Posts Tagged ‘culture’

Culture, Rose-Colored Glasses, and the Michigan Bottle Scam

June 28, 2011

NEWMAN: Wait a minute. You mean you get five cents here, and ten cents there. You could round up bottles here and run ’em out to Michigan for the difference.

KRAMER: No, it doesn’t work.

NEWMAN: What d’you mean it doesn’t work? You get enough bottles together…

KRAMER: Yeah, you overload your inventory and you blow your margins on gasoline. Trust me, it doesn’t work.

JERRY: (re-entering) Hey, you’re not talking that Michigan deposit bottle scam again, are you?

KRAMER: No, no, I’m off that.

NEWMAN: You tried it?

KRAMER: Oh yeah. Every which way. Couldn’t crunch the numbers. It drove me crazy.

Even Kramer got it. Fundamentals matter, but there is a persistent legend in many engineering organizations that culture trumps the bottom line. It’s a legend that propagates because, as change management consultant Curt Coffman has provocatively noted, “culture eats strategy for lunch” when it comes to execution. What Coffman and others who talk about “soft stuff” don’t tell you is that in the end culture doesn’t matter.

The reality is is this: culture only trumps the bottom line in organizations that are heading in the wrong direction. It’s easy to see why: bad execution can be excused when it is in the service of a higher calling.  Sometimes — the legend goes — cultural purity even demands failure. Briefings that begin with a retrospective tour of a company’s glory days or the exploits of its leaders are not going to end well.  It’s a malady that afflicts start-ups, Fortune 100 companies, universities, and political office holders.

It was a rare meeting at Bellcore or Bell Labs that did not begin with a bow to a century of innovation and accolades. Theirs was a tradition so rich that it was bound to color all projects in perpetuity. I knew a  business development managers who intoned “WE ARE BELLCORE!” at the start of engagements. It always sounded to me like a high school football chant designed to cow the opposition.

The remnants of the Army Signal Corp  research lab at Fort Monmouth New Jersey had long dispersed by the time I interned there in the early 1970’s, but stories of the famous scientists who once stalked the cavernous halls of the enormous hexagonal building near Tinton Falls were retold to each new class of PhDs as if  the great men would be dropping in any moment to don lab coats and resume their experiments.

Start-ups are not immune, either. A few weeks ago, I was nearly ejected from a meeting with a CEO who was raising early stage money for suggesting that the distinguished professors who had founded the company might have had less than complete insight into market realities.

The “We are great because…”  meme  is propagated by leadership at all levels. Even in this age of the decline of the celebrity CEO, countless university and corporate websites are travelogues for executive jaunts to far-flung campuses. Supporters of one prominent Silicon Valley CEO would muse to anyone who cared to listen: “I wonder what it feels like to always be the smartest person in the room?”  The phrase found its way into an industry analysts’ briefing at the very moment that the company’s stock was falling off the edge of a cliff. I watched the faces of the analysts, and it was clear that they were pondering entirely different questions.

I’ve had my share of run-ins with employees who were not at all shy about using vaguely remembered words of long-departed leaders to pit culture against execution. In one instance, a series of patents led to an ingeniously conceived system for streaming audio and video from conference rooms and lecture halls. Unfortunately every cost projection showed that the effort required to install and maintain the equipment swamped any conceivable revenue stream. When I confronted the inventors with the inevitable conclusion, I was excoriated in the most graphic possible terms because I had not taken sufficient account of  the intellectual beauty of the system.  The crowning blow: “Dr. [insert the name of any of my predecessors] would have understood my work!”

On another occasion, I was called upon to invest heavily in a newly conceived and revolutionary mathematical method that would transform not only our  business but scores of related industries.  The inventors’ local managers had been completely sold on the idea and were willing to put a substantial portion of their margins at risk to develop it.

Key to the idea was the notion that every textbook in the field had been written by authors who willfully ignored the power of the new theories. The invention involved an area in which I had done research in the past, but  I couldn’t make much sense of the claims.  I dutifully sent drafts of patent disclosures to experts, but the feedback was discouraging.  The claims in the patent disclosures were either false or so muddled that further analysis was useless.

I pulled the plug. Reaction was swift and heated.  Here’s what it boiled down to: the founders would have had faith in the employees, and I did not. They were right about me, but not about the founders.

It is in the nature of engineering organizations to reconstruct the past to suit the present.  Hewlett-Packard was famous for such rose-colored glasses.  When then-CEO Carly Fiorina combined ninety or so business units — each of them concentrating on a slice of a business that overlapped with a half-dozen others, driving down operating efficiencies and, with them, margins — into a total of six, howls could be hear from every HP lab on the planet.  “Bill and Dave would not have done that to us.” A casualty of Mark Hurd’s rapid moves to salvage the strategic advantages of the two year old Compaq merger by slicing investments that did not have a clear path to revenue was the revered software laboratory at HP Labs.  “Destroying the culture!” cried the masses.

Now I happen to think that both moves were unwise, but not because of any cultural imperative that had been handed down from Bill and Dave. The numbers were seldom that hard to “crunch”.  It always boiled down to fundamentals. Risks were taken, but only when the fundamentals made sense.

It is a unique fiction in Silicon Valley that Bil Hewlett and Dave Packard were friendly to anything but an engineering culture that demanded results and held managers personally accountable for their decisions. I once got in trouble with the company’s director of  marketing and communications for suggesting otherwise in a public forum.

“Culture” often reared its head during my tenure at HP — usually as an excuse for ignoring business fundamentals. It was a problem that plagued Joel Birnbaum, my precedessor, Dick Lampman, head of HP labs and others over the years. On those occasions, I was happy to have the words of Bill Hewlett and Dave Packard to fall back on.

I’ll talk about that in my next post.

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The Five Dumb(est) Ways that Universities Spend Money

April 6, 2011

I know a young woman who attends a very pricey public university that has plans to raise her tuition by another 25% next year.  It’s in one of those western states where the number of applicants far exceeds the number of available freshman openings.  You have to wonder what was going on in the alumni office when they were putting their quarterly newsletter together. It  proudly announced the latest institutional initiative, a million dollar branding campaign.

It would be one thing if it were a campaign to spread awareness of the university’s many great programs among prospective students.  It would even be all right to mount a a campaign to position the university as a driver of economic growth and social well-being for a balky state legislature.  But no, this was a branding campaign along the lines of  management book/landfill fodder classics like Why Johnny can’t Brand.  “It’s even worse,” said the father of the soon-to-be gold-plated sophomore.  His face was red and his hands were shaking as he shoved the alumni newsletter under my nose.

