trajectory of the bad actions.

A depressed or anxious patient might have reported to Beck, I am unlovable and I will die alone, so life isn't worth living. Why do they feel that way? Because someone canceled plans? Let's challenge that thought – someone cancelling plans could have been for a different reason than you are an unloveable person.

This happens to all of us. Some of us have bigger filtered lenses than others, but everyone is walking around with these things.

What does this have to do with general management? It's the key to great colleagueship. It's our moral imperative to treat everyone as human beings, not rational processing robots.

Beck’s model helps us understand, influence, and “nudge” conclusions and actions.

🃏 Build Your Deck: Beck's Cognitive Behavioral TheoryShock Absorbing the DistortionsNote the “lenses” or “filters”Pause to examine / challenge conclusions and actionsOffer alternative conclusions and actions

Our own worldview

How does the world work?
What does the future hold?
Who am I?

1:1 Life story conversations

Tell me about your favorite teacher from school. Why was s/he so good?
What was it like in your home town where you grew up?
What did you do in the summers during college (or high school)?
Have you ever fantasized what you’ll do when you retire? Tell me about it.
What do you imagine will be your last job right before retirement?
When you started reading for fun, what books left a mark on you?
Tell me about a project you worked on that was a “wow!” moment at work.
Can you tell me about a colleague that you did not enjoy working with?
What work or personal accomplishment are you most proud of?
Tell me about a time when you had to deal with a big setback in your work life. How’d you get through that?
What mattered to your high-school-self more than anything else?
If you had to pick a new country to live in, which one would it be? How come?
What’s the best trip you’ve ever taken? What was so good about it?
Tell me about a time when you stuck up for something or someone.
If you could give advice to your ten-year-old self, what would you say?
Who’s your best colleague of all time? What was special about her / him?
How do your closest colleagues describe you?
You know how some companies have “Our Values” posted around the office? If you had that for yourself, what would it say?
What’s the biggest work project you’ve ever been a part of? What went well? What didn’t?
Why do you care about your work so much?

What can we do to amplify our superpowers?

Our worldview gives us a set of traits, expectations, self-image – and can give us superpowers. What actions can we take to amplify the effect of our superpowers to deliver value to people around us, our company?

Where do we need to put shock absorbers?

How does my world work? What are my future expectations? What shock absorbers do I need to put in place to mitigate my risks, to protect my self-image, to ensure my expectations can be met?

e.g. for a worldview who believes that people are basically good:

What are the benefits? Will build great relationships, inspire people, optimism for positive change.
What are the risks? People can take advantage of them, exploited, unrealistic expectations of others.
What are shock absorbers? Get input from close people you trust, validate your ideas, put terms in a contract for resolving disputes, figure out how to make sure other people do what they say they'll do, interact with an intentionally cynical colleague to have more balance in life, have a safety net nest egg so you have financial protection even if things don't go well

1:1 meetings

If I know you as a human being – as a colleague, as a manager – I can help you consider and put in place your amplifiers and shock absorbers. Through 1:1 meetings we can begin to do this, and come up with an action plan to help them be successful.

Take a little pinch of Beck, his best observations, and sprinkle it in the mix. Accept the premise that people are complex stews of emotions, cognitive filters and distortions; don't treat people like robots.

🃏 Build Your Deck: 1:1 Meetings

What if people take feedback negatively?

Brandon: During 1:1’s where I am delivering feedback or trying to figure out why that person did not complete a task the colleague feels inadequate and overwhelmed. Seems like this keeps happening when working with early employees at startups. How can I deliver feedback without triggering these emotional beliefs?

Michael Dearing: Do you see anything in their world-view or self-image that might be the root of the emotional reaction? Are they afraid of being fired? Are they unfamiliar with the idea of missing a goal? Perhaps they are unable to conceive of “redesigning” the work process (black box) or the OKRs to understand the miss. If you can identify the underlying source of the fear you can start to unwind those beliefs and fears.

Michael Dearing: There’s an underlying assumption in his or her mind that needs to be challenged and replaced.

Michael Dearing: Another antidote or shock absorber is a shorter time horizons on OKRs. So you have more at bats per month or quarter.

Idea 2: Harriet Tubman's Scaling

Conductor of the Underground Railroad in 1800s America, helping slaves navigate to freedom.

