organization and confusion

A company is organized the way it is for many reasons:

• execution
• strategy
• marketing
• executive ambitions
• legacy
• etc.

It's all a trade-off, not necessarily built around effective choice architecture.  Each individual org may help drive bad decisions for the company, but that are good for individual decision makers.  e.g. empire building, or agency problems or local optimum instead of global

It's sort of textbook, but I see it all the time, especially in market modeling.  Specifically it is very common to see groups that model markets in a fashion that mirrors their own organization structure, rather than reflecting how customers make purchasing decisions.  They practice inside-out market definition.

Good market intelligence requires understanding the buying behaviors of your potential customers.  Market segmentation means grouping those customers into categories based on salient similarities with regards to your product offerings.  For example, you might segment your customers according to price sensitivity.  For example, you might segment them according to how much they value certain different features your product offers.

This is called outside-in market segmentation.  It helps you to understand how well your products will play in the market.  Coupled with projections about the size of those market segments you can start to put together a business model.  With time, smart companies reorganize themselves so that their corporate structure reflects the reality of customer segmentation in the world.

If you try to cram your customers into groups that fit how you run your business instead of trying to run your business so that it fits the needs of your customers...

Scrapping the code and starting over... and also the Trump budget proposal

If you've ever developed a software product that needs to live through multiple versions and over many years, you've probably experienced this situation.  For that matter, if you've ever used one, you have experienced it.  That includes everybody, since Windows is a good example.

Your software starts out with a purpose.  It has a crystal-clear goal in mind.  If you're any good, the software does that so well, that people want to do related things, too.  So the software starts to expand.  Also, bugs happen and so you start fixing those bugs.  Bug fixes and new features start piling up.  Eventually you start getting unintended consequences.  A new feature here causes a bunch of bugs over there.  A bug fix here disables a feature over there.  Was anybody using that feature?  Who knows, let's ask.  Did we ask the right people?  Whose opinions matter when it comes to the bugs we fix first?  Who should we ask which features to add next?  We have to start deprecating some stuff because the code base is too big and too messy and has turned into a hairball.  What do we deprecate?  We need version control and a change committee and and agile process and now we have people whose jobs are just to manage those things that often have no idea what the software is even supposed to do.  It spirals out of control until you have Windows 10.  Or until you have a typical Fortune 50 company (this is one of my favorite books on this topic), or you have the US Government.

With software, you eventually have to scrap the whole thing and start again from scratch.  This really works great if you have the same team in place and they can apply all the learnings and wisdom they have accumulated while putting together the previous version.  This is why we usually start with a quick, disposable prototype for any new idea.  We know that our first pass will need to be scrapped, so we just start out trying to test out the concept and the rough structures.  The goal for a first draft is never to create an enterprise-level software product that will withstand the ages.  The goal is to see if it's worth building an enterprise-level software product at all.

So what does this have to do with Trump's budget, you ask?

CNN Article
USA Today Article
Bloomberg article

The Bloomberg article has this great infographic:

In it we can see that many government agencies are getting serious cuts.  In a very real way, many programs are getting scrapped.  Now, I understand that the administration's purpose here is most likely not "those were prototypes, let's take the learnings we have accumulated and build a better system from scratch" but that may still be the outcome.  We can only hope that the next administration will recognize that these endeavors (feeding the elderly, protecting clean air and water, PBS and the arts, school lunch programs, science, space, housing, etc.) are meaningful and important enough to build new, better, v2.0 agencies in a few years.  Maybe they will all be sort of like win95 compared to win 3.0!  maybe?  right??

It's sort of curious that some of the agencies that Trump has been most vocal in deriding --namely the VA and the military-- are the biggest beneficiaries of this shift.  It's a shame that these two groups will not have the opportunity to experience as radical restructuring and tabula rasa sort of rearchitecture.  As somebody who has experienced both of these organizations first-hand, I think that the opportunities for waste reduction are legion...

A quick data visualization, fat with implications

I whipped this up last night.  I will refrain from comment, but please tell me what you think...

A "natural leader"

What is a "natural leader"?

I got to thinking about this the other day while considering my two older boys.  They are just kids, and like anybody they are complicated and multi-faceted individuals.  For the sake of this example, I'm going to just treat them as simple stereotypes.

Jack is my older son.  He is naturally charismatic and has a large group of acquaintances and friends.  He charms children and adults with his easy style and effusive character.  Other kids naturally follow his example, want to play games that he devises and generally look to him for leadership.  At the same time, Jack is not very concerned about others.  He is often dismissive of others' feelings.

Ethan is my middle son (I have another, even younger son).  Ethan is very empathetic and quickly identifies the needs and emotional wants of others.  He feels deeply and shows great concern for the development and well-being of other kids (including his brothers).  Ethan does not display the same sort of outward and obvious charm that Jack does, he has his own (very unusual) sense of style and in general is not a "popular" sort of kid.  Other kids don't naturally flock to him, and he has very few acquaintances and just a few close friendships.

