When what you’ve learned holds you back

Posted on October 23, 2019

Keep it flowing

Heart disease remains the leading cause of death for most people groups around the world, despite significant discoveries that today extend life and even restore patients to full function after events that previously would be unsurvivable.

Research into surgical intervention has been particularly fruitful. A now-common tool in the cardiologist’s arsenal is the placement of a stent, which is a miniature metal scaffold carefully threaded up the arteries leading to the heart and embedded at the site of a blockage, holding the vessel open as if bracing a pipe at risk of collapse.1 Such stents are now used routinely and quite profitable for both their manufacturers and the physicians who have built practices around placing them.

The logic behind the stent appears impeccable: patients complain of chest pain or some associated symptom, imaging reveals a blood flow issue somewhere in the network of cardiac arteries, so the obvious next step is to remedy the blockage—the fact that those involved stand to divvy up a total fee that can reach tens of thousands of dollars is a happy side effect.2 The ubiquity of stenting has made the procedure a default treatment in a range of cases, ranging from full-blown heart attacks to more stable but persistent chest pain.

The only problem with this practice is that careful research has shown that, for certain indications, a stent accomplishes exactly nothing. Read more…

One variant is even coated in medication that slowly seeps into the patient’s bloodstream at the site of the blockage. ↩
To paraphrase the common saying, it’s difficult to get someone to understand something when their income depends on their not understanding it. ↩
Sorry to my 9th grade biology teacher Mr. Erlick who taught me this. I know you were just going with what the textbook said. ↩
Phrenology lives on the expressions “high-brow” and “low-brow”, as those with more elevated foreheads were supposed to be more sophisticated than the lumbering men with more prominent brow ridges. ↩

Retrospective success and what you control

Luck versus insight

Posted on October 16, 2019

The everything store

36-year old Jeff Bezos had already made a name for himself as the founder of a promising young technology firm, but in the year 2000 Amazon was just one of many companies storming the frothy capital markets to achieve improbable valuations. Even at that stage Bezos was circumspect about his success, emphasizing the word “lucky” to characterize his story.

He recognized the confluence of enabling events was largely out of his control—coming of age in the era of computers, the rise of the consumer internet, a stable economic environment, increasing acceptance of digital commerce, plus a career that positioned him to observe these trends.1

At the time Bezos had no idea just how lucky he was. Though reasonably successful, nothing indicated he would eventually become the richest person on Earth on the back of Amazon’s insatiable business model. The path to get there would be neither smooth nor obvious. Read more…

Warren Buffett has discussed the concept of winning the ovarian lottery, which meant he was born in the United States at a time in history when his skills were unusually valuable. ↩
The latter was a company dedicated to selling pet food online, with expensive and memorable marketing campaigns involving a sock puppet. It was incidentally the recipient of heavy investment from none other than Amazon, which sunk money into several ill-fated ventures. ↩
“Alexa, what’s Amazon’s share price?” Over $1,700, and it’s been as high as $2,000. #winning ↩
It turned out the supply of investors willing to pump hundreds of millions of dollars into any concept with an “e” prefixed to it was finite. ↩
No one knows what might have been, though plenty of would-be tycoons have ideas. The founder of Pets.com still believes that business model was sound, though the alternate history is unprovable. ↩
Hence the rise of index funds, which recognize that a small fraction of managers might outperform the market, but its almost impossible to figure out who they will be a priori. ↩
Helped along by a very savvy marketing team, who really milked their moment in the spotlight. ↩
Including a parrot and a camel, neither of whom were as familiar with Die Mannschaft as Paul. ↩
Or kick themselves after the fact for not betting based on his predictions. ↩
Except in those rare cases when someone found a flaw in the game design, as with this American couple.↩

out-of-band

Posted on October 14, 2019

(adj., obscure) describes a signal or information received outside of the mechanisms used in standard operations; derives from the concept in telecommunications or networking in which a separate channel is reserved for relaying special messages outside of the core data stream; receiving an out-of-band message can be a means of alerting someone to a significant issue that might otherwise be obscured if one remains engrossed in heads-down, day-to-day work, as in “Discovering that our largest customer was having quiet meetings with the competition was a pretty important out-of-band message to leadership”; similar to ping and optics and even eat your own dogfood, this jargon has transcended its technical origins to be adopted by those who want to veneer engineering sophistication over their more prosaic utterances

