Tag: Business

Gentle Commerce

Gentle Commerce

Posted on by jabittan
On a recent episode of the show Solvable from Pushkin, a guest interviewed about reality TV said that contestants on reality TV shows are rarely as good or as bad as they appear in the series. The shows present narratives which causes us to think about contestants in an extreme way. We seem to fall into this type of thinking very easily, and I think it shapes the way we think about real world actors outside of reality TV settings. I think the same piece of advice can be applied to big businesses, government, and sports. In particular, and the focus of this post, I think we view big business as being much worse than it truly is.
 
 
This is a view that Tyler Cowen puts forward in his book Big Business: A Love Letter to an American Anti-Hero. It is also an idea that Steven Pinker shares in The Better Angels of Our Nature. In his book Pinker writes, “though many intellectuals … hold businesspeople in contempt for their selfishness and greed, in fact a free market puts a premium on empathy.”  One benefit of global free markets its that customers can chose where they shop. They can spend their money on things that are important to them and they can buy things where they feel respected and supported. We are often critical of big businesses for being uncaring and for having too much power, but big businesses have to listen to political and social trends. They have to try to be responsive to people to provide them with products, services, and narratives that they want.
 
 
Pinker continues, “a good businessperson has to keep the customers satisfied or a competitor will woo them away, and the more customers he attracts, the richer he will be.” This is an idea known as doux commerce (gentle commerce), which suggests that free markets and big businesses reduce violence by participating in positive sum games. “If you’re trading favors or surpluses with someone, your trading partner suddenly becomes more valuable to you alive than dead,” writes Pinker.
 
 
Businesses encourage us to think about what our customers need, want, and expect. While businesses may be cold, may be greedy, and may have all sorts of problems, they do reduce violence. Many people dislike that big businesses are trying to conform to social pressures today,  but the reality is that businesses are always trying to react to the social changes and pressures of the time. Successful businesses empathize with people to win them over. They are not trying to wipe out or alienate any segment of the population, but trying to predict where the market is going and sell to that future market. For all the problems of markets and big businesses, reducing violence is one bright spot. Perhaps big businesses, as Cowen would argue, are not as evil or as bad as we might think they are.
Belief in Efficiency & Competitiveness

Belief in Efficiency & Competitiveness

Posted on by jabittan
In the United States we celebrate private enterprise. At the same time, we often downplay public institutions and ignore their contributions to the world we inhabit. We focus almost exclusively on the developments of private corporations and the developments and innovations of businesses. We are critical and wary of anything that can be presented as inefficient or likely to make private companies less competitive. However, this mindset sometimes means that we become too focused on short-term performance and fail to see larger systems and structures that unite private enterprise with the rest of society.
In his book The Homeless Christopher Jencks writes, “almost everyone … believes that efficiency (often called “competitiveness”) must come first, and that social stability will somehow follow.” The general mindset in the United States is that we need to have a fast paced, innovative, and efficient private sector for our country to flourish. Without first ensuring that the state is set for businesses and private enterprises to operate at maximal efficiency, our democracy and our country cannot successfully exist. America, this argument holds, is entirely dependent on business profits, and anything that gets in the way of competitive and efficient business is a threat to the country.
I am not an economist, and I don’t understand labor markets very well. However, I think that Jencks is correct when he states that we accept a level of sacrifice of the lowest socioeconomic status individuals in the United States in exchange for a meritocracy that generally works pretty well for most of us. I generally think we are hyper-focused on ideas of deservingness and on our own self-interest. We conflate our own self-interest with the self-interest of society at large, arguing that our economic purchases and chasing our own individual materialistic goals is what is going to keep our economy running, innovating, and leading the world.
The argument that Jencks is making in the quote above is that pure business efficiency and competitiveness is not enough for a stable society. Sacrificing those who don’t have the skills to make it in an efficient business world creates instability and fractures within our society – instabilities and fractures that an efficient business mindset cannot address. For Jencks, and for me, human connections and social cohesion are at least as important as efficiency and competition in business. The focus on short-term returns, a frequent critique of American corporations today, certainly cannot help social cohesion or improved long-term human connections and senses of community.
I think that writers like Tyler Cowen are correct in arguing that economic growth (which delivers improved quality of life) are important, but I’m not sure businesses are always focused on improving life satisfaction. Businesses are often focused on short term rent capture, which harms society. I think there are ways to drive innovations without creating an underclass that is crushed along the way and we need to find those ways. I think we need to remember how important the role of government can be in developing technologies and encouraging innovation. The development of the internet is a great example of the important, but easily overlooked role that the government can play in technological development, and Katz and Nowak show in The New Localism, how local governments and quasi-public/private institutions and partnerships can be a new model for driving economic growth and development. The key is recognizing that pursuing business efficiency at the cost of the lives of those on the lowest rung of society is not supportable and won’t lead to good social outcomes in the long run.
Status Quo in Healthcare

Status Quo in Healthcare

Posted on by jabittan
How can we really make change to the United States healthcare system? Dave Chase, in his book The Opioid Crisis Wake-Up Call argues that changes to the system need to come from private businesses, because private businesses are responsible for the health insurance coverage for over 50% of American’s. If business don’t take action and demand changes, Chase argues, then the system will not have enough strength to push against the status quo of rising costs and stagnant productivity within healthcare.

 

A quote from Chase about changing the American healthcare system reveals something larger about public opinion and the status quo in American public policy in general. Chase writes, “This book focuses on non-legislative strategies since the politics of health care are fraught with pitfalls. As we know, the best way to perpetuate the status quo is to politicize a topic – and nothing is easier to politicize than health care.”