So, in this either-or scenario, who is the "natural leader"?  Jack is the one that people naturally want to follow, but Ethan is the one who possesses the emotional intelligence and selfless concern that characterizes great leaders.

The easy answer is to say that neither is really a natural leader, and that a natural leader is someone who possesses both characteristics.  I think that answer is wrong, though.  There is a lot of literature on leadership that seems to indicate that really successful leaders are often not the big keynote, charm-the-audience types, but more of the help-develop-your-people-though-honest-methods types.  We all remember Steve Jobs, but who ever really wanted to work for him?

Update:
I see this thing from time to time and it gets me to thinking:

At first glance it's very heart-warming and embraces diversity and has a cute girl standing akimbo with a soft-focus field and really seems like a great idea!  Except this... "Bossy" is not a leadership skill.  "Bossy" is a completely unnatural leader--bossy is a person who wants others to do what she says to do.  Bossy doesn't imply that others want to follow.  Bossy doesn't imply that you care about what's best for others, or that you're qualified to lead at all.  Bossy just means that you want to lead.

Really makes me wonder about Sheryl Sandberg that she doesn't seem to know the difference.


What do you think?

The parable in Tsar Saltan... "Gvidon's Squirrel"

I like to tell my 3 year old stories that are loosely based on Russian Folk Stories that I found in this book.  I take down the gore as much as possible and generally try to shift the jobs that people do to be a little more appropriate for modern times (and make the animals more fit for the desert, where we live).

On story I love to tell is based on "The Tale of Tsar Saltan".  In this story, a young man (Gvidon) ends up distant and unknown to his father (Tsar Saltan).  He helps out a swan, who turns out to be a magic princess and who falls in love with him and does him all sorts of favors.  Every time Gvidon sneaks back to his father's castle in the form of a fly, he comes back with a request for some new and crazy thing that he heard about there.  One example is this one:

 "After he flew back to the island, Gvidon told the swan the story he heard about the remarkable squirrel. Then the prince walked into his courtyard and, lo and behold, there was the singing squirrel, sitting under a fir tree, cracking golden nuts! The prince rejoiced at this and ordered that a crystal house be built for the little animal. He placed a guard there to stand watch and ordered a scribe to record every shell. Profit for the prince, honor for the squirrel!"

Basically, he found himself in possession of a magic squirrel/tree combination.  The tree produced golden nuts (each of which held a ruby inside) and the singing squirrel would go up and collect them, take them down and crack them and stack the riches up in piles.

The part that I love about this story is that Gvidon doesn't just take the riches, he then builds a completely non-value-added organization around those riches.  He establishes a completely superfluous crystal house for the squirrel, he organizes and accounting department to keep score and establishes a management structure that watches the whole thing happen.  

When I tell the story, I keep going.  The guards need management, so an executive structure is organized.  The accounting department eventually branches out into strategy and financial analysis and grows headcount.  Eventually there are organizations built up around selling the rubies and the gold on international markets.  The organization continues to get bigger and bigger and bigger until eventually the tree and the squirrel are at the bottom of the hierarchy, getting bossed around by MBAs and seasoned executives who have been in this business for years.  By the end, Gvidon's entire income is consumed by the organization.

How many times does this happen in the real world?  A start-up comes out with a great business concept and develops a product that is worth buying.  People value the services or the experience and the company starts to take off.  The need to scale and they take on investors, who want to track progress.  Before you know it, it's "Gvidon's Squirrel."

(if you're interested in reading the whole story, I found an online copy here, which is where I found that picture, too. 

If, when, and how often ... security flaws and fake news

When I was in middle school, my family moved from the sleepy rural town of Hurley, New York to the nearby city of Kingston.  While living in Hurley, my family had grown accustomed to the security standards of small communities where the nearest neighbors are quite a long distance from one another--that is to say no security standards.  My family almost never locked our doors, and my parents regularly left their keys in the car overnight.

Within a few weeks of moving to the comparatively populated Kingston, my father's car disappeared one morning.  He had left the car unlocked, with the keys in the ignition.  Some enterprising young man had noticed and taken advantage of the security hole.

A few weeks later we heard from the police at SUNY Albany.  Apparently, the guy had taken the car up to the campus and had been breaking into dorm rooms and storing stuff in the car (which he had also been living out of).  When the car came back, it was full of stolen stuff.  Amazingly, the SUNY police refused to deal with the stolen stuff because the car was originally stolen in Kingston and the Kingston PD refused to deal with the stolen stuff because the robberies happened on SUNY campus, so we were left with a whole bunch of stuff.  The guy who did all the stealing went to jail for a few months and my dad started taking his keys out of the ignition at night.

Amazingly, the day that the guy got out of jail, our car disappeared again!  Apparently, he had made himself a copy of the key.  That key was among his personal things when he was jailed and was among the personal things returned to him upon release.  He walked straight to our house, unlocked and started up the car and --creatively-- headed straight to SUNY Albany again and started robbing dorm rooms.  When the car came back the second time, Dad finally changed the locks.