They are going to spend a million dollars — my dollars — on standard logos and common fonts.” No more nightmarish inconsistencies between physics and modern languages when it comes to business cards and PowerPoint presentations. And those press releases from the Athletic Director will now just have to rise or fall on their own merits. They won’t have serifs to hang onto.  Prospective employers will heave a sigh of relief knowing there has been no graphical hanky-panky in the registrar’s office when it comes to the forms on which student transcripts are printed.  Teams of litigators will have new weapons at their disposal as they fan out across the world to chase down the diploma mills that churn out thousands of knock-off degrees. As they cross the commencement stage, new graduates and their parents will be greatly comforted to know that every time their daughter is introduced from that day forward, the university’s branded,  descriptive tag line will have to be tacked onto the end, as in, “Meet Sally Smith who recently graduated from Western State University, the Mighty Blue Raiders, leading the force of change and innovation for the Rocky Mountains and beyond.”

OK, sorry.  I got caught up in the moment, but it struck me that a million dollar project to apply consumer product marketing tools  to a university that is raising tuition by 25%, closing academic departments, shutting down programs, and firing scores of staff was probably going to have some unintended repercussions. Marketing professionals would say it was not the best choice optics-wise. I remember thinking to myself: “This is maybe the dumbest use of university funds that I have ever seen.”

If you’ve seen my other posts (here and here for example) about college costs, you know that, optics-wise,  I am suspicious of any expenditure that does not add value to students. So I started to wonder about other really dumb ways that universities spend money.  I have a top five list.

  • An expensive “branding” campaign to standardize logos is at the top of the list.
  • Letting service units do research: Dormitories, IT facilities, bookstores, technology licensing, and public relations offices, are all service units. The problem is that mission creep results in an ever-expanding number of ever-expanding service units. No doubt inspired by institutional aspirations, they try to hire the best people.  Some of them have PhDs and academic career goals of their own, so they push very hard for a piece of the campus research pie. But, as we all know, university research seldom pays for itself. It is mission creep upon mission creep as service units with no academic mission whatsoever funnel resources into research programs.
  • Overhead forgiveness: Faculty members and research sponsors are equally suspicious of indirect costs on research contracts.  Professors see it as an unnecessary tax on their salaries, and sponsors confuse it with profit.  Both sides push to have it reduced or eliminated.  There are even federal agencies that make it a point to try to have it forgiven as they strong arm investigators into promising more and more for less and less.  Even full cost recovery does not pay the actual cost of research. Reducing or eliminating research overhead is an expense that robs the rest of the university, and is not a smart way to spend money.
  • Centralization: I once had a colleague — a fellow general manager — who effectively blocked any attempt to increase the size of his staff with “Where the f— do you think we are, General Motors?” It translated better back when General Motors was ranked number one in the Fortune 500, but it is nevertheless a good message today that administrative bloat is a dumb way to spend money.  The Spring 2008 issue of the UCLA faculty newsletter shows how bad it has become:

Over the past decade, the numbers of Administrators in the UC almost doubled, while the number of faculty increased by 25%. The sharpest growth took place among Executives and Senior Managers: 114%. Because Administrators command high salaries and benefits, any increase in their number higher than the expected growth rate for the University results in high costs: rough estimates of the costs of carrying extra administrators at UC range around $800M.

  • Entertain yourselves: We call it many things.  Networking. Teas. Receptions. Faculty meetings.  For most of the world, lunch means a five dollar sandwich from the cafeteria. At too many university gatherings, a catered buffet is the lure that induces professors to attend. Whatever we call it, the world sees it as a free lunch, and professors spend university funds to feed themselves at the drop of a hat. Long-time viewers of the NBC comedy series The Office know the drill.  If there’s a reason to entertain ourselves let’s do it:

Jan: You already had a party on May 5th for no reason.
Michael: No reason?! It was the 05 05 05 party…
Jan: And you had a luau….
Michael: …it happens once every billion years.
Jan: And a tsunami relief fundraiser which somehow lost a lot of money.
Michael: Okay, no, that was a FUN raiser. I think I made that very clear in the fliers, fun, F-U-N.
Jan: Okay, well, I don’t understand why anyone would have a tsunami FUN raiser, Michael. I mean, that doesn’t even make sense.

Paring the list down to five was not easy, and I am sure many of you have lists of your own.  What was number six? Well, Rutgers’ decision to pay Nicole “Snooki” Polizzi  (star of MTV reality show Jersey Shore), $10,000 more than the annual cost of attending the university was a real contender. It was $2,000 more than Nobel Prizewinning author Terri Morrison received.  It was a problem.  Optics-wise.

Investor vs. Investor

September 29, 2010

Internal start-ups have all of the usual new business challenges.  They need products, customers, and a profitable way of getting customers to pay for the products.  But above all, they need cash, because even the best strategy will crash and burn if money runs out too soon.

[Production note: at this point investors should enter, corporate investors stage left, venture capitalists stage right]. They speak the same language and are genuinely interested in incubating  great new businesses, but don’t let that fool you.  They are from different worlds.

promised to talk about some of the things that doomed the Bellcore internal start-up which I briefly led.  There is no way of  knowing whether a VC-funded company would have fared any better. In fact, one of the companies that we might have merged with was a venture-funded operation that lasted only a few months longer than we did.  Nevertheless, we did learn a lesson or two about corporate sponsorship of start-ups:

Corporate sponsors of new ventures and VCs have different belief systems.  They are fundamentally incompatible, and without early, explicit steps to stop it, corporate attitudes, practices, and beliefs will overwhelm the fragile culture of the start-up.

Let me set the stage a bit.  In 1999, Bellcore (now Telcordia Technologies) was a small company (revenue creeping up on two billion dollars) that was trying to ride the internet wave, but it had inherited a corporate style from its previous owners that was, well, hierarchical.  Big deals dominated the business mix, and internal investment decisions were obsessively analytical.

Bellcore’s new owner was SAIC, a big company serving a hierarchical marketplace that was paradoxically entrepreneurial. Bob Beyster, SAIC’s founder, had insisted on a flat corporate structure in which managers were encouraged to develop independent business.  When my little start-up failed, I  made my wrap-up presentation to the CEOs of both companies.  One of them tended to believe that Bellcore’s internal investment machinery was the right way to grow a new business.  Here’s how it went.

  1. We spent a lot of  money on extensive analytics to gauge market potential.  It was how the investment decisions for Bellcore’s big operations support systems were made and every new round of funding was based on a rosy prediction of a complex market study. In reality, market behavior was unpredictable.  We should have evolved our concepts in the market.
  2. Except for the few top  technologists that I could steal from my own research staff, corporate investors would not permit top talent to be redirected from existing projects — where the  big customers were —  to this risky venture with uncertain prospects. Once both scale and success were clear, we could recruit internally, but until then, we had to rely on good-natured volunteers to help us out.  The only thing we could do was hire externally, but there was little upside to attract the kind of business team that we needed.  A VC sponsor would have known that new ventures do not succeed without a highly talented team.
  3. Speaking of success: the corporate sponsors were only interested if the likelihood of success was high, so we spent a lot of time on the success factors that would be convincing to them.  An angel investor or a VC would have known that, since the likelihood of success of a given venture is quite low, it is better to fail earlier rather than later.
  4. Corporate culture was a culture of ownership, so many business planning meeting focused on patents and intellectual property rights that would build walls around the business.  It was an unfortunate mindset.  This was a time of open standards and sharing, but shared ownership was not part of the equation for our start-up.
  5. Internal sponsors wanted to see scale.  Niche markets were simply not interesting. The business had to embrace all of telecommunications, so part of the operating strategy was to place many product bets simultaneously, a disastrous choice given the meager resources for product development and the lack of real experience on the part of our business development team.  A VC would have told us that a narrow, easily explainable, product focus was key to success.
  6. The corporate sponsors were all senior Bellcore executives, and they were focused on building the core businesses.  They believed that value creation had to be demonstrated by earnings. A VC would have told them that the market recognizes value well before earnings are even possible — it’s the single most obvious characteristic of early-stage investors to constantly seek those kinds of  market signals.

