The clip above is from my favorite show, Arrested Development (full scene here, though it has a bit of unsavory language in it). Michael finds out that the seeing-eye dog he is watching for the day–named “Justice”–is actually blind.  I was reminded of it while re-reading F.A. Hayek’s The Road to Serfdom (illustrated version here), where he offers this insight:

It is significant that one of the commonest objections to competition is that it is “blind.”  It is not irrelevant to recall that to the ancients blindness was an attribute of their deity of justice (pg. 134 of this edition). 

Hayek goes on to elaborate his argument for why “blind” competition–though it may create what you and I consider to be unfair outcomes at times–is significantly better than the alternative of a planned system of distributing jobs, resources, products, and wealth.  In any system that attempts to create “fair” outcomes, a person with authority to use force is the arbitrator of who gets what.  Or, as Hayek chose to phrase it, we quickly have a “who, whom” question.  ”Who plans whom, who directs and dominates whom, who assigns to other people their station in life, and who is to have his due allotted by others?” (pg. 139).  Someone must coordinate the system to the “fair” outcomes that are decided upon; and by “the system,” we mean the choices that individuals make about how they spend their lives.

Societies that choose to follow paths of ensuring end-state equality tend to end up in a state of arrested development, in terms of both economics and–more importantly–individual freedom.

It turns out that our modern conception of Lady Justice (as Chris wrote about in an earlier post) is a hodgepodge of Roman, Greek and other deities.  In fact, she wasn’t even blind–contrary, it seems, to what Hayek supposed–until the 16th century.  From Wikipedia,

Since the 15th century, Lady Justice has often been depicted wearing a blindfold. The blindfold represents objectivity, in that justice is or should be meted out objectively, without fear or favor, regardless of identity, money, power, or weakness; blind justice and impartiality. The earliest Roman coins depicted Justitia with the sword in one hand and the scale in the other, but with her eyes uncovered. Justitia was only commonly represented as “blind” since about the end of the 15th century. The first known representation of blind Justice is Hans Gieng’s 1543 statue on the Gerechtigkeitsbrunnen (Fountain of Justice) in Berne.

The idea of the Rule of Law–one of the foundations upon which MBM is derived–is strongly related to the idea of impartial courts and laws.

Arrested Development, blind, Hayek, Justice, Rule of Law

I’ve been studying the life and ideas of Abraham Maslow for a current project. I’ve come to admire him for a number of reasons, including his commitment to help people and constant search for truth, no matter where the source. Maslow’s intellectual curiosity and honesty makes reading his journals and biographies fascinating.

My current book is The Right to be Human. It chronicles the everyday details Maslow’s life along with his intellectual journey. Maslow kept extensive diaries and notes, which gives us a peak into his thinking throughout his career. When Maslow moved from Brooklyn College to Brandeis University in the 1950s, he noticed a change in the type of students he was teaching:

“One day, feeling particularly frustrated by a roomful of blank expressions after he launched into one of his favorite descriptions of self-actualizing people — their commitment to a cause or mission in life — he suddenly asked the class, ‘How many of you plan to become psychologists?’ A number of hands shot up. ‘How many of you plan to become great psychologists — another Freud?’ No hands. ‘Why not?’ Maslow demanded. ‘If you don’t want ot be a great psychologist, why bother going into the field at all? Who do you think will be the great leaders in psychology, or history, or medicine, thirty years from now, if not you here in this room?
Maslow’s hard-working students at Brooklyn College had shown ambition, an unabashed desire to shake the world, that he missed among his students at Brandeis” (from The Right to Be Human, pages 217-218).  

The book goes on to describer Maslow’s disdain for the management trend in the 1950s to look for the “organization man” instead of the ambitious go-getters. (Note: It’s clear Maslow didn’t believe in running people over to get to the top of the management food chain. Yet, the idea of seeking people who want to be cog of the organization or less than what they could be was equally bad.)

How would you respond if someone asked you for MBM’s take on ambition? Is it something we look for or cultivate in employees? What can we learn from the market about ambition?

I don’t think most people learn with big giant “A-ha” moments. My experience leans toward the lurching-fumbling-almost-getting-it-grasping-at-ideas moments AND THEN an “A-ha.” If we can find ways to push people toward the “A-ha” a little faster, then we all learn a little quicker (and hopefully) get better faster.

Recently, I’ve been reading David Brooks’s The Social Animal. He intertwines stories with facts and research to describe how people learn. It’s been a surprisingly enjoyable read so far. However, when I stumbled across the passage below, I realized Brooks is still stumbling and fumbling through the power of self interest and freedom. He’s not quite grasping it, but he sees the symptoms:

“The United States is a collective society that thinks it is an individualistic one. If you ask Americans to describe their values, they will give you the most individualistic answers of any nation on the planet. Yet if you actually watch how Americans behave, you see they trust one another instinctively and form groups with alacrity” — The Social Animal page 156.

