In “The Politics Of Projects“, Robert Block rightly states: “People want products, not projects“. The ideal project takes zero time, no labor, and no financial investment. The holy grail is to transition from abstract desire to concrete outcome in no time flat :). Nevertheless, for any non-trivial product development effort requiring a diverse team of people to get the job done, some sort of project (or, “coordinated effort” for you #noprojects advocates) is indeed required. Whether self-organized or dictator-directed, there has to be some way of steering, focusing the effort of a team of smart people to achieve the outcomes that a project is expected to produce.
At the simplistic BD00 level of comprehension, a project is one of two binary types: a potential revenue generator or a potential cost reducer.
Startups concentrate solely on projects that raise revenue. At this stage of the game, not a second thought is given to cost-reduction projects – the excitement of creating value reigns. As a startup grows and adds layers of “professional” management to control the complexity that comes with that growth, an insidious shift takes place. The mindset at the top flips from raising revenue to reducing costs and increasing efficiency. In large organizations, every employee has experienced multiple, ubiquitous, top-down “cost reduction initiatives“, the worst of which is the dreaded reduction-in-force initiative. On the other hand, org-wide initiatives to increase revenues are rare.
Check out these three financial portfolio performance graphs from Mr. Nassim Taleb:
A fragile portfolio is one which is prone to getting decimated by a rare, unpredictable, event (a.k.a. a Black Swan). A robust portfolio is one which is relatively immune to the effects of a devastating Black Swan. An antifragile portfolio is one which experiences spectacular gains from a Black Swan.
Mr. Taleb asserts that the world’s financial system has been (since the 80’s when we first started bailing out banks), and still is, fragile. As long as bankers know that we, the taxpaying public, will continue to shoulder the cost when they blowup because they are too big too fail, they will continue to exhibit incompetent, reckless, risky behavior backed by bogus PhD calculations. They get their perennial bonuses before each big bust for “doing well“, but aren’t forced to give them back when they lose more money in an instant from a Black Swan than all the profits they’ve ever made previously in the history of banking. It’s a no-brainer with all upside and no downside. What a life… if you don’t have a conscience.
So, how do you construct a anti-fragile portfolio? According to Mr. Taleb, you allocate 80% of your portfolio to “cash” and 20% to wildly speculative investments. It’s called the barbell strategy – weighted investments at both ends of the risk spectrum and nothing in the middle. In the worst case, you’ll lose the full 20%, but the sky is the limit if you’re right with your speculative investment choices. The challenges are:
- To muster up the nerve to actually go against what the mindless “portfolio theory” trained herd says and reallocate your currently fragile portfolio,
- Figure out exactly what Nassim means by “cash” (no, it’s not a savings account at Citibust or Bank Of Nightmerica),
- Decide on which speculative financial instruments to invest in (gold/metals? commodities? real estate? “other”?) .
BD00 knows what these challenges are because, as an unsophisticated investor, he’s struggling to conquer them himself. WTF!
Checkout this model of a one person business:
The worker/manager/owner applies her tools, skills, and expertise to transform business ideas into outputs that a customer willingly pays for.
After composing the picture, it occurred to BD00 to attempt to explore the relationship ‘tween “Quality Of Output” (QOO) and time “Delay“. However, he drew a blank. He can’t proclaim that increasing delay generally increases QOO. Nor can he assert that decreasing delay generally decreases QOO. The only thing he can confidently state is: “since zero delay by definition means zero output, it also means zero QOO“. Well, duh!
While reflecting on my journey through professional life, I decided to generate a timeline of my travels to date:
After a seven year stint at GE, I joined Sensis (SENsor Information Systems) Corporation in 1987 as employee #13. For 20+ years, the company flourished and grew until running into financial difficulties in 2009. After choosing Sweden’s Saab AB from a list of suitors as our future parent, we were purchased in 2011 and our name was changed accordingly to Saab Sensis Corp.
Due to the funky national security complications of being a foreign-owned company that does business with the US Department of Defense, it made financial sense to split the group in two – a subgroup that conducts business with the US DoD (Saab Sensor Systems) and one that doesn’t (Saab Sensis). A functional and physical split would lift the DoD security restrictions hampering the non-DoD business efforts of the Saab Sensis group.
After expressing a personal preference to be placed at Saab Sensis, I ended up being assigned to the Saab Sensor Systems group when the split was finalized in the fall of 2013. So far, it has worked out better than I initially thought it would. The high quality of the people and the work is essentially the same between the two groups, but Saab Sensor Systems is roughly half the size of Saab Sensis (to me, the smaller the better). In addition, the near term business outlook for Saab Sensor Systems seems to hold more promise.
I’ve been a lucky bastard throughout my entire work and social lives. I’m grateful for that, and I hope my lucky streak continues.
Because of the widespread wreckage caused by the 2008 financial meltdown and the fact that not one single gov-handout-taking banker fat cat is behind bars, I harbor a deep disdain for financial institutions. Since the impeccably infallible Goldman Sux is high on my turd list, I quickly snatched up Steven Mandis’s “What Happened to Goldman Sachs: An Insider’s Story of Organizational Drift and Its Unintended Consequences” to harden my mental model of the company. One of my favorite passages in the book is:
Before this increased emphasis on quantification and accountability, people were willing to make more time for each other and help think through issues. Bankers didn’t worry about filling out time sheets or taking credit. They worried instead more about giving clients better advice. – Steven Mandis
So, if your org’s so-called leadership starts cranking up the volume on “metrics!“, “accountability!“, and/or “performance management!” in textbook MBA fashion, then beware of what the future holds. It simply broadcasts their knee-jerk cluelessness and utter lack of ideas on how to really improve your borg.
Somewhere on the road from small startup sensation to huge institutional borgdom, the oft-repeated process of “manage-ification by growth” fires up and kicks into high gear. It’s inevitable, or is it?