There were ways through this thicket.  That is one of the lessons for corporate leaders who want to launch internal start-ups: avoid colliding worlds by choosing the right corporate role.  Corporate sponsors need to be responsive to the needs of the new venture, but proactive support is just one more opportunity to infect the start-up an alien culture.  An internal start-up needs to be managed, but managing for value makes much more sense than managing to artificial revenue and earnings targets. And freaking out over the possibility of failure is also not helpful.  New business creation is a portfolio game, and any corporation that does not take a portfolio approach is betting against high odds.

An overlay to the story of every internal start-up is corporate machinery.  The milestones that mark the calendar for corporate sponsors are timed to fit the needs of much larger — and more visible — core businesses.  No billion dollar company can afford make its processes dependent on external business and market events.  But that is exactly what a start-up needs to do.  So, even if the new venture survives the Investor vs. Investor duel, it needs protection from the calendar, the  topic for my next post.

The Internal Start-up

September 22, 2010

Dilbert.com

I had a conversation the other day with a senior executive — let’s call him Bob —  of a Fortune 10 company about their “internal start-up” culture. It seems that they are looking for breakthrough product ideas that do not align well with their core business.  The solution seems obvious: let’s create the same kind of  exciting, market-driven environment that you would find in a start-up!

Everything sounded fine for a few minutes.  They thought that the most creative people in the organization needed to have elbow room that would be difficult to achieve in the risk-averse culture of a hundred billion dollar company.  So how did they plan to achieve that?

  • Freedom to break some rules:  the start-up can use its own  product roadmaps and sales strategies
  • Freedom from process-driven corporate calendars and budgets: the leadership of the start-up is not bound by the revenue and earnings goals of their parent
  • Freedom to take risks: they have permission to fail

It didn’t take long for the discussion to go seriously off track.  When I started in with questions about how they were going to actually pull this off, Bob said: “Look, I’m in charge of new technology and platforms and I’m going to be the venture capitalist funding a new product, so that when it succeeds we’ll be able to fold it back into our current business.” I had seen this movie before.  It’s called When Worlds Collide. When I suggested that Bob lives on a different world and would make a terrible venture capitalist, things got a little heated. As I recall it, Bob said, “In your ear!” A surefire way to put a fine point on your argument.

Bob lives on a planet where the scale of his business creates a climate for successful development of new products that can be sold to familiar customers using existing channels and tried-and-true processes.  Above all, in Bob’s world, it is possible to make big bets. The examples are impressive. Everything from HP’s inkjet printing to the Boeing 777. Unfortunately for Bob and his start-up, none of those things matter.  The start-up lives in a world of new markets, which means new customers, new channels and new processes.

Even though Bob has all the talent he needs for market success,  the likelihood of failure is high. The Newton and the Factory of the Future did not fail because  because Apple and GE could not innovate.  They failed in large measure because corporations foster a system of beliefs that is fundamentally incompatible with  taking capabilities to new markets. When I asked Bob  how the start-up employees were going to be recruiteed and rewarded, whether they had a safety net for returning to the company in case of failure, and how many simultaneous bets he was willing to place, the answers were not encouraging.

I immediately did a deep dive into my archives, hoping to find traces of a long-forgotten venture that I helped steer into the ground.  In the late 1990s Bellcore was poised to enter the online services business, hoping to attract newer, smaller customers than the seven  Regional Bell Operating Companies who accounted for most of the company’s revenue.  This was a time when Bellcore’s Applied Research group was generating a blizzard of patents in e-commerce and software, technology that I have talked about before. We were as smart and nimble as any West Coast start-up, and best of all we had the cash to fund a new venture, the talent to staff it, and the power of an existing sales team to go after those new customers. I was asked to lead the new company.  We would be funded just like a VC-backed start-up…

When the dust settled and I reported lessons learned to the Bellcore’s CEO Richard Smith and later to Bob Beyster, CEO of SAIC,  Bellcore’s parent company, the first thing I said was that there had been no structural reason for failure.  A team from McKinsey had already given us the range of possibilities. We could have set up an independent business unit or spun 0ut a company in which we retained minority ownership.  Setting up a new incubator would have required more time than we thought we had, and, in any event,  Applied Research was already in the incubation business. We had chosen to bypass corporate reporting structure and create a company-within-a-company with direct oversight by a CEO who was committed to our success.  It was exactly the Hughes DirecTV model.

There are three reasons that internal start-ups like ours tend to fail.  Bob was not in the mood to listen because he is banking on success, but the topic comes up in every large enterprise, so I thought it might be a good time to repeat the conclusions here:

  1. Failure is common: Building new business is a portfolio game in which 90% of the returns come from 15% of the investments.  It is fundamentally unlike product development. A “big bet” strategy only succeeds when there is high degree of confidence in your ability to sort out winners and losers.  In a new market, that just never happens.
  2. Market-driven milestones drive success in new ventures.  An internal start-up — even one with strong support at the top — cannot divorce itself from processes that are timed to fit corporate needs.
  3. Corporate sponsors of new ventures and VCs have different belief systems.  They are fundamentally incompatible, and without early, explicit steps to stop it, corporate attitudes, practices, and beliefs will overwhelm the fragile culture of the start-up.

I want to spend the next several days elaborating on these ideas.  I hope Bob is reading.

dy, dynac, and Carly Fiorina

August 25, 2010

I recently heard from Chuck House, co-author with Ray Price of The HP Phenomenon (THPP) about my post The dy Logo.  I had used Chuck’s book as a jumping-off point for a discussion of how difficult it can be to integrate “outsider” cultures, even when the outside ideas have obvious value —  like correctly orienting the logo on a consumer product. It was a riff on WWC that I enjoyed writing.

Chuck’s note was a wonderful read in itself.  He took good-natured issue with some of my characterizations, reinforced other points that we agreed on, and reminded me of a few things that I should have remembered (and were in his book).  I don’t have Chuck’s permission to publish his email in its entirety, so I won’t.  Nevertheless I wanted to share with you a couple of his observations.

First of all, Chuck pointed out that the “dy” logo was actually used at HP in the 1950’s.  From page 64 of THPP:

A spin-out corporation…Dynac allowed a number of HP employees a higher equity stake in their success while giving HP a chance to invest in areas adjacent to its main activities. Dynac’s logo was the HP logo inverted. Later, when it was found that the Dynac name was trademarked, it was renamed Dymec, keeping the same logo.