 

I think Chase is correct about politicization and the status quo in the United States. Our country has deeply internalized ideas of liberal and conservative and wedded those ideas to the Democratic and Republican parties. This means that if an idea is taken up by a party, if it is politicized and adopted by a party, then it instantly becomes an identity marker, and people who might not have had a strong reason to care about an issue, suddenly find it to be a maker of who they are and what groups they belong to. Politicizing an issue in this system virtually guarantees gridlock, preventing any legislative action on the issue.

 

Private businesses, however, can make changes without relying on a 50% majority vote (or 2/3rds majority vote in congress). Throughout the book Chase presents economic and moral arguments for businesses to take the nation’s opioid crisis seriously, and uses it as a wake-up call to show businesses how our healthcare system is failing individuals, and ultimately failing the companies that hire those individuals and provide for much of the healthcare that individuals receive (or fail to receive). Public action is hard, so in many arenas, private action is the best chance for making the changes we want to see in the world.
Scale versus replication

Replication Versus Scale

Posted on by jabittan
I used to work for a healthcare tech company based out of San Francisco, and the word scale was almost a mantra. Whenever we did anything, from a small policy to the introduction of a new product or service, the question was always, will this scale? It is an important and crucial question for a growing organization. Before anything was introduced, we always considered the future, whether the new process would work if we had more customers, more covered lives, more emails, and more work. If the amount of effort, oversight, and individual contribution was too high, then we new we were not looking at something that would scale. We needed processes where the amount of additional work would be negligible as we grew, that was the key to scale.

 

For many organizations, however, scale isn’t necessarily the most important goal. Instead, the focus is on replication, to grow and expand in new spaces, new markets, and new products. Replication is something different than scale. While scale sought to reproduce the same outcome, the same process, and the same expectations in all settings, replication takes a slightly different approach to the same end goal. We still want the same successful outcome, but the goal doesn’t include having mirrored consistency in approach with diminishing marginal effort for each new customer. Replication is adaptable to changing local conditions.

 

Dave Chase describes it like this in his book The Opioid Crisis Wake-Up Call, “Replication varies from application to application; scalability seeks to apply the same things everywhere. This distinction is a subtle but absolutely critical success factor.”

 

In retail, social media, and chain restaurants, scale is crucial. You want every coffee you order at Starbucks to be the same, regardless of whether you are at the first Starbucks in Pike Place, or a brand new Starbucks in a Las Vegas suburb. You want your eggplant Parmesan at Olive Garden to be the same today and next month, and social media companies want everyone to have the same account set-up and access settings so that it is easier to manage all the companies, individuals, and organizations that create accounts. Scale makes things consistent, reduces administrative burden, and keeps costs down.

 

Replication is more adaptable from region to region, setting to setting, and industry to industry. The goal might be very similar, say to reduce healthcare costs, but the organizations and spaces might vary dramatically, say from nursing homes to companies offering remote medical second opinions. What Chase argues is that many healthcare organizations shouldn’t get too caught up on scale, and should focus more on replication. Hospitals can learn from nursing homes and replicate the approaches they take to improve patient adherence to medication regimens, knowing that there is some overlap and some divergence in their patient populations. Health plans can replicate patient education models that hospitals find successful, even though the patient education from the health plan will take place in a different form and space.

 

Scale dictates what should be done to create exact copies of a process with diminishing marginal costs, but replication is necessary when dealing with multiple confounding variables in dynamic and ever changing spaces. Scale might be needed for economic success at national and multinational levels, but replication provides the flexibility and creativity needed for success when a cookie-cutter model can’t be followed.
Businesses and Healthcare Solutions

Businesses and Solving Healthcare Problems

Posted on by jabittan
We often overlook businesses when we think about the problems in American healthcare and how we can fix the issues that plague our system. But about half of all American’s receive their health insurance as a benefit provided by their employer. Businesses purchase and provide health insurance for millions of Americans, and must think about employers and the plans they offer when we think about the problems in the American healthcare system.

 

Everyone will tell you that healthcare is complicated. We know that insurance is hard, getting to a doctor can be hard, understanding what you have to pay is hard, and trying to guess what kind of plan you need for the next year is hard. All of this makes the solutions to our healthcare problems hard, but for a majority of Americans, the person who is shaping the structure in which they will make these decisions and figure out what is available to them is someone at their job. And for a lot of those Americans, the person at their job is probably in HR, and their main goal is not to find a great healthcare solution for the employees, but to just not get yelled at by the CEO for raising health insurance coverage costs and to avoid being yelled at by unhappy employees. Nevertheless, businesses can step up and play a role in making changes for the positive in the American healthcare system.

 

Dave Chase in his book The Opioid Crisis Wake-UP Call writes, “The opioid crisis is a complicated issue over 30 years in the making. But companies have played a major role in creating and sustaining the crisis. And a vanguard of employers are realizing that they have a major role to play in solving it, and that the solutions fall well beyond what the government alone can do.”

 

Companies, since they control the healthcare of half of Americans, can start making real changes to the care available to people. Employers who set up their own plans can make primary care access, physical therapy, and nutrition services virtually free to their employees. By providing a greater selection of preventative services, they can improve employee well-being and reduce the likelihood that an employee will deal with chronic pain and develop an opioid addiction. This is an over-simplified example of what companies can do, but it is important that we realize that the employer is a major player in the fight to improve the American healthcare system, and if we don’t step up to demand better from our employers, we won’t see the changes we want.
Disruptive Innovation

The Basics of Disruptive Innovation

Posted on by jabittan
In his book Deep Work Cal Newport shares a story about Clay Christensen, the Harvard Business School professor who coined the term disruptive innovation. Its an idea I like quite a bit, especially since it