Managing Risk

 K. Scott Griffith’s forthcoming book, The Leader’s Guide to Managing Risk, describes how most of what we see in terms of risky situations is just the tip of the iceberg. What we often fail to see are the numerous systems and people aspects lurking below the surface that need attention as well.

Griffith can tell us a lot about success and how to develop high-reliability, high-performance teams and systems. He’s had an enormous amount of success and is very familiar with systems thinking and how we all can create more robust mechanisms/systems/experiences for the probable risks. The author coaches us to think differently and coherently puts a way of thinking that can help us all.

It is, however, a pedestrian, common-man way of thinking through reliability, robustness and risk. I’m sure the author is familiar with a lot of techniques: accelerated failure testing, and the like, as well as Failure Mode Effect Analysis (FMEA), which requires us to step through the mechanical, cyber-system, digital and human elements. We have to think through potential failures at each step, each element. We have to rate its probability of occurrence, its severity and the likelihood of detection. High scores in those three aspects necessitate mitigating efforts to reduce probability, reduce severity or improve detection. 

The author sufficiently covers redundancy to reduce probability (because we’re putting elements in parallel paths and “both” would have to fail). Not all systems can accommodate such mitigating factors. And humans are notoriously inept in multiple-stage “inspection” points—such as auditing, observing safety system changes, etc.: inspector A assumes inspectors B & C will catch the problems, while inspector B assumes A has already caught them or C will catch them….(you can probably guess inspector C’s reasoning as less-than-full attentiveness).

The audience for this book are the people who don’t want to pick up a small-ish article or book on FMEA.

[A scene from the movie, The Charge of the Light Brigade, a tragedy that could have been avoided with clearer communication and shared intelligence.]

The Geek Way to Run Your Company

 I appreciated getting an advance copy of Andrew McAfee’s forthcoming book, The Geek Way: The Radical Mindset That Drives Extraordinary Results. I’m all in for extraordinary results, as I’ve been fortunate enough to have seen it happen in turnaround situations—where the employees are hungry for a new style of leadership.

McAfee, an author of many tech books, now puts the culture of successful companies in front of us. He asserts that the culture of speed, openness and other elements provide the medium for growth. He provides data to support his claim, which I’ll discuss below. While the author claims this new way of operating companies started in the 2000s, and is codified in a Netflix presentation openly shared with everyone, he also says that the crux of the Geek Way is found in a stack of business books sky-high. Which probably would include “Creativity Inc.” by Ed Catmull about Pixar’s culture. McAfee’s experience makes this a fun read, but for those of us who have read the mile-high stack of business books about cultures of mutual trust—competence, reliability/dependability, openness, acceptance (of failure in particular) and integrity—and driving accountability, responsibility and creativity will hardly learn much here. We would have seen similar things in Deming’s work, the culture of Westinghouse’s Hawthorne Works operations from the 1920s and 1930s, famous Skunkwork developments for World War II, high-reliability/high-performance military and civil operations teams, and so on. Much of McAfee’s advice can be found in “Built to Last” by Collins and Porras. Or McFarland’s “The Breakthrough Company” for the small- or medium-sized enterprises. Still, this book will help start-up leaders set the right course for their fledgling companies.

Like many other business books, McAfee’s suffers from a lack of contradictory evidence. He and others can write about the 10-50 successful companies practicing the Geek Way. He cannot or does not uncover if there are thousands of companies practicing the Geek Way outside of Silicon Valley, outside of tech, and how successful or not they are. There may be many that don’t succeed. How many tech startups have died, and yet had a Geek Way culture? How many other business failures—and the number is staggering in the first five years of any one business—weren’t prevented by the Geek Way? We may never know because Harvard Business School—of which McAfee had been a faculty member—cannot tell us. There isn’t a database for this.

While he applauds the social aspects of Geek companies—cultural evolution—he neglects some of the complaints that have happened even inside his star companies. There’s still tribalism in society and in tech companies: gender, race, caste are still obstacles to hearing and accepting another’s input or feedback. While constructive debate might be healthy, psychological safety can be key as McAfee points out. Still different personality types and different inherent motivational bases need different communication environments, methods and venues for safety and overcoming timidity. Ethical failures have also occurred in Geek Way companies. Maybe in a few decades we’ll know if Geek Way companies are “built to last.”

Likewise, the inertia in organizational dynamics and corporate culture requires several years to change a non-Geek company into one practicing the Geek Way. It’s why some startup kings and queens have had a hard time moving over to established companies. The people have “grown up” under a different kind of leadership and have a hard time trusting the new leadership styles, especially in the lower ranks who have less exposure to the C-suite.

The author avoids the trap of multiple anecdotes masquerading as data. However, McAfee fails to discern the quality of the data he includes. For example he touts a study of GlassDoor comments. GlassDoor surveys are self-selected, not random. This has an inherent bias towards the theoretical ends of company-culture distributions: the really bad and the really good. So we know nothing of the cultures—perhaps some operating in the Geek Way—of the middlingly rated, middlingly successful companies. 

While there are some inherent flaws in McAfee’s approach—but not unique for business books—his work can be important for those who need to hear and want to hear how the successful tech companies are thriving.