There are many wonderful things about this story, but I was most fascinated that — even in the 1950’s — corporate leadership would have invented such a thoroughly modern approach to identifying and seeding market adjacencies. Some things were lost over the next couple of decades.  At least, there is no indication that Steve Wozniak’s management was inclined to create a spin-out to  give “HP a chance to invest in areas adjacent to its main activities.”  In any event, most of the HP engineers who argued for keeping the “dy” logo were not even born when Dynac used it, so it is unlikely that their resistance to flipping the shield was a nostalgic bow to a prior golden age.

Chuck went out of his way to reaffirm the comments in his book about Carly Fiorina’s positive  impact on HP.  Despite the obvious oustider-insider clashes, he says that, ” I don’t buy that Carly introduced WWC to HP, or even that she was all that good at it herself…,” but he does think that “…she was the best CEO we’d ever had in a WWC regard by quite a long ways (except Hewlett when he would actually do it…).

To temper my comments about the narrowness of  THPP’s sources, House described for me the considerable pain and expense that he and Price endured in preparing the research.  Ninety percent of the people interviewed about events in the last fifteen years were what Chuck calls “current participants.” It’s hard to characterize that as the reminiscences of old colleagues. Point taken.

It was interesting to me that Carly opened the HP archives to House and Price.  That access was eventually revoked.  In fact, by 2001, access to the archives had become a sensitive issue with Carly, and she asked me to undertake a review of both the libraries and the archive.  I was not very excited about doing it, and other events quickly had a higher priority.

For Chuck’s unvarnished “side-by-side” view of recent HP CEOs — along with a pretty striking analysis of value given versus value received — I will simply point you to his recent blog on the topic.

The Technology Committee

February 2, 2010

San Jose Mercury News (CA)

December 23, 2001
Section: Business
Edition: Morning Final
Page: 1F

VC LEGEND LEADS CHARGE FOR HP-COMPAQ
WITH TIES TO BOTH COMPANIES, PERKINS HAS UNIQUE PERSPECTIVE
MATT MARSHALL, Mercury News

Thirty-six stories above the placid blue waters framing Alcatraz Island and the Golden Gate Bridge, Thomas Perkins fidgets in his chair. If conversation lulls, his thumbs twiddle impatiently. He is a man driven by ambition. Perkins, 69, has turned his Silicon Valley venture capital firm, Kleiner Perkins Caufield & Byers, into the most successful VC firm in the world. Kleiner Perkins has returned around $20 billion to investors over its 30-year history. But Perkins‘ impatience comes from his latest, unexpected challenge: the bitter battle over the proposed merger of Compaq Computer with Hewlett-Packard. As a board member of Compaq — and former executive at HP, the Palo Alto computer firm where he cut his teeth more than four decades ago — he has become one of the most outspoken backers of the merger. But some HP heirs — sons and daughters of founders William Hewlett and David Packard — have signaled their intent to vote down the deal, saying a merger doesn’t make economic sense. They also say the layoffs likely in a merger threaten to ruin HP‘s vaunted tradition, the so-called HP Way, which they say emphasizes company loyalty…

…A merger will create a mammoth company that can take on giant IBM — and beat it. HP and Compaq, he explains, have better ties with Microsoft and Intel — two other key protagonists in the computer industry drama. Together, he says, the foursome create an industry standard that can easily outdo IBM. ”Microsoft will be the software department, Intel will be the hardware department, and HPCompaq will be the marketing-customer delivery department,” he says. ”Wouldn’t you go for it?” In part, Perkins is fighting for Compaq. But he also is fighting for his right to interpret the legacy that Packard and Hewlett left for Silicon Valley..

I remember opening the paper a couple of days before Christmas, 2001 and feeling like I had just been kicked in the stomach.  It was not the best time to be an officer of HP. Bill Hewlett’s son and HP board member, Walter, had come out swinging against the HP-Compaq merger, and Carly Fiorina, my boss, was under incredible pressure to sell the deal despite howls from the local press, the Hewlett and Packard families, an active message board for HP employees, and now a fractious board of directors. And there it was in black and white in the morning paper:   Tom Perkins, a Compaq board member and a driving force behind the merger had a plan to turn HP — the company whose logo said “invent” — into the marketing department for Intel and Microsoft.  I had to think hard about how I was going to face my own Technology Council and reassure HP’s 12,000 engineers that — despite what Perkins said in the  interview —  the company was not backing away from its commitment to innovation.

Earlier in the month, Carly had invited us to her house for a very low-key holiday celebration — much more subdued and informal than the elegant holidays parties that were the custom when the company was doing better.  Carly had paid for much of it out of her own pocket.  It  turned out to be a  tense and not not very festive evening.  Carly was running on a few hours of sleep, and the rest of us were trying to tie down the ship’s rigging in the middle of a storm. There was an air of uncertainty. We sat around smaller tables with our spouses as dinner was served.  Carly and her husband Frank were at an adjacent table.   As much to break the tension as anything, the discussion at our table turned into a silly  guessing game over which actors would be cast to play which of us when the HP-Compaq Merger Movie was made (West Wing star Allison Janney was the consensus choice to play Carly).   We must have been loud, because I could see Carly stiffen.  Carly didn’t know who on her own staff she could trust, and it must have sounded like we were tossing off the seriously difficult times that would be coming for HP and its employees.  We weren’t.

I spent virtually all of my time that winter keeping our major technology initiatives on track, promoting strategic product directions with customers, and talking to our engineering teams around the world.  The outcome of the proxy fight was uncertain and there would have been antitrust repercussions if HP and Compaq had gotten too cozy, so Webb McKinney, who was in charge of HP’s side of the integration team and the clean room that allowed the companies to begin planning merger details without violating antitrust laws, kept most of us with day-to-day management  responsibilities in the dark about post-merger plans for technology and products.

Once shareholders approved — by a hair’s breadth — the merger, Perkins was named to the board of the new HP.  Compaq’s  Shane Robison was named to a new position that combined my old CTO role and a Chief Strategy Officer position that had not existed before. I was still concerned about the Perkins comments from his December interview.  My first encounters with the Compaq technologists were not encouraging. I got into a shouting match with one of Robison’s staff members about how much HP should be investing in security for its products.  This was less than a year after the 9/11 attacks, and I had been working closely with CTO’s of other Silicon Valley companies and federal agencies to forge a comprehensive strategy for information and communications security.  The official Compaq position was that this was a problem for Microsoft, not HP, and I was told to keep quiet about it.

