EclecticLip

In The Responsibility Virus (volume 20 of the book club reading list) Roger Martin discusses the tendency of Boards of Directors to become powerless yes-men, when faced with a domineering CEO.  This is in contrast to their intended role as wise greybeards, advisors or even coaches who keep the Chief Executive on the sraight and narrow.

This seems vaguely analogous to what happened to the Roman Senate as their Empire declined; instead of keeping the Emperor in check, they had to curry favour for fear of their personal safety (and probably family fortune, too: I imagine more than one Senator got his possessions confiscated).

It would be interesting to know whether the advisory influence of large corporations’ Boards of Directors tends to be weaker at firms where the CEO is paid more.  The Wall St. Journal recently carried an article reaffirming that power corrupts; in their context, as people gain power, they act more like jerks.  Transposing this lesson historically, maybe if Marc Antony had won, Caligula would’ve ended up as a very polite cobbler…

Much has been made of emergence recently — how complex systems develop / exhibit behaviours based on the interaction of simpler individual components.  An example might be how extraordinarily complex economies can develop, through the interaction of thousands or millions of individual “agents” in an economy, buying or selling as per their individual whims.

It occurred to me that the phases of nature (solid, liquid, gas, plasma — or “earth”, “water”, air”, “fire” for any Aristotelian holdouts) are themselves emergent phenomena. 

An individual molecule can’t be solid or liquid: these stuctures require the coming-together of a bunch of molecules, either into a lattice structure (solid) or a continuous-but-not-as-ordered one (liquid). 

Gases consist of molecules floating about freely (unbonded and unconstrained to each other) but if you only had a single molecule in a vacuum… there would be a distinct lack of other atoms by which to assess which phase it belongs to.

And since plasmas are gases where some fraction of molecules are ionically charged… i imagine you need a multiple number of molecules to assess whether they could be termed a plasma or not.  (If a lone molecule was present, and it was charged, one would presumably call it an ion, not a plasma.)

I’ll check in with a physics professor on this topic.  Hopefully I’m correct. 

We read The Human Side of Enterprise recently, wherein Douglas McGregor (that’s McGregor, not MacArthur!) contained the wisdom nugget that:

“management gets the labour relations it deserves”.

I doubt McGregor coined the expression — it’s the kind of pithy phrase that floats around for years before being credited to a famous person — but it rings no less true. 

The general theme is a karmic one: if management mistreats labour, labour will eventually form a feisty union.  And contrarily, if management treats its employees well, union relations will tend to be amicable (if there even is a union).  Furthermore, while trust and respect grow slowly over time (like pearls!), bad memories have a way of lingering for a very. long. time.

In that context, I wonder if management in the West is still paying for the bad karma it earned during the Industrial Revolution.  If the explosion of industrial wealth was shared more equitably, or barons weren’t so slow to improve working conditions / recognize workers’ rights, perhaps labour unions wouldn’t've become so militantly anti-management.  Heck, maybe Marx and Engels wouldn’t've even been inspired to write their little pamphlet!

I’m perfectly unfamiliar with labour relations / extent of union militancy in other countries, but it would shock me if the Nordic economies (or Japan, with its fairly egalitarian corporate pay scales) have similarly confrontative labour relations.  After all, it’s difficult to have a class struggle if the different “classes” of employees (management, labour) enjoy reasonably equitable pay, and decent working conditions.  And I’d expect that economies with a heritage in the British Industrial Revolution tradition (US, UK, Canada, Australia) would have more confrontative unions.  After all, those union traditions would’ve been born in a desperate context of obscene wealth and even-more-obscene squalor.

So it would seem reasonable to consider militant unions a form of karma — a carryover from the bad ol’ days (correction: the very bad old days) of the Anglo economic tradition, when owners really should’ve cared more about their employees.  And given how long it can take for bad karma to dissipate, I imagine confrontational labour relations will be a feature of industry in these cultures, for a long time to come.

We came back from Toy Story 3 today — a great movie, with a dense, well-plotted storyline.  (It’s amazing what happens when you invest your money in the writers, instead of star actors!  A lesson HBO clearly learned, long ago…)  Haven’t seen the latest Shrek instalment, but that’s not material to the current web post.

One of the wonderful things about ancient mythology is how storytellers would (often) amalgamate past traditions into their current narratives.  The most obvious example in the West, is how the writers of the Christian Gospel of Matthew linked everything they recorded Jesus doing, to passages the Hebrew Bible — what Christians refer to as the “Old Testament”.  (Out of respect for the Jewish tradition, I’ll be referring to them as the Hebrew Bible.)  Virgil also meshed his Aeneid to Homer’s Iliad, by linking Aeneas to Troy.