As a slave, being "rented out" to other plantations helped her with her countryside knowledge and armed her with information on safe houses and routes in the Underground Railroad. Ended up walking out of her plantation, due North to her own freedom. Subsequently went back down 13 times, rescued over 70 slaves.

Tubman recruited more conductors than anyone else in the Railroad; taught entrepreneurship classes to camps of freed slaves to teach how to start a cleaning business, etc.

Later in life, was the first African-American spy for the US government – pistol in pocket, walking around the South with $15k in her pocket (hundreds of thousands of $ today), gathering information about the Confederacy and reporting back to the Union.

“Pass the bearer, Harriet Tubman, to Beaufort and back to this place, and wherever she wishes to go; and give her free passage at all times, on all Government transports. Harriet was sent to me from Boston by Governor Andrew, of Massachusetts, and is a valuable woman. She has permission, as a servant of the Government, to purchase such provisions from the Commissary as she may need.”

From being a super high-paid spy, cooked up the idea with another Union military leader to sail a steamboat to slave plantations in the middle of the night, stealing every slave they can get. Needed armed support, so brought with her the First South Carolina Volunteers, 100% made up of freed slaves.

Steamboats tooted their horn; 700 men, women, and children came pouring out of the houses. They squeezed every one of them onto the boats, and in just that one night, she rescued 10x as many people as she did as an Underground Railroad conductor.

What does this have to do with business? Many companies try these days to pour gasoline/resources onto a bonfire – without any thought for whether it would actually work or if it is sustainable long term.

Easiest for VCs to throw money at a problem (spray and pray) – they have a portfolio and only need one of us to be successful; doesn't have to be us specifically.
Trillions of dollars of wealth accumulated over the last tens of years looking for a place to go

Need to put up our hand and say, this is stupid growth, not smart growth.

When you are small

You own values
Quick wins build trust
Recruit small numbers of allies to build small networks
Establish a playbook
Repeat in small batches

When you get bigger

You get trusted with other people's money
You get to borrow their skills
Trust becomes a broader reputation
Networks can be morphed into armies
Teach the playbook
Process huge volumes

🃏 Build Your Deck: Harriet Tubman's Scaling
Resist the temptation to just pour gasoline/resources onto a bonfire to try to make it bigger. Think about Harriet Tubman and how you can carefully 10x it.

Idea 3: Kahneman and Tversky's Systems 1 and 2

System 1: Fast and prone to errors
System 2: Careful checker, more thoughtful and slow

Kahneman and Tversky described a compound cognitive system, where intuition and reason operate together:

Intuition (S1)

"Trusting plausible judgment"
Fast (like perception)
Automatic (like perception)
Quickly accesses prototype answers and suppresses uncertainty
Low processing cost, low cognitive load
Prone to errors

Reason (S2)

Careful, based on doubt
Slower, more effortful
Accesses stored analytic techniques and methods
Higher processing costs, higher cognitive load
Good at monitoring S1 but only if prompted to investigate

K&T for managers

Everyone makes decisions in two big steps:

Bounce situation off their intuition (S1)
Call on stored analytic techniques (S2)

"I don't know what to do in this tricky situation."

S1: "My gut says it's..." – based on first principles, past experience
S2: "I need to think this through rationally." – based on stored, accessible analytics

Example

User activity is down 50%.

What does our gut say?

Systems are down. We had an outage.
There's nothing exciting to come back to.
We're a bad fit for their problems.
Everyone's on vacation. Seasonality.
We guessed wrong on what our customers want.
Our competitor is to blame.
We stopped advertising.
Poor design.
Logging bug. Flick the needle. Everything is fine.
Bad forecasting.
Marketing made a bad plan.

Everyone is going to have an S1. As a general manager, get it all on the table right away so you can start peeling apart the S2 plan.

Take the people who cluster around bad forecast, get them to spend 90 minutes to dive deeper, come back with more data to brown bag lunch.

Same with logging bug, with competitors, etc.

Example 2

Engineering reports that a key initiative is going to ship a month later than planned.

What does our gut say?

Poor planning
Overcommited on roadmap
Engineers forgot to say no
Scope creep. PM and designers added new things
New tech staff
Didn't know had to rearchitect
Communication breakdown
Something went sideways
Someone had to go on personal leave

Where does it work?