Imagine my surprise when Perkins and Robison led an effort to form a Technology Committee for the HP board to oversee and track R&D the same way that Audit, Governance, and Compensation Committees oversee financial  and operational matters.  I didn’t always agree with the direction it took, but it seemed to breathe new life into a technology governance process that had been stalled for many months.  Prior to that, HP — like most companies — did not place much visible  faith in its board to integrate technology into corporate governance.   There were a few public boards that had technology committees. They had been prominently featured in the  magazines for directors that wrote about best board practices, but those articles were disappointing:  most existing technology committees were for  informal oversight of technology spending by CIO’s.  What Perkins was  proposing was something different — and so at odds with his public statements about the value of a merged HP and Compaq that it took me a little while to catch on.   The HP Technology Committee would not only monitor  technology developments, it would help educate the board about new trends and directions that would impact board-level decisions and provide informed advice on the technology implications of financial and personnel decisions, including how to maintain a workforce advantage.

A committee like this would have been helpful years before, because HP had a history of plunging into technology investments and acquisitions that, to most technology observers, made little sense.  HP’s  decision in 2000  to purchase a middleware/software company called Bluestone was one such decision.  A distant fourth in a crowded and fragmented marketplace, the idea behind the Bluestone acquisition was based on a faulty reading of HP’s current capabilities in the space, the ability of any small entrant to alter the dynamics of the marketplace and the needs of HP-UX customers who felt themselves always last to the trough when third-party software developers released new products.  After two years of chaos and the dismantling of HP’s web services organizations, Bluestone was dumped at a $400 million  loss.

HP’s decision to sell its considerable VLSI design assets to Intel was also  made for financial reasons, although it was widely known in HP’s technology community  that the success of its 32 and  64 bit  processors, including  Itanium,  depended on custom chipsets that HP had invested  in for many years.  The original architects of Itanium were on my staff,  and it was hard to peel them off the ceiling when the announcement was made, especially since they had virtually no voice in the decision-making process.

Officers were invited to sit in on the  entire HP  board meeting, except for the closing executive sessions.  Even so,  it took me awhile to realize how rare technology discussions actually were. After a particularly fiery Industry Analysts’ Meeting, during which I made a slash-and-burn  presentation on our competitive advantages over Sun Microsystems —  that made the analysts smile but our marketing folks queasy — Carly asked me to reprise the talk for the board.  Patty Dunn (who would later take over as Chairman  in a controversial  tenure after Carly’s dismissal in 2005) and others approached me to say how much they appreciated the competitive information and the willingness to be combative in defense of HP product strategy.  They claimed, incredibly, that it was the first time they had heard this kind of presentation.

The Perkins proposal would have given the board a lens to look at issues like these — necessary in  a company where financial forecasts are only as good as the underlying technology.  HP was not only one  moving in this direction.  Motorola and other technology companies  had — at about the same time — formed Perkins-style Technology Committees.  Ram Charan’s book  Boards That Deliver helps explain why technology companies need to take the Technology Committee seriously, more importantly, how they can help  a board move beyond the role of compliance to a deeper assessment of health and prospects:

Financial health, operating performance and risk each require separate attention.  A company can show good operating performance while financial health…is in decline. Dot-com companies, for example, were notorious for delighting their customers with fantastic (or fantasy) products and services while bleeding cash.  Similarly financial health can appear to be sound when in fact the guts of the business have been severely compromised.  Any risk can be underestimated, especially when it is assessed piecemeal, rather than in totality.

The reason that the Technology Committee is a good idea for  public technology companies is that the worlds of innovation and execution are going to collide, and a board cannot deliver value by simply checking off a box on a governance worksheet.   What do you know, for example, about the real performance of key technology executives  without a deep insight into how they would be evaluated by their peers  and competitors?  How do you know that an acquisition based on a couple of good financial quarters and self-congratulatory product  press releases has no market advantage over an in-house solution?   That’s not the kind of question that due diligence is going to ask. After I left the company, I watched the downsizing of research and heard often from former friends and colleagues who thought one decision or another was wrong-headed, and I often  wondered about how effectiveness the committee actually was.  And then I would see something preserved that made no short-term financial sense, although everyone knew how important the technology would be some day.

When I joined the board of RSA Security, I was definite about my plans.  “Look,” I told CEO Art Coviello, “RSA’s performance is a three-legged stool, and the board needs to be as informed about the technology and markets as it is about finance and operations.” Ram Charan would have said the three legs are Finance, Operating Performance and Risk. I said the risks are Technology, Markets and Organization. Both Art and Chairman Jim Simms were on board, but it was not an easy proposition to sell to the rest of  RSA’s board, although I did.  The RSA Technology Committee had a big impact on board dynamics and ultimately on the long-term health of the company.  It is one of the WWC success stories that I will tell in more detail in a later post.

I can’t think of any reason that the board of directors of  a public company — especially a technology company — needs seven CFO’s, but that is the profile of far too many companies.  Even  on boards where the majority of the non-management directors are CEO’s, financial expertise overwhelms all other skills, and it is not healthy.  It’s hard to find a technology company that has failed in recent years where the  roots of failure were not widely known on that other planet outside the boardroom.  I emphasize public companies only because they are great targets.  Later stage privately held companies would also be wise to pay attention to board dynamics and find some way get a handle on the company’s technology.

Once I got over the stomach ache that Tom Perkins gave me, I realized why technology had a seat at the table of his boards.   Kleiner-Perkins got to be the world’s greatest venture capital firm by delving deeply into the  technology implications of business decisions.  Engineers have the impression that board rooms are filled with accountants who know very little about the details of the  business but are not shy when it comes to talking about it.  Enter the Technology Committee.

I always liked the scene in Annie Hall where Alvy Singer, the Woody Allen character,   is getting more and more annoyed by a guy standing behind him in a movie theater line who is carrying on about Marshall McCluhan, trying to impress his date:

Man in Theatre Line: It just so happens I teach a class at Columbia called “TV, Media and Culture.” So I think my insights into Mr. McLuhan, well, have a great deal of validity!
Alvy Singer: Oh, do ya? Well, that’s funny, because I happen to have Mr. McLuhan right here, so, so, yeah, just let me… [pulls McLuhan out from behind a nearby poster]… Come over here for a second… tell him!
Marshall McLuhan: I heard what you were saying! You know nothing of my work!…How you got to teach a course in anything is totally amazing!
Alvy Singer: Boy, if life were only like this!

The “dy” Logo

January 18, 2010

I enjoyed reading  the new book about innovation at Hewlett-Packard  that Chuck House and Raymond Price just published[1]. It’s quirky and curiously researched, but, most of all, I was happy to read their account of Carly Fiorina’s tenure as CEO at HP.  History was in need of some fact-based revision.   If ever worlds collided, it was at HP when Carleton S.  Fiorina took over the reins after a stunning rise through the executive ranks at ATT/Lucent.  Chuck  points out that, although Carly was not well-liked by her employees (even her direct reports, many  of whom  ultimately undermined her), she sowed the seeds for Mark Hurd’s success.

The executive suite at HP Headquarters on Page Mill Road in Palo Alto was in those days a row of large cubicles, and, in keeping with  the HP culture, there were no doors and no outer offices.   Everyone’s office  — including Carly’s — was really just a cubicle. Carly insisted that I have two offices: one in HP Labs adjacent to the museum-like offices of Bill Hewlett and Dave Packard — these were not cubicles but were real offices,  impeccably maintained in their original 1960’s orange-and-brown Madmen decor —   and the other next to hers overlooking  a Japanese garden.    Carly’s executive council met nearly every week in a nearby conference room whose glass wall looked out over the same garden.