In the East, the Ashtavakra Gita linked itself to the Ramayana by adopting as its eponymous protagonist, a relatively minor character from that epic.  Doubtless, there are innumerable other examples.

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Now, the Toy Story and Shrek franchises are really interesting in that they also build on pre-existing platforms; namely, classic toys and fairy tales respectively.  As such, they’re almost like modern “remixes” of earlier cultural traditions.  And like other “adaptive refreshings” of cultural traditions, they’re doing it in today’s dominant genre, the movie.

(images from Wikipedia)

A story caught my eye on July 7, about how IBM has a microchip assembly and testing facility — in Quebec.  (That’s high-cost-of-labour-environment Quebec — not low-cost-of-labour-environment China.)

The reason it’s able to do so, is because of the relentless kaizen (continuous improvement) practised there: they’re able to compete in what should be a largely outsourceable industry, through innovation.  Kaizen was one of the underpinnings of earlier book club selection, The Toyota Way.
 
While innovation won’t insulate you fully from arbitrage of labour prices, I think this example shows that (innovative, high-cost labour) can compete better than most people think, against (non-innovative, low-cost labour) and especially (non-innovative, high-cost labour).  Some excerpts from the article include:

The factory, 75 kilometres east of Montreal, started out in 1972 making Selectric typewriters. It has worked its way up to become IBM’s biggest facility for testing and assembling advanced microchips. Its products go into the planet’s most popular video-game consoles and fastest supercomputers…

“We don’t compete on labour rates, we compete on skill, on innovation, on time to market,” said Mr. Leduc, a veteran from the typewriter days, who was appointed last year to be a part-time adviser to Canada’s National Research Council…

While Canada’s productivity has crept ahead by only about 0.7 per cent a year during the past decade, managers at Bromont say their ability to harness the creativity of their work force has allowed some units to boost productivity by an impressive 10 per cent or more a year… 

“One of the greatest competitive edges a company can give themselves, especially these days, is getting each staff member to see their role in contributing to positive change,” Mr. Reid said. “There’s a massive difference between just doing the job and being a high-performance culture.”

Note: that emphasis there was my editorial contribution. 

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I suspect there’s a valid analogy to be made in the economic sphere.  An economy stocked with a million entrepreneurs, each trying to improve their business’s success, is probably going to do better over time than one where a small group decides what’s to be done and how.  That’s the basic difference between a market economy and a command economy (”central planning” is a case where the aforementioned small group is the government). 

The Koreas provide a great example.  As chronicled in Ha-Joon Chang’s Bad Samaritans, back in the day North Korea was richer; it was the industrial area.  South Korea exported seaweed.  Over a few decades, the South Korean government used a market economy to become unimaginably richer than its northern rival.  (Note: like virtually every other industrialized country, its government supported target industries — a practise known as indirect planning — but it let the homegrown competitors fight it out in the marketplace.)

Pulling back from global economics to the corporate level, I’d bet that — just as South Korea ultimately surpassed North Korea, despite its initial disadvantage — companies where ideas for improvement bubble up from all levels, will tend to enjoy more success, longer, than their “everybody just doing the job” counterparts.

Which sort of goes to the root of the book club.  I see it as a way I can suggest improvements, to help myself and others be that little bit more effective; speaking only for myself, I’ve got a lot of “just doing the job” years to make up for.

I recently had a chance to catch up on some podcasts.  (Much like my “not-yet-read books” bookshelf, I’ve got many a megabite of unheard podcasts on my hard drive.)  This one was a CBC Ideas episode called The Moral of the Story Is; it’s dated March 22 2010.  It starts off with Bertrand Russell’s remark that:

“Most of the greatest evil that man has inflicted upon man comes throuhg people feeling quite certain about something which, in fact, was false.”

Partway through, the narrator interviews one Dr. Robert Burton, a neurologist at Mount Zion University of California Hospital.  At about the twenty-minute mark, he suggests that the brain’s reward system activates, when one has the sense of being right — in the same way it activates when people smoke, drink, use drugs, or engage in other addictive behaviours.  Basically, feeling indignant gives you an upswell of (bio)chemical pleasure.

At about 22 minutes, there’s a wonderful exchange:

Narrator: are you suggesting Bill O’Reilly is some sort of junkie, in a way?

Burton:  I’m not suggesting.

This rings true for me.  I’ve experienced the intoxicating sense of indignant righteousness when arguing with people who were “clearly wrong”.  Nowadays, I try to maintain an unrippled calm; and temper any anger with humour.  My media habits reflect this: I used to enjoy listening to American progressive talk radio, but now tend to find it agitating, again on account of the subsurface exasperation.  Of course, that’s nothing compared to what relatively little I’ve experienced of its conservative cousin.  I prefer The Daily Show, Colbert Report and Bill Maher, as their jeremiads are leavened with humour.  Our modern jesters, I suppose.

