Transcendental Generalization

Excerpts from Fortune, July 6, 2009

Bill Gates

Well, I’ve gotten a lot of great advice from Warren. I’d say one of the most interesting is how he keeps things simple. You look at his calendar, it’s pretty simple. You talk to him about a case where he thinks a business is attractive, and he knows a few basic numbers and facts about it. And [if] it gets less complicated, he feels like then it’s something he’ll choose to invest in. He picks the things that he’s got a model of, a model that really is predictiv and that’s going to continue to work over a long-term period. And so his ability to boil things down, to just work on the things that really count, to think through the basics–it’s so amazing that he can do that. It’s a special form of genius.

…Warren is so nice to everybody–how does he say no in a nice way? Or how does he think about priorities and have that explicitly in mind? And he turns down an unbelievable number of things, and yet everybody feels great about it. His grace in talking to people where he’s always saying, “You know, you probably understand this better than I do, but here’s how I messed it up when I first got involved in this.” You know, that’s a special talent, and I do find myself thinking, Hmm, how would Warren say this in a friendly fashion?

There was a case at the annual meeting where somebody asked a question about should you sell the stocks that have gone up and keep the ones that have not? And he sort of said, “No, you look at the value of the business.” and then Charlie [Munger] added, “He’s telling you your conceptual framework is all wrong.” Which is in fact what the answer had been, but there wasn’t one element of, “Hey, dummy…”

Jim Sinegal, Co-founder and CEO, Costco Wholesale

…[FedMart’s] founder, Sol Price, taught me a lesson that was pretty simple, but also true: If you’re going to go to the trouble of hiring someone, it’s because you can’t do the job yourself, so you better show them how you would do it.

Tory Burch, Co-founder and Creative Director, Tory Burch

When I worked [at Ralph Lauren], first in public relations and then in advertising as a copywriter, I learned the importance of having a complete vision for the company, from product to marketing to store visuals. My company is an extension of me, so when I designed my stores I wanted people to feel that they were in my home.

 Scott Boras, Sports Agent, President, Boras Corp.

…I had hired my formar law professor…He said that if you are really effective at what you do, 95% of the things said about you will be negative. Keep your head on straight, don’t get emotional, take the heat, and just make sure your clients are smiling.

Colin Powell, Former Secretary of State, Retired Four-Star General

There was a brand-new second lieutenant who was very ambitious and wanted to be a general. One night at the officer’s club the young officer spotted this old general sitting at the bar, and he went up and said, “How do I become a general?” And the general answered, “Son, you’ve got to work like a dog. You’ve got to have moral and physical courage. There may be days you’re tired, but you must never show fatigue. You’ll be afraid, but you can never show fear. You must always be the leader.” The young officer was so excited by this advice. “Thank you, sir,” he said. “So is this how I become a general?” “No,” said the general, “that’s how you become a first lieutenant, and then you keep doing it over and over.” Throughout my career, I’ve always tried to do my best today, think about tomorrow, and maybe dream a bit about the future. But doing your best in the present has to be the rule. You won’t become a general unless you become a good first lieutenant.

One area I have struggled with in my work life is the role of discretion. In some work environments, we are expected to follow instructions repeatedly. Individual discretion and variation is frowned upon. In other work environments, repetition is precisely what is frowned upon.

In manufacturing environments, as Deming elucidated, discretion and variation should be eliminated. The more repeatable a process is, the more likely it is to scale. Individual discretion results in variation. As the process scales, variation admits error, meaning the quality of the product goes down as more are produced. A survey of business history will yield multiple examples of professionals who were richly rewarded for sustaining businesses without variation.

In research environments, repetition is considered, for good reason, utterly wasteful. Professionals are expected to discover new things always. Indeed, it is considered an advancement of science to prove that what appears new is actually something old in disguise. Careers are made or destroyed when efforts thought novel are proven derivative.

In software development, the slightest suspicion that a repeated activity might be wasteful is immediately rewarded. The activity is automated and the waste eliminated. Strict adherence to process was considered a counterproductive restriction of personal freedom.

Yet, even large-scale manufacturing systems cannot last forever. Historically, R&D departments were organized to create innovations that were then implemented in manufacturing organizations. The implicit rationale was that manufacturing required a mindset focused on strict repetition, while research required a mindset focused on purposeful variation, and those two mindsets could not exist in a single individual.  Yet this model failed so many times that its failure acquired a name: The Ivory Tower. In some cases, the  research department lost touch with the real needs of manufacturing. In other cases, manufacturing stubbornly insisted that what worked in the past would continue to work in the future.

Recently, a new model has been adopted which accepts the possibility that both mindsets can exist in the same individual. Quality Circles bring together teams from across manufacturing departments to formulate process changes—purposeful variations, innovations, and improvements. But these are separate from the execution of the processes themselves, which are expected to be invariant.

Agile software development teams are beginning to adopt this model. During the iteration, adherence to plan and process is strict, but between iterations, variations and innovations are adopted or considered. Strict adherence to process actually frees the software developer from being distracted by unimportant aspects of the work, and allows him or her to formulate innovations with greater business impact for implementation on a larger scale.