I hope this is going somewhere...

When I was a teenager, I got involved with the early idea of online video games.  Back then, "online" meant dial-up, and specifically it meant direct dialing either a BBC or a friend's computer.  You would plug your phone line into the modem (external modem, of course) and then one of you would call the other one.  A few DOS commands later (actually a ton of inscrutably complex commands later) and you were DOOMing it up against one another.  In the '80s and early '90s, security considerations were a lot like Hurley... everything was unlocked and the keys were in the ignition.

Years later, at one of the first companies I started, I decided to host the email and web server for the company locally.  By "host locally" what I mean is that I got a static IP, stuck an old desktop in a closet and installed Apache.  Installing Apache was easy, but configuring security was complex and lengthy.  I thought back to the old BBC days and considered "what are the odds that somebody will discover this IP?"  The idea of learning about the security was interesting to me, though, and I put in a few days to educate myself, figure it all out, configure and install, etc. before activating the server.

What happened astonished me.  The first attack on the server came within a few seconds.  The next one just a few minutes after that.  By the end of the day, there had been dozens of intrusion attempts against this brand new server that was there to serve up a couple of lame web pages about a nobody video games company and to pass our completely uninteresting emails back and forth.  The pace of attacks didn't slow down, either.  It continued to increase as time went on.

At the time I started saying that security is serious business.  Security wasn't a question of IF you will get attacked or even WHEN, but HOW OFTEN will you get attacked?  This is probably more true now than ever before.

Over time, I have come to recognize that this equation is a function of network density.  The more dense a network of nodes are interconnected, the more interactions each node needs to expect.  These interactions can be anticipated, they can be serendipitous, or they can be hostile.  The more deeply and broadly we immerse ourselves as individuals into a more interconnected society, the more interactions we are exposed to.  The likelihood of "intrusion attempts" (hostile interactions) goes from "will it happen?" to "when will it happen?" to "how often will it happen?"

The next interesting question becomes "what will tomorrow's intrusion attempts look like?"  A decade ago everybody had at least a few Nigerian prince emails.  A few years ago, everybody was falling for phishing scams on Facebook.

This year was the year of fake news.  Possibly the most insidious of all hostile interactions, fake news plays on our human desire for an echo chamber.  Fake news spreads like a virus through the like-minded and hijacks our rational-thinking.  The Nigerian emails stole bank account numbers.  The phishing scams stole our identities.  Now fake news is stealing our ability to think.

The metaphor of the deer

Many moons ago (in college) I was driving on a small, country road in upstate New York ( somewhere around here, if I remember right ).  It was night and it was winter.  A dusting of snow was sprinkling down on the already frozen road, the sides of which were burmed with banks of tight-packed snow and ice with thick forest beyond.

This was college, and I was broke.  I was driving a Nissan Sentra Station Wagon, which was an absolute POS in case you're not familiar with it.

The POS in question

I was going around 60 and came over a hill to discover a deer hanging out in my lane, about half a mile away.  He was a big buck, facing to my left.  I seemed to have plenty of time to work out my options in my head, and it went like this:

a) Swerve around him to the left.  This would bring me into the empty oncoming lane, but I have always heard that a deer will jump forward if frightened, and that would mean he would jump right in front of my car.
b) Swerve around him to the right.  This would bring me right into the frozen snow bank.  Odds were really good that my junky little car would end up in the woods in the middle of nowhere.
c) Jump on my breaks.  The road was frozen and it seemed really likely that the bicycle tires on my car would lose traction and I would end up spinning out in the middle of the road.
d) Get off the gas, steer straight and hope for the best.

Now, it's worth mentioning that I was a truly terrible driver as a teenager.  These scenarios were not academic concepts to me, they were all experienced realities.  I had driven off the road several times (including a roll-over accident that crushed the roof of my car with a tree), I had lost control and entered into flat spins during bad weather, bad road conditions (and honestly sometimes under ideal conditions but bad choices).  I had wrecked 4 or 5 cars by this point IIRC.  I knew my way around crashing a car.

So, I did what they teach you to do in that circumstance.  Without any panicking, I took my foot off the gas and steered toward the right edge of the road.  I knew there wasn't room to get around the deer, but I was hoping he would jump out of the way.  In retrospect, I should have honked my horn, too.

About an hour later the local sheriff was there by the roadside, poking a buck with his foot and pronouncing "yup, he's dead alright.  Do you want to keep him?"

I spent the rest of the year driving a car with a completely smashed up front end, leaking Styrofoam from the bumper (did you know that cheap cars have Styrofoam bumpers??) and with a grill full of fur.

I tried a google image search for "furry bumper" and "fur in my bumper"... I don't recommend it.

There are lots of situations like this.  You can see them coming a mile away, but there isn't anything you can do about it.  In fact, anything you do is likely to make the situation worse.  When you look back at the outcome, it's easy to second-guess, but sometimes the right choice is to limit the downside--not to try to avoid it.