Staying connected to the right outcomes

Work that matters

Posted on October 9, 2019

Fruit salad

Research in Motion was on top of the world. The Canadian technology firm’s keyboard-equipped phones had become a defining part of the corporate zeitgeist. They were standard issue for strivers who could now double-thumb their email responses from anywhere.1 The truly dedicated and fashion-indifferent would even holster the clunky devices on their waists, treating them like a detective might handle his service weapon.

With its tight control of the network infrastructure, the company promised IT departments a level of security and reliability other providers couldn’t match. It helped pioneer push delivery, eliminating the need to check for new messages. Instant notifications presaged the Pavlovian situation that grips people everywhere today, earning its flagship product the nickname of CrackBerry.

At one point global market share surpassed 20%, and by 2009 RIM was considered the fastest-growing company in the world. The consumer-focused phones Apple and Google were introducing were viewed as toys, which couldn’t be a true threat to the BlackBerry’s position atop the technology mountain.2 Read more…

The phenomenon became so intense that some developed a condition known as “Blackberry thumb”, like carpal tunnel syndrome but restricted to one digit. ↩
Google and Apple took very different approaches. The former developed the open Android system for other manufacturers to use, while the latter maintained exclusive control over tightly-coupled hardware and software, an approach that is just minting money. ↩
Those growing up in the touchscreen world won’t grasp just how strange it was to have a phone without buttons. Perhaps we’ll look at the first driverless cars without steering wheels the same way. ↩
Making TikTok videos is where it’s at these days. ↩
Hence the cliché about doing the same thing repeatedly and expecting different results. ↩
In the case of the World Bank, you pivot to eliminating global poverty, which will always be both important and unachievable, as utopias never materialize. ↩
Research in Motion became so identified with its product that it changed its name to BlackBerry, unfortunately just as the device itself was falling to zero market share. ↩

put to bed

Posted on October 8, 2019

to finish with in a manner that requires no future revisiting, as in “Let’s do one final check of those assumptions and then put the financial model to bed”; evinces the unspoken desire to be done with a topic and move on to the next thing; can be uttered in complex contexts where work may drag on without a definite endpoint and decisiveness in the face of ambiguity is necessary; alas, in the real world when things are put to bed they often wake up the next morning lethargic and groggy

pressure point

Posted on October 3, 2019

var. pain point, refers to a notable source of difficulty, friction, or discomfort, which requires special attention to address or will otherwise be a focus of work, as in: “Agreeing on the new voting structure has been the biggest pressure point in this deal”; can be a means of alluding to unpleasant challenges in a way that sounds dispassionate and impersonal; correctly recognizing and mitigating pressure points is an important condition for successfully achieving a project’s objectives, and conversely misidentifying or ignoring them can derail one’s efforts

Healthcare and the tragedy of the commons

More is less

Posted on October 2, 2019

Land grab

In more pastoral times, town layouts might include a designated area of public land on which anyone was free to let their livestock graze. An early example of this was Boston Common, originally a pasture for cows before its transformation into a prime urban park, whose name still echoes its original shared purpose.

Bostonians soon realized that unfettered access by those with larger herds would overwhelm the land. Some restrictions were needed to ensure a few wealthier neighbors didn’t ruin the ground for everyone, because the incentive for any individual would be to add animals to their flock regardless of the broader effects. Crowding would make finding suitable forage harder for all, but most of the incremental burden would be borne by the other owners.

If this bovine arms race reached its natural conclusion the result would be nothing but an unsightly dirt patch. Although societies grasped this intuitively, the process was first formally described in the 1800s by a British economist, and in a seminal journal article a century later received the memorable descriptor of “tragedy of the commons”.1 The concept has gone on to enduring explanatory fame in economics and ecology, among other disciplines.

