The Iacocca theory

I've searched my blog, and I find no evidence I've put forth my Iacocca theory before. I find that hard to believe, as it's something I've believed since, well, Lee Iacocca would have seemed like the best illustration of that theory.

What has induced me to bring this up is a post by Greg Glockner on Decidedly, where he asks the musical question, Are "Great" Companies Just Lucky?":

When you look at an old list of "top companies" or "top executives", how many are still tops? If someone is no longer tops, what can we learn? Were they just lucky at the time that someone said they were "tops"? Or did they make some strategic blunder that caused them to fall from the top?

The Iacocca theory says: Take 100 "Lee Iacocca's," and watch them through their lives. We can even cook the game by putting them in the same circumstances, presenting them with the same options. What will happen?

Obviously, they can't all become heads of car companies and American business icons - there aren't that many spots open in a generation. My guess is that one will become the Lee Iacocca we know and love(?), nine will do very well for themselves, 50 or so will top out somewhere below the very top levels of whatever organization they end up in, 30 will stall out early through some fundamental mistake or (yes!) bad luck, and 10 will end up abject failures (or will die early or something else dire).

[Clearly those numbers are totally made up - my wife wanted me to be sure to mention that.]

If you want to seem more au courant, substitute "Bill Gates" or "Larry Ellison" or whatever business hero you have. But the point remains the same, that confusing the result with the process is a common mistake people make, that is, the assumption is that the successful had some kind of distinguishing feature that made them so successful. And that's true of companies just as it is of individuals.

Of course, there's another reinforcing factor: someone has to be in that position. Some company is going to be the number one car company, and the leaders of that company are going to seem, well, near-magical as a result. Right now Toyota's riding relatively high, and it's natural (but misleading) to focus on everything they've done right; moreover, to believe that everything they've done has contributed to that "rightness," that they are beyond criticism.

Few business leaders were riding higher a year ago than GE CEO Jeff Immelt. He seemed to have seamlessly mastered the globalization trend, taking the "legendary" Jack Welch's accomplishments on into the heavens. Now it seems clear that he was just riding the bubble, that there is little magic there, and one could easily foretell a bad end for Mr. Immelt sometime in the future. My point is not to castigate Immelt in particular, merely to point out how a year can seriously unguru some of our biggest names.

It reminds me of the studies that have been done on clutch hitting in baseball. There are few more commonly-held ideas than that there are some players who are superb in the tough situations - they rise to the occasion and carry their teams, and so are worth more than similar ball players who can't come up as big when the pressure is on.

And study after study have found that there is pretty much no clutch effect at all, that a player who does well with the bases loaded one year ("well" being defined as beyond his own norm) does not tend to see this persist year after year. Obviously, there will be the occasional player who will seem clutch for ten straight years, but no more than one would expect by chance. (There's also the memory effect in which we tend to remember the dramatic moments, all the times David Ortiz clears the bases in the 8th inning with a long double, not all the times he pops up in similar situations.)

I'm sure that Bill Gates is a pretty smart guy. I'm not sure that there aren't a whole lot of other people who would have done just as well if they had been inserted into Bill Gates's skin 30 years ago. We can't rerun history, as the saying goes.

But we need to be wary, as we evaluate individuals or companies (or any other institution), of crediting the wrong things for success that may well be indistinguishable from luck. We would do well to remember that it took even the great Bill Gates a long time to acknowledge the importance of the Internet, and only the vast market power of Microsoft kept that from being a company-killing misstep.

Decisions, decisions

From last week, a post by Patrick Appel for Andrew Sullivan on a Scientific American article, Tough Choices: How Making Decisions Tires Your Brain. In a nutshell, research shows that making choices fatigues the brain, causing subsequent decisions to suffer. Choice is hard, and providing people with more of it is not necessarily a plus.

I thought of writing a lengthy post in which I talk about how our system of representative democracy coupled with free-market capitalism elevates choice above all other attributes, being the only one that the two components share. As China is demonstrating, capitalism and democracy are not inevitably linked, despite what our pundits say.