Does this quote ring true to you? It rings true to me in light of self interest and the power of the free market to bind people together through cooperation while they still serve their own purposes. I think the author may be stumbling closer to an “A-ha” moment about self-interest.

If I told you I was going to have lunch with the author, what advice would you give me to help me push him toward an “A-ha” moment?

economic freedom, hypothetical, self interest, Spontaneous Order

Throughout The Science of Successthere are pages with pictures and quotes of great thinkers like Hayek, Mises and Maslow. They kick off each chapter — perhaps as a signal of the importance of their contributions to MBM. After having a discussion with a few folks about having the intestinal fortitude to act on the Guiding Principles (even when it’s not cool), the first quote in The Science of Success jumped out at me when I opened it to look something up.

“Don’t take counsel of your fears” (Science of Success, page 1).

Does this seem like an odd way to start out a business book? This quote doesn’t imply you should eliminate your fear. It just simply says you should not listen to your fears. This quote rings true to me. MBM organizations expect much from their employees. Employees aren’t going to be told precisely what to do. Employees are supposed to be entrepreneurs, searching for opportunities and taking initiative to create value.  It’s not just about a pair of hands or a strong back but finding the way each unique individual can most contribute. That’s a tall order… a bit scary when you think too hard about it.

I know from a personal perspective, I constantly have to try to set aside my fear of giving people tough feedback. It’s hard for me to look someone in the eye and tell them something negative. Yet, the Guiding Principle of Respect calls on me to give people honest feedback that will help them to improve. It’s an expectation of me in an MBM organization to give people feedback — even when it’s negative. I’ve listened to my fear in this area before. It’s probably something I’ll always have to work on.

How have you experienced (or heard of others experiencing) fear when trying to apply MBM? How do we even know if we are taking counsel of our fears? What can we do as colleagues to help one another not take counsel of our fears?

An updated version of Hayek’s The Constitution of Liberty was released earlier this week, and–from the scholars I’ve spoken to and the reviews I’ve read–it looks like an improvement over previous versions.

In The New York Times Francis Fukuyama aptly describes the biggest improvements in this edition [ht to Logan for passing this along]. 

The new edition of “The Constitution of Liberty,” which was first published in 1960, differs from the original primarily insofar as the extensive endnotes in the original edition have now been placed at the bottom of the page and heavily annotated by the editor, Ronald Hamowy. The notes, often more extensive than the text itself, make clear the extraordinary breadth and depth of Hayek’s erudition, and his ability to wander far beyond economics into history, philosophy, biology and other fields.

He goes on to do a superficial job of critiquing the book, and even gets the title of one of Hayek’s major works wrong–”‘The Uses of Knowledge in Society’” (it should be “Use“)–but it’s an interesting read nonetheless.

Even more interesting to me was the video below.  It’s of a panel discussion of this book and Hayek’s influence held by The Cato Institute, featuring Bruce Caldwell, Richard Epstein, and…wait for it…wait for it…George Soros.  Soros, who describes his worldview as diametrically opposed to Hayek’s, stole the show for me when he urged those who philosophically disagree to engage in open debate and conversation of ideas, as opposed to talking past one another.  It’s slow, but worth the watch if you are interested in better understanding Hayek.

And finally, since we’re talking about Hayek, I can’t help but repost the recent Hayek vs. Keynes rap battle.  Enjoy.

Hayek, Hayek vs Keynes, Keynes, The Constitution of Liberty

I tried to find a short clip to explain Howard Gardner’s Multiple Intelligence Theory. My goal was to tie this theory into comparative advantage (as is done on page 87 of Science of Success). However, almost everything I found with quick searches on the web tied this theory back to learning style. This is a disappointment because this theory is much more than just learning styles.

Before getting into this too deeply, Gardner’s definition of intelligence is important:

“I define an intelligence as a biopsychological potential to process specific forms of information in certain kinds of ways. Human beings have evolved diverse information-processing capacities – I term these “intelligences” – that allow them to solve problems or to fashion products. To be considered “intelligent,” these products and solutions must be valued in at least one culture or community (Changing Minds, 29).

Given what you know about the theory, how do you think we can apply this theory to get better results in the workplace? I consider all comments on this post brainstorms, so feel free to take a chance and go outside the box.

Rarely do I get excited about a business book before I read it. In my experience, the vast majority of business books are boring. Some of them are great, but they are so few and far between, I don’t get my hopes up. But my hopes are up. After reading this post by Bob Sutton on Peter Sims’s Little Bets: How Breakthrough Ideas Emerge from Small Discoveries, I’m hopeful. Here are two quotes from the intro, which you can read the first 20 pages of here:

Instead of trying to develop elaborate plans to predict the success of their endeavors, they do things to discover what they should do. They have all attained extraordinary success by making a series of little bets… When we can’t know what’s going to happen, little bets help us learn about the factors that can’t be understood beforehand. The important thing to remember is that while prodigies are exceptionally rare, anyone can use little bets to unlock creative ideas.