In a subtle way, this phenomenon underpins one of the most dysfunctional parts of the American economy: the healthcare sector. Read more…

Written in the 1960s during the peak neo-Malthusian panic over global overpopulation, the article’s thesis that family size needed to be regulated, presumably by diktat, has not aged very well. ↩
All numbers have been indexed to 2019 values using the Consumer Price Index, because if Economics 101 taught us anything it’s that a dollar today isn’t the same as a dollar yesterday. ↩
Some of those advances have certainly extended life, like the discovery that bloodletting wasn’t the way to cure diseases, which came unfortunately too late for George Washington. ↩
In recent times demonstrated most dramatically, and tragically, in the opioid crisis. ↩
As a management consultant who works in healthcare, I suppose I must include myself in this parade. ↩
And some of the former too, and they can figure out a way to monetize that later. ↩
One of the buzziest initiatives is a joint venture of Amazon, Berkshire Hathway, and JP Morgan Chase named Haven, which is still in an early stage and whose initiatives remain unknown to the public. ↩

Competing when you can’t compete

Playing a new game

Posted on September 25, 2019

Divided loyalties

In the early 1980s, a swirl of deregulation was upending the cozy and profitable arrangements U.S. airlines had enjoyed for years. Routes had previously been tightly restricted, and fares were regulated to ensure a comfortable return for owners.

These market constraints were comprehensively eliminated in 1978, leaving companies to figure out how to compete in the new, less predictable environment. Some enterprising executives realized they would need different tools to stand out against a slew of others offering what were broadly indistinguishable products.

It was in this milieu that a regional carrier named Texas International Airlines introduced the first modern version of something that today dominates the industry: a frequent flyer program. Instead of simply selling individual flights and competing primarily on price, the move shifted transactions into the framework of a longer-term relationship. Scoring credit in a loyalty scheme induced travelers to book their next flight with the same airline to maintain progress towards some defined reward. Read more…

Even though nearly the whole world is metric, many airlines around the world still use miles as the name of their currency. Frequent flyer kilometers just doesn’t have the same ring to it. ↩
These pioneering hotel loyalty programs rewarded their guests with airline miles redeemable in the programs that had arisen a few years earlier. ↩
A huge part of their success is due to the IRS ruling that points are not taxable, even though they have value and function very much like a currency. This has supported the creation of a parallel, tax-free travel economy outside the purview of government regulations. ↩
None of these innovations were able to forestall the bloodbath that ensued, as dozens of airlines merged and were bankrupted until the industry reached its present configuration. ↩
With consolidation many airline markets are approaching oligopoly, so by maintaining stable prices and avoiding price wars they are sometimes just carving up the market among themselves. ↩

pound sand

Posted on September 24, 2019

an irritated brushoff or deflection delivered when one party is fed up with the behavior or antics of another, as in “If we don’t show up to the next meeting with a firm proposal they’re going to tell us to go pound sand”; pounding sand is here noteworthy for its tedium and pointlessness, and being encouraged to do so intentionally telegraphs displeasure at the current state of affairs, including a whiff of contempt; not often used in direct conversation with the object of disdain for fear of sounding unprofessional or even archaic, as the expression itself is many decades old and can come across as folksy or old-fashioned; unlike much jargon that is designed to elide potential conflict or unpleasantness, this expression amplifies it

pass the monkey

Posted on September 20, 2019

to shift an unwelcome burden onto another party, for example from subordinate to manager or amongst the various parties to a complex transaction; the metaphor uses monkeys to evoke their potential to cause disruption or chaos, given their wildness, agility, and general chittering; the expression derives from a classic Harvard Business Review article from 1974 in which managers are counseled to ensure monkeys remain on the backs of their subordinates, which reduces the risk of getting bogged down in inefficient work and empowers others to act; a monkey clinging to one’s back is presumably difficult to confront directly or remove but cannot be left unaddressed, for obvious reasons