Have worked at many companies in the past where problem arises, manager pulls a couple people to "take it offline", tells everyone else not to worry about it. This can become toxic – if you don't talk about the gut, the gut gets whispered around and people start talking crap about marketing, about devops.

When you need desperately to tap the intellect of the people on your team, call everyone together, get their gut feeling, then form squads to dive deep into analytics, use their brain.

🃏 Build Your Deck: Kahneman and Tversky's S1 + S2

Where does it break down?

If you do this with every small issue, it'll waste too much time. Threshold has to be reasonable – has to be material, has to really matter to call everyone together for a gut check.

Rough one to use on interpersonal situation where there aren't metrics we can use. But can we shock absorb this process to deal with a messy interpersonal situation?

Sample the S1 on 1:1s. Don't have to call a town hall asking why X and Y hate each other. I've observed this is going on; tell me your gut on this. What's the root?
- If you're not willing to do this 20 times, then it's not a big enough problem.
Have a clearly unbiased moderator leading this, ask X and Y to think about it rationally.

Idea 4: Elinor Ostrom's Common Pools

Nobel Prize winner who came up with alternative solutions to the Tragedy of the Commons.

Tragedy of the Commons

When more people have a shared resource, then people are more likely to overconsume the source and less likely to take care of it.

No one has a stake in the health and wellbeing of the pasture, and everyone has an incentive to overgraze it. All of the wealth comes to each sheep owner; none of the cost of the commons being depleted comes to him/her.

Elinor Ostrom's advice

Common thought at the time was that there were two solutions:

Privatize the commons
Owned by public sector; government owns and operates the commons

Elinor traveled the world, looking at commons – forests, lakes, fishing grounds. Documented thousands of cases of how common pool resources were managed by local communities. Found example after example after example of little groups of people who self-governed, organized mechanisms to decide and communicate the rules.

Found patterns in the common pools that worked:

Regular human interaction – people who know each other and work together often can self-govern many common pool resource problems
Make violations of shared rules visible – people need to know how others behave
Allow reputations to accumulate – long-term good actors build trust; bad actors can redeem selves

These common pool resources lasted a lot longer, kept in better condition, and level of strife in those communities was kept way lower – because people in the small groups themselves were incentivized to take care of it.

Ostrom: There is no reason to believe that bureaucrats and politicians, no matter how well meaning, are better at solving problems than the people on the spot, who have the strongest incentive to get the solution right. Unlike bureaucrats, they bear the costs of their mistakes.

In companies

How are we going to manage the product roadmap? (the biggest common pool resources we all share – none of us own it, rarely centrally controlled by one person)
How will we make the communal kitchen work?
What about colleagues' time?

Before we go thinking that bureaucrats or central commanding control for a single capitalist owner is the only way to share a common resource, there are some ways to do it hygenically and organically.

Open product roadmapping can help: inputs, process, and outputs of product development process are documented so everyone can see.

Can institute guidelines and practices for using a shared kitchen.

How do you make violations of shared rules visible?

Blameless post-mortems: stick to the facts, no editorializing (this happened, then this happened); talk about how we felt at the moment rather than the reason for that feeling
Clear, transparent reporting: at the end of the cycle, we will report exactly what was accomplished and what resources were consumed. No shame in it if everyone knows it will come.
- Publishing travel expenses per head by department
- Making sure that you tell people in advance how it’s being tracked and reported is key to avoid shaming later.

🃏 Build Your Deck: Elinor Ostrom's Common Resource PoolsRegular human interactionMake violation of shared rules visibleAllow reputations to accumulate

What if someone consistently gets their way by being a bad actor?

Are the consequences of being an asshole too low? Need honest 1:1s: You're an amazing product manager, but you're alienating all of your colleagues because you're a resource hog. This is where you're going to top out in your career. If you want people to want to work with you in the future, you'll have to change.
Come up with OKRs. Some kind of efficiency measure saying they can't consume more than X engineering hours in the next roadmap. Their personal NPS score needs to be a 70, and their NPS raters will be the 9 people on their team.
Tight feedback loops are necessary in performance reviews.
Might have to fire them. The choice depends on where in the cube they sit: if they're a hog, working on the wrong stuff, and everyone hates them, then it's clear they gotta go; if they're anywhere else in the cube, can decide what to do separately.

Don't underestimate the social cost of bad behavior among peers. It is deadly.

Public composting

Teams that work together over time need a safety valve to let out bad feelings – in a way that's not shaming, that's celebrating the act of self-reflection.