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While Dawkins maintains his composure here, he carries a lot of anger — indignation — towards the shallower strands of various religion traditions.  If memory serves, he gives Buddhism a pass in The God Delusion; his real problem is with literalism in the Abrahamic faiths, and Christian fundamentalism in particular.  Brutish and backwards as they may be, they’re not worth tripping into addictive indignation over.  Surely other approaches are better.

Recently finished Daemon and Freedom, Daniel Suarez’ two-part semi-dystopic vision of the future.  I say semi-dystopic because they weren’t all bad news.  Loved them both, for the fact that they informed of the capabilities of computational power today — in a seamless manner that didn’t slow the action of the story.  In this feat, they reminded me of Gore Vidal’s Creation, the master’s bracing tale spanning pretty much the entirety of 5th-century-BC Eurasia.  Which, come to think of it, might be deserving of a re-read, about now…

On the surface, Daemon is a story in the “machine turns on its creator” genre.  Like “2001″.  And “Frankenstein”.  And for that matter, the Bible.    Freedom builds on this to reveal a clash between two competing visions for the future.

More profoundly, the dyad explores how our social/societal structures may change in the coming decades, based on the interplay of our current crises and the capacities of new technology.  All wrapped up in a masterful storyline.  With fiction like that, who needs textbooks? 

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note: Suarez has also given a lecture at the Long Now Foundation, well worth the invested time.  It’s available here.  Most intriguing to me was the idea that in a short time, bots will begin to outnumber humans online.  We won’t be the dominant “species”. 

It seems somehow analogous to the apparent fact that mutual funds outnumber stocks, in the investment sector: the derivative species (bots, mutual funds) ultimately flourishing more than the original species it interacts with (humans, stocks).

I was recently told that two local behemoths — BC Hydro and Best Buy — brought consulting firm Accenture in, to run their IT groups.  The idea is that Accenture’s expertise will enable them to provide the IT function cheaper than the two aforementioned behemoths would be able to, even with a profit margin.

This immediately made me think of mitochondria, the “engines” of living cells.  The thinking is that a couple billion years ago, advantages accrued to cells which had assimilated / “swallowed” mitochondria: the latter were very efficient at generating ATP, a chemical used by the cells for energy.

In the corporate analogue, BC Hydro and Best Buy would be the host cells, and Accenture (or other outsourced IT service providers like IBM) would be the mitochondria.  The key measure is whether the aforementioned firms do indeed enjoy advantages through this activity — or whether they decide to return to the DIY path, down the road…

Innumerable sources talk about how peer recognition matters for more people than money… though the latter itself has some importance too.   

I imagine that at most companies, pay is assigned at approximately market levels based on the responsibilities incurred.  As such, CEO pay tends to drift higher than junior engineer pay, because the market has been assigning a higher value to the former — despite the many examples where this has proven incorrect. 

For their part, markets are mechanisms for establishing the price of a good through transactions, based on perceived value of the participants.  If not enough buyers feel a banana is worth $3, they will tend not to buy until the price drifts to levels they’re willing to pay; if not enough sellers feel a banana is being properly valued at 3 cents, they will tend divert their productive elsewhere, until the price rises. 

If we call the grouping of people in a market “peers” we could easily say market prices are a peer phenomenon — a peer assessment of value of the service / good in question, such as a year’s worth of junior engineering time.  Market prices are a form of peer recognition-of-value, or to be more precise, peer perception-of-value.  Presumably , if Ahab makes more money than Baal, that means he’s perceived to be more valuable.

In which case pay serves as a proxy for peer recognition (how you’re recognized among your peers, and/or by your peers, depending how hierarchical one’s firm is).  Which would go a long way towards explaining why it can be such a sensitive subject…

Like many Canadians, I regard the current Conservative government with a suspicious distrust; enough that after the 2008 election, I began donating money to the Liberal Party of Canada.  While my thinking leans leftwards of theirs, they remain the most viable less-conservative alternative in the near term — hence my “remittances of convenience”, to borrow from the marital phrase.

But the Liberals are stuck in a catastrophic polling funk – and their misery is continuing in respiteless fashion.  Furthermore, on a variety of issues, Liberal Party leader Michael Ignatieff seems about as conservative as Stephen Harper.  Born into the elite, Ignatieff doesn’t seem to connect with voters.  In contrast, the Prime Minister, hardly a man of charisma himself, seems to manage adequately, despite also being born into privilege (his dad became an oil executive).

As such, I wonder whether Michael Ignatieff is the John Kerry to Stephen Harper’s George W. Bush — a challenger indistinct enough from the incumbent, without the rapport / messaging advantage to pull out a victory.

Time will tell.