Several   council members had offices elsewhere, but those of us who had direct access were within a thirty-foot radius of her office.  These were the Gold Badge days at HP when a favored few retirees were granted the privilege of unrestricted, lifetime access to any building and any office suite in the company. The daily comings and goings telegraphed events that would not be visible outside the CEO’s office for days or weeks, even among business heads who had broad authority over multi-billion dollar enterprises.  This turned out to be an important vantage point from which to view sand being  thrown in the gears during HP’s acquisition of Compaq, but I will save these stories for later posts.

Chuck House had been gone from HP for some time when Carly arrived, so his account is based on interviews with a relatively narrow slice of insiders who were his colleagues — an impressive number of people, to be sure, but in a company with 80,000 employees not enough for a definitive portrait.  But House has never been shy about charging ahead when the terrain looks interesting, a personality trait that once earned him a medal from Dave Packard for “Extraordinary Contempt and Defiance Beyond the Call of Duty.”  It was awarded to commemorate a mutinous tour of customer sites to demonstrate a new display monitor after HP management in Colorado Springs had decided to shut it down.   Nevertheless, House’s account gets many things right.  One of the things he misses was what Fiorina brought to HP:  a WWC focus on the customer that was foreign to HP’s engineering culture before her arrival.

House and Price defer to old-guard HP employees in characterizing Carly as a marketer, a fiction that was rooted more in style than in substance.  Fiorina was unnervingly accurate in her assessment of general  market trends,  like the importance of the internet to HP’s mainline businesses,  but, in fact, she was a consummate saleswoman.   What she brought to the table was not the “let’s-see -what -they-think-about-this” arrogance of corporate marketing organizations,  it was the ability to listen to customers, sift through encyclopedic  knowledge of internal plans and projects, and  envision a solution.  Sometimes a  solution was forthcoming.  Sometimes it took a little while longer than customers were willing to wait.  But sometimes solutions were sabotaged.   To have an HP outsider from the East Coast — a telephone equipment salesman, not an engineer — propose a solution to customer problems was an unpardonable sin to some.   It was a WWC culture class that she was slow to recognize.

She was widely criticized for her lack of operational experience, but  the truth is that Carly delegated operational authority too widely and to managers with suspect motives (including past and future pretenders to the throne).  As a newcomer,  I tended to apologize for injecting long-range thoughts into the very operational discussions of the Executive Council, until one day Carly stopped me and said: “You don’t have to apologize for that.  It’s true that we’ll never get to the long-term without taking care of the short-term, but it’s the long-term that makes the short-term worth doing at all.”

Council chemistry changed in the months before the Compaq merger. Vyomesh Joshi took over as head of the imaging and printing business unit.  V.J. is not only a brilliant executive, he is a skilled engineer, whose technical  insights  were mainly responsible for transforming ink jet printing.

The other major additions were Pradeep Jotwani and Iain Morris.  Pradeep had control of worldwide consumer  sales.  He was fond of  long discourses —  sometimes literary, sometimes merely speculative — but their effect was always to slow down a speeding train and turn the discussion in a direction that was more productive.  Iain is a big, brash, Harley-riding  Scott  who Carly recruited from Motorola to carve out emerging businesses  like handheld computers and  entertainment.  Carly quickly transferred   the personal computer businesses to Iain from Duane Zitzner’s  computer business unit where they had languished as unprofitable also-rans.  Morris knew hardware, software and manufacturing from his days at Motorola, and he was also a great salesman.

At one of his first Council meetings, Iain walked in with an HP laptop and stopped everyone cold when he opened it up and bellowed: “What’s wrong here?”  When you  looked at an open HP laptop from the back, the “hp” logo was upside down. It read “dy”, and of course,  that was the way most people saw the laptop:  open and  from the back, inverted logo.  If anyone before had noticed this, it never made it to the upper reaches of management.  The order went out immediately to invert the logo and all of the millions of HP laptops produced since that time now display the logo right side up,  so that it reads “hp”.  It upset some of the industrial designers who argued that laptops were closed a lot of the time and that the orientation of the logo doesn’t matter when a laptop is closed.  It took a salesman’s eye to recognize that it was stupid to have millions customers staring at a “dy”  laptop.

This episode followed on the heels of two other quick-shifts.  One involved HP’s always painful  Federal sales performance.  I will talk about this more fully in a later post.  The other involved architectural consistency,  a concept that bridged customer issues and product design.

Shortly after VJ took over the imaging and printing business, he held an advanced projects review for me in San Diego.  I was struck but the ubiquity of infrared (IR) connectivity ports on HP printers and cameras, and mentioned it to VJ.  He had many compelling reasons for insisting on IR, but complained that Zitzner’s PC division had recently removed IR ports from HP laptops.

To Duane’s immense displeasure, I called  a meeting with some of his design engineers, ostensibly to review the component cost envelope for laptops.  At the end of the meeting, when everyone was worn out,  I asked about IR, and they had a string of good reasons to throw it out.  When I pointed out that HP printers, cameras, and PC’s no longer worked together, they just sat there blinking at me.  Carly overruled engineering objections and IR ports made  a miraculous (albeit short-lived) reappearance in HP laptops.

It would  not be apparent outside the CEO suite for months, but architectural consistency was a technology theme that would drive many R&D investment decisions, both near-term and long-term.   In an effort to jump-start a consumer-facing initiative, Carly had approached Sony about sharing some key technologies.  One of Sony’s success stories was the introduction of memory stick technology into a broad range of Sony products from hundred-dollar consumer entertainment devices to studio-quality video cameras that cost a half million dollars or more.  My counterpart at Sony was a CTO named Mario Tokoro, a computer scientist and engineer who had spent time at the famous computer science department at Carnegie-Mellon University.  Mario had been instrumental in arranging for memory stick technology across a staggering array of Sony’s consumer and business products. The idea of arranging product strategies around this kind of architectural unity would have sped up HP’s brief surge in Internet and Web technologies.  It was an idea that was undone by colliding worlds on a much different scale.


[1] Charles H. House and Raymond L. Price, The HP Phenomenon: Innovation and Business Transformation, Stanford Business Books, 2009

A Letter to the Editor

January 11, 2010
Alan Perlis

Alan J. Perlis

I had planned to write a post later this spring on the collisions between what engineers sometimes perceive as practical and what turns out in practice to be useful.  It’s a complex issue and there are examples that cut both ways, suggesting that a deeper understanding of both the underlying technology and the social “soup” where innovators thrive are needed to avoid some famous traps.  I mentioned this briefly in my discussions of the impact of social fragmentation on innovation and the pitfalls of ignoring social contexts.