"I failed to ___."

"I observed that ___."

"Next time I might try ___."

What happens when you do that week over week over week? The team builds a shared experience that's not just parties/milestones – it's making a ritual out of reflection.

It's self-correcting – you know how to improve, and you've said it publicly so you are incentivized to commit.

It's OK to talk about it. We're actually trying hard things. If we're doing OKRs right, there's a 60% probability we're going to hit them all – which gives us a lot of room for public composting, for blameless postmortems.

🃏 Build Your Deck: Public Composting

Idea 5: Drake's Equation

Michael Dearing's article

National Radio Observatory in Green Bank, West Virginia – no one would ever go there. Why is it even there in the first place? Robert Byrd, the senator, secured funding and pushed hard for it.

In the 1960s, people started to figure out that radio signals weren't just a good communication method for Earthlings, but that we're also sending them out across the Milky Way. Could we detect signals coming from outside our planet as evidence of extraterrestrial life?

Frank Drake organized a conference to talk about extraterrestrial life. Ended up creating an equation:

N = R^* ⋅ f_p ⋅ n_e ⋅ f_l ⋅ f_i ⋅ f_c ⋅ L

N = number of civilizations in Milky Way
R^* = the average rate of star formation in our galaxy
f_p = the fraction of those stars that have planets
n_e = the average number of planets that can potentially support life per star that has planets
f_l = the fraction of planets that could support life that actually develop life at some point
f_i = the fraction of planets with life that actually go on to develop intelligent life (civilizations)
f_c = the fraction of civilizations that develop a technology that releases detectable signs of their existence into space
L = the length of time for which such civilizations release detectable signals into space

Everyone in the conference could contribute – chemists could contribute to one or more of the constants; physicists could do the same. You can follow along with all conversations at the conference thanks to the Drake equation.

Ebay's Drake equation

Michael Dearing had the worst category manager job on the planet at Ebay – started out in real estate, really backwater category. Every Monday, would get a dump of data from production in a file and try to sort through it, without knowing what to look for. Was suggested to talk to Pierre (Omidyar), who gave him a simple equation to understand the messy, complex, horrible system:

Revenue = B ⋅ f_a ⋅ n_i ⋅ f_s ⋅ p_i ⋅ r_ebay

B = Number of buyers
f_a = Fraction of buyers who are active
n_i = Number of items buyers bid on per month
f_s = Fraction of bids that are successful
p_i = Average selling price per item won
r_ebay = eBay's take-rate per item % of value

Michael Dearing: The thinking behind Drake’s Equation gave me and my fellow general managers at eBay a common way to describe our revenue. eBay revenue = gross merchandise sales x our take rate. Gross merchandise sales was just the number of listings x the fraction that were successful x the average selling price (ASP) of the items. You could refactor the equation to look at active buyers, active sellers, or a combination. The point is that all of us — whether in engineering, marketing, trust and safety — could understand the variables that drove business results.

Wherever there is a messy system, you can use Drake thinking to simplify. Open up any complex problem to all colleagues: Marketing, Sales, Product development, Engineering, Hiring, Talent development...

Generic Drake equation

Revenue = U_p ⋅ f_a ⋅ f_t ⋅ f_r ⋅ U_$ ⋅ L

U_p = Universe of potential users
f_a = Fraction aware
f_t = Fraction who try
f_r = Fraction we retain
U_$ = User spend per month
L = Lifespan in months

Doesn't have to be revenue focused – as long as you can put a quantitative measure on it, you can Drake Equation it. Just identify the main output metric of the department and go from there.

The one slide that changes everything

Combine your custom Drake equation with:

OKRs under each of the variables
The people responsible for each OKR

Your whole company on one slide.

🃏 Build Your Deck: Drake's Equation
It’s so important to offer people a simple mental model for the business so that they can see how it all fits together – because there is no way that you can hold all the complexity in your head.

Email Michael (md@harrisonmetal.com) if you ever want help creating your own custom Drake equation.

Summary

Beck: Understand self-image, world-view, and future expectations
Tubman: Scale your impact with shared-value-alliances
K&T: Solve problems using intuition and rational analytics
Ostrom: Face-to-face self-governance of common pool resources
Drake: Frame complex systems so everyone can participate

General Management, Session 3

Assignment

Orbiting the giant hairball