It occurred to me, however, that I've written about this before. 14 months ago I wrote a post which lays out my concerns about how poorly our system serves the people, in particular because the ideals of the free market have taken precedence over the functions of our government. As a result, we've elevated the notion of choice, instrumental to the market system, to the overwhelmingly predominant value we can have. So we're offered choice in our medical plans; if we guess wrong, we have no one but ourselves to blame.

There may be many cases in which this is acceptable, but the research also indicates that this creates stress, stress that I would imagine is even greater for choices made in situations of greater uncertainty. Choice sounds great as long as the majority is making good (or at least acceptable) decisions - however, when they all, for example, miscall the real estate market, we can end up with disaster for the nation as a whole. Sometimes it is necessary to constrain individual choice to make the system work.

Huh??? What???

Via Patrick Appel, filling in for Andrew Sullivan, Bryan Appleyard on distractions:

We’re all distracted, we’re all interrupted. How foolish we are! But, listen carefully, it’s killing me and it’s killing you....[T]here is the great myth of multitasking. No human being, he (David Meyer) says, can effectively write an e-mail and speak on the telephone. Both activities use language and the language channel in the brain can’t cope. Multitaskers fool themselves by rapidly switching attention and, as a result, their output deteriorates.

People who routinely "multitask" suffer from stress-related diseases, with interruptions consuming 2.1 hours a day in a knowledge worker's day.

In this rambling but effective essay, Appleyard goes on to discuss the growing inability of people to concentrate, even to read, as, once a mode of constant distraction and reaction is established, we are losing our ability to move back to the mode of focus on one coherent line.

And, as we lose our ability to interact with a single thread, we spin large numbers of insubstantial ones:

Teenagers are being groomed to think others can be picked up on a whim and dropped because of a mood or some slight offence. The fear is that the idea of sticking with another through thick and thin – the very essence of friendship and love – will come to seem absurd, uncool, meaningless.

There is concern that this is a permanent condition for our young people, and that something important is being lost:

Studies show older people are generally more adept with computers than younger. This is because, like all multitaskers, the kids are deluding themselves into thinking that busy-ness is depth when, in fact, they are skimming the surface of cyberspace as surely as they are skimming the surface of life. It takes an adult imagination to discriminate, to make judgments; and those are the only skills that really matter.

And there is very little chance that this will turn around, because there is a lot more money to be made in devices of distraction, the iPhones, the Blackberries, the e-mail alerts, the Facebook friend requests, than there is in products that bear a more contemplative aspect.

These things do make our lives easier, but only by destroying the very selves that should be protesting at every distraction, demanding peace, quiet and contemplation.

This is a good piece, and there's more than I've been able to excerpt, so read the whole thing. One aspect that Appleyard fails to touch upon, though, is the extent to which this can be part of a power game. The employee who has to multitask at the whim of his boss is being put in his place. But it can work the other way.

I once supported a manager who would call underlings into her office, then take and make phone calls, working on other things while we would sit there waiting for a scrap of her attention. The context shifts were remarkably time-consuming, as we would have to remind her of what she was saying when she returned from whatever other thing she was doing. She undoubtedly thought of herself as quite the multitasker, but she wasted everyone else's time (because she could), and she rarely understood anything in any depth. (She also had that irritating habit of removing her earring every time she took a call, then putting it back once the call was over; I'm not sure how she had any earlobe left.)

Multitasking is impossible, not a desirable trait. The brain is simply not designed to work that way. Early computers supported time-sharing, which made multiple users think that they each had the computer to themselves, but it was essentially a trick: The single-processor computer was switching attention from one user to the next at an incredibly rapid rate. (Computers still do this, we don't call it time-sharing any longer.) Unfortunately, the human brain has a lot more trouble doing seamless context switching, and it doesn't surprise me at all that people are starting to experience stress disorders from trying to do so.