Then the January 2010 issue of Communications of the ACM crossed my desk.  As I skimmed the contents, I was surprised to see my name in the headline of the Editor’s  Letter, an attack by the Editor-in-Chief Moshe Vardi on a thirty-year-old paper [ Social Processes ] that I wrote with computing legend Alan J. Perlis and my colleague Richard J. Lipton (author of the popular Godel’s Lost Letter blog and subject of Dancing with the Stars ).  The paper itself was controversial in its day and addresses exactly the WWC questions that I plan to write about.  It is extraordinary for an Editor of a professional journal to use his position to make derogatory comments about articles, especially to  further his own views.  Mr.Vardi’s letter demanded a response.  Lipton and I will jointly publish a longer and more technical essay on this subject at some point in the future, but today we are jointly publishing the following Letter to the Editor. The letter will also be sent to the Communications of the ACM.

In his  Editor’s Letter in the January 2010 issue of CACM entitled “More Debate Please”,  Moshe Vardi makes a plea for controversial topics in these pages, citing a desire to “let truth emerge from vigorous debate.”  It is a sentiment that we support as well. But we question Mr. Vardi’s judgment in using his editorial position to mount an attack on colleagues who were neither forewarned nor given an opportunity to respond.  Mr.  Vardi’s target was  our 1979 critique of formal program verification entitled  “Social Processes and Proofs of Theorems and Programs,”  It was co-authored with the late Alan Perlis, one of the originators of the field and a lifelong advocate for the kind of open discussion that the Editor advocates.  We can only hope that future contributors have higher standards for debate than does the current Editor, because his out-of-context references to the 1979 debate over the practical efficacy of formal verification, his ex-cathedra determination that the article was “misguided” and his ill-informed view of the decision to publish it have no power to illuminate  a serious subject.

We do not care to respond to Mr. Vardi’s substantial mischaracterizations and misstatements at this time, but we do think it is fair to point out that  the publication of “Social Processes and Proofs of Theorems and Programs,” was not a singular event that might be classified as either misguided or not.  “Social Processes” was a refereed article.  A preliminary version was accepted  by a highly selective conference program committee in 1976 and its presentation was attended by virtually every living contributor to the field.  It was then submitted to this journal and reviewed by anonymous referees. Its publication was followed by many months of public presentations and workshops, letters to the Editor, written reinforcements and rebuttals, and — several years later — a special issue of this journal devoted to the topic.  Mr. Vardi faults the editorial board for not publishing an opposing “counterpoint” article, a suggestion that — although it has all the “fair and balanced” trappings — would have been hard to reconcile with the confidentiality usually accorded to contributed articles that are sent to referees for review. The irony is not be lost on us  that we were offered no such opportunity prior to publication of his letter.

The article itself has been reprinted dozens of times and has appeared in several anthologies in the philosophy of mathematics.  Its publication and the ensuing debate have been the subject of social science research (Donald MacKenzie’s 2001 book[1] “Mechanizing Proof” remains the definitive sociological and historical analysis of both the paper and its implications for the field). If our arguments seem off the mark to Mr. Vardi, then perhaps the right course of action is to resurrect the social process that led to the article’s publication in the first place and jump into the fray. Until that time, the correct editorial position for CACM and its Editor is to let both the paper and the written record that surrounds it speak for themselves.  It strikes us as inappropriate, after thirty years of silence,  to use the cover of an Editorship to  attack unsuspecting passersby, especially while touting the moral virtues of free and vigorous debate.


[1] Donald MacKenzie, Mechanizing Proof: Computing, Risk, and Trust, MIT Press 2001, The Massachusetts Institute of Technology, Cambridge, MA

Climate Change, Ivory Towers and The Journal of Irreproducible Results

December 8, 2009

There’s a kerfuffle on the eve of the United Nations Climate Change Conference in Copenhagen. 1,700 email messages  that were supposed to be stored on a secure server somehow found their way to open servers and were rapidly picked up by bloggers and others, who jumped on the opportunity to use the sometimes embarrassing messages to discredit  the overwhelming consensus of climate scientists that the earth is warming at an alarming rate and that human activity is the most likely cause. Aside from the shocking coincidence of events — what are the chances that a massive, worldwide fraud would be exposed at the same time the conspirators are getting together to impose their new world order? — and the uproar among climate scientists — who are launching ad-hominem attacks at every skeptic who pokes his head above ground — are there other lessons to be drawn from this shameless bit of theater?  My Georgia Tech colleague, climate scientist Judith Curry, hit the nail on the head when she  pointed out that: (1) there is really nothing in the released messages that discredits published scientific results and (2) scientists are being incredibly counterproductive by retreating into their Ivory Towers and passing up the opportunity to educate and engage both skeptics and the public.  Her Open Letter to Graduate Students and Young Scientists should be required reading for everyone interested in how to keep worlds from colliding:

…even if the hacked emails from HADCRU end up to be much ado about nothing in the context of any actual misfeasance that impacts the climate data records, the damage to the public credibility of climate research is likely to be significant. In my opinion, there are two broader issues raised by these emails that are impeding the public credibility of climate research: lack of transparency in climate data, and “tribalism” in some segments of the climate research community that is impeding peer review and the assessment process.

For “climate science” you can substitute “innovation” and the message is the same. If you’ve circled the wagons and are shooting at anything that moves, the easy target is public understanding of not only science but innovation in general.  The American public is not interested in the long-term thinking required to make sense out of squabbles like this. There are simply not enough people like San Diego Florist Steve Boigon, who — according to the New York Times — downloads MIT physics lectures because he  finds that:

I walk with a new spring in my step and I look at life through physics-colored eyes.

Curry did not go after the easy targets. Instead, she talked honestly to students about the importance of climbing down from the Ivory Tower. The interactive relationship between basic science, technological innovation and public policy — what Donald Stokes calls Pasteur’s Quandrant —  is a hot topic these days, because  so many important societal issues can only be resolved at their intersection.

There’s a veil that conceals the inner workings of creative science and engineering  from the lay public, and attempts to lift it sometimes produce  bizarre reactions.  I was once struck speechless  at an all-hands meeting when one of my engineers stood to scold  the  CEO for making product decisions because he knew “nothing about electronics.”  A prominent member of my Board of Advisers at the National Science Foundation once countered criticism of his particularly cumbersome approach to software development by angrily proclaiming,  “Programming is like playing a piano.  Only virtuosos should do it!”  A world-renowned engineer once responded to an essay critical of his methods by widely distributing a letter entitled “On a Political Pamphlet from the Middle Ages.”  I was one of the young authors who was at the receiving end of that one.  When  outsiders try to lift the veil, the best course is to repair to the upper reaches of the Ivory Tower, hope that the hubbub goes away, and shoot down if it doesn’t.

It is a world view that is somehow wired into university training. The Medieval regalia, semi-religious icons,  and murmured  incantations that convey special status on the conferees reinforce the impression at every college commencement that something mystical has taken place. Science textbooks are uniformly silent on how science is done, presenting instead the subject as a linear, completed work — orderly in progression and tidy in its use of knowledge.  Nearly every engineering textbook guides  readers through well-rehearsed exercises to successful completion of design tasks. Why would anyone want to learn how to build a bridge that falls down?