The sentences above probably aren’t shocking to any of you who have studied the mental model of experimental discovery. I doubt the theory will be anything new. However, what I’m excited about is the prospect of many examples across different industries.

These methods are decidedly not  ways of just trying a lot of things to see what sticks, like throwing spaghetti against a wall. The most productive creative people and teams are rigorous, highly analytical, strategic, and pragmatic.

You know I’ve discussed the whole spaghetti thing before. I’m looking forward to reading what Sims has to say about how to make little bets in a systematic way.  The author claims the result isn’t a step-by-step process, but a way of thinking.

I’m hoping to have Little Bets read in the next month. If you’re up for nerding out with me on a business book, I’ll do my best to get a post written up on May 30th and hopefully we’ll have some discussion about it. What business books are you still hoping to read? If you took time to read the intro, what do you think of it so far?

Hundred Percenters: Challenge your employees to give it their all and they’ll give you even more by Mark Murphy asks and answers, “Why don’t employees give 100%?” Murphy’s theory is leaders need a combination of challenge (not the challenge process, but challenge in a conventional sense) and emotional connection to push people to give 100%. The lack of either or both causes people to check out. 

Below the page break is my typical lists of likes and dislikes with an addition. I am going to be careful to point out the difference between style preferences and things that align or don’t with MBM.

Read the rest of this entry »

If you didn’t get a headache from reading that title, then hang with me as I try to piece together something I noticed the other day.  I’ve been thinking about part of Micheal Polanyi’s Personal Knowledge when he discusses how scientists pick problems. Scientists don’t pick problems that are too hard or too easy. Given my past obsession with the Human Action Model, something clicked and I saw how the two fit together.

First, why would someone act on a problem they thought was too hard to solve? There’s no belief one can get there. Even if they had a sense of felt unease and a clear vision of a better state, if something is too hard why do it? For instance, I’d love for there to be hoverboards (as many Associates and friends can attest, I’ve occasionally yelled said with gusto ”Where is my hoverboard already? It’s almost 2015!”). I have the felt unease and vision of a better state (I’ve seen Marty McFly zoom on his hoverboard), but the problem is so hard for me that I don’t act to try to build a hoverboard. I can’t see the way to get to the better state.

On the other hand, if a problem is too easy would I have a sense of felt unease? It’s like when you’re playing a puzzle with a 5-year-old. While the puzzle is tough for the child, you can see how it goes together right away. If the child leaves the puzzle half-done, why should you finish it? Polanyi writes in “Republic of Science” about a scientific advancement needs to have a certain level of uniqueness to be valued by the community. Thus, for a scientist, a problem that is too easy wouldn’t have the originality to help her career.

What do you think? Am I trying too hard to put together these two thinkers (it wouldn’t be the first time)? When have you had “aha” moments about two thinkers/ideas fitting together?

Chris sent over a great blog called Foseti.  The author has spent years working in government, and a recent, entertaining post answers FAQs about working in the belly of a large bureaucracy.  Before diving into the specifics, he spends time providing his view on how individuals in the government machinery tend to make decisions:

We spend inordinate amounts of time and money determining who will occupy short-term elected positions in government. Once there, people make a living thinking about what these politicians should be doing. On the other hand, we spend almost no time thinking about who will permanently occupy the bureaucratic positions that are actually responsible for implementing governance.

The vast majority of the employees of the government, like me, are unelected and – for all intents and purposes – cannot be fired. Focusing on the 0.0001% of government employees that get elected (obviously!) misses the remaining 99.9999%. Virtually everyone thinks that its possible to “change” government while maintaining 99.9999% of its employees.

[I don't know if that math above is correct, but from a quick internet search I found that there are between a huge amount and a ridiculously huge amount of non-elected government employees relative to the number of elected officials.]

Good ‘ole Ludwig von would surely read Foseti’s post and chuckle, judging from his 1944 Bureaucracy.  In it, he discusses the inherent struggles with any organization attempting to make decisions in the absence of profit and loss signals from a market.  Working in multiple non-profit organizations, I can attest to these struggles.  “The guide” of resources in a business, he says, “is the market price” (19).  In the absence of those signals, we need other signaling systems to allocate resources, typically in the form of rules, regulations, and forms.  This “bureaucratic management,” as he calls it, “is the method applied in conduct of administrative affairs the result of which [have] no cash value on the market”  (39).

He even goes so far as to say “that no profit-seeking enterprise, no matter how large, is liable to become bureaucratic provided the hands of its management are not tied by government interference.” 

Does Mises overstretch here? 

p.s.  One thing to note after reading Mises’ book: my feel is that he definitely has a anti-big government bias, but he does not seem to have a bias against “bureaucracy” or “bureaucrats” in and of themselves.

Bureaucracy, federal government, Foseti, Mises, red tape