Insiders, of course, know differently. What takes place behind the curtain is as important as the finished product.  Some of the best technical books ever written lift the veil.  Proofs and Refutations by Imre Lakatos describes  the centuries-long frustration of mathematicians  trying — and repeatedly failing —  to precisely define polyhedra.  The process led some of  the greatest mathematical results of all time. Why Buildings Fall Down by Mario Salvatori and To Engineer is Human by Henry Petrosky are both compelling arguments that progress in  engineering is inextricably tied to understanding engineering failure.  Insiders know that failure is part of the package.  That’s exactly what makes the most outrageous of the climate change attacks so improbable.

There is a sub-genre of humor devoted to obvious, boundlessly incompetent scientific failure, real or imagined.  The Journal of Irreproducible Results is perhaps the defining publication that holds technical vanity up to ridicule. An article entitled Peaceful Use of Nuclear Explosives helpfully noted that

Development of hydro power in the desert of North Africa awaits only the introduction of water

My personal favorite medical discovery was an announcement entitled The Incidence and Treatment of Hyperacrosomia in the United States:

Some very famous Americans  have indeed been afflicted with Acute Hyperacrosomia, among them Abraham Lincoln, George Washington and Lyndon Johnson.  Their condition is readily apparent upon comparison with normal individuals such as Napoleon Bonaparte, Truman Capote  and Dick Cavett…..Since the male population does express the condition to a higher degree, it falls primarily to the female population to objectively consider the risks of involving themselves with hyperacrosomic males…

The jokes are so well-known that Henry R. Lewis apparently had not second thoughts when he wrote The Data Enrichment Metho d:

The following remarks are intended as a non-technical exposition of a method which has been promoted (not by the present author) to improve the quality of inference drawn from a set of experimentally obtained data.  The power of the method lies in its breadth of applicability and in the promise it holds in obtaining more reliable results without recourse to the expense and trouble of increasing the size of the sample of data.

I have a hazy understanding of the data manipulation charges that climate skeptics are leveling at researcher, but I am pretty sure that The Data Enrichment Method was not involved.  There is also the issue of transparency that is specific to climatologists, but Curry handles that well. And then there are the charges that editors of journals were unduly influenced by political considerations.  Like the Inspector in Casablanca, I would be shocked — truly shocked — to hear that hundreds, perhaps thousands, of smart, educated, and highly ambitious people make decisions based on self-interest. The secret that Curry reveals is that it may be regrettable, but  it doesn’t matter in the long run.  Science is not an orderly, axiomatic progression of knowledge. It is a social process.

Even a brief peek under the veil would be enough to convince many fair-minded skeptics that if there were another, compelling, contradictory analysis of the same data, it would have by now appeared in a reputable scientific journal.  Why?  Because it would be a career-making result.  The article would write itself.  What editorial board could long resist publishing an epochal article?  History teaches that political manipulation is much more likely to focus on who gets priority as multiple groups rush to publish simultaneously.  It’s a to maintain a conspiracy when everyone is looking out for himself.  None of this means that everything that has been published is correct. It just means that it’s very unlikely that the shrill cries of  systematic fraud have any validity.



So strong is the urge to seek out systematic scientific fraud, that there is a magazine devoted to the subject. The Skeptical Inquirer (SI) is a kind of companion to The Journal of Irreproducible Results. It specializes in debunking academic myths and scientific hoaxes.  It has over the years exposed magicians, perpetual motion charlatans, creationists, and hundreds of scientific frauds.  Who are these crusaders?  They are the very power brokers that would have to be co-opted if the climate change conspiracy theorists were right.  Here’s a partial list of SI Fellows:

If there is  a less easily manipulated group under one banner, I have not seen it.

Judy Curry’s Open Letter does not only apply to climate scientists. It applies to every boardroom that squashes the discussion of how innovation takes place and every executive suite where technologists are too busy innovating to engage seriously with corporate management.  Of course, it also applies to the easy targets — facile business leaders who confuse near term planning with technical progress and are too quick to jump to the “bottom line” — but that discussion will have to wait for another post.

Murder, Starvation, Catastrophe

November 30, 2009

As I’ve gotten older, I’ve found myself reading more and more history. I am told that the way to appreciate history is not to “play it in reverse” – that is don’t look at history from today’s perspective where you already know what happened.  You have to “play it forward” – what was it like to live in that place and time and to have to make the big decisions of the day?  It occurred to me several years ago that we think of historical trends as big things.  Nations moving against nations.  The rise and fall of societies.  Then I realized:  Many of the big events took place in  familiar terrain  – collections of people organized around a more or less well defined set of goals and working toward a common purpose. And if you go back in history far enough – say 1,000 years or so — the numbers are also pretty familiar,  usually less than a million people.  In fact, nations and societies with 10,000 to 200,000 people were the norm.  In other words, they were in many ways like the modern business enterprise.

That’s worth saying again:  except for the details of time and place, there is really not a whole lot of difference between  modern enterprises and  societies of antiquity. The fate of large groups of people is determined as much by human aspirations and failings, reactions to threats, wise use of resources, and  the emergence of leaders as by anything else.

So with that as a backdrop I want to ask a couple of questions that seem to be completely unrelated to each other.

Question 1:  Why didn’t the 1940’s Western Electric  videophone make it?

Sure, the structure of the industry mattered, but it wasn’t lack of innovation that doomed the videophone.  After all. Video conferencing is ubiquitous today. So why didn’t that technology make it when today, for a hundred dollars,  you can stream high quality video to another hundred dollar device?  The culture of innovation is fundamentally different today than it was when the videophone was developed by Bell Labs in the 1940’s.  In fact the species of innovator that Bell Labs represents is today very nearly extinct.

My Second Question is:  What was the person who chopped down the last tree on Easter Island thinking about while he was doing it?

In truth, I can’t claim credit for the question. It was posed by Jared Diamond in Collapse:  How Societies Choose to Fail or Succeed, an historical and geographical tour-de-force that poses a framework for looking at decisions that societies make on their way to success or failure.  Those decisions invariably relate to:

  1. environmental damage
  2. climate change
  3. hostile neighbors
  4. friendly trade partners, and
  5. cultural response

Let’s take the similarities between ancient societies and  modern enterprises seriously – they involve similar numbers of people, they define their own value systems.  The historically successful route for both was a kind of vertical integration that made it reasonable to work and innovate in relative isolation. The way that 21st century companies innovate in the face of environmental damage, climate change, and hostile neighbors is very important in their long-term prospects for survival.  On the other hand, how they treat their friendly trading partners determines how much of the work for survival has to be carried on their shoulders alone.  And what about cultural barriers?  The whole point of WWC is to learn from companies that innovate around the right values but are culturally unable to execute effectively.  Diamond’s language is anthropology, not business – but we’ll see in upcoming posts that the difference between success and failure is often rooted in the same factors that led to  murder, starvation and catastrophe in the ancient world — and ultimately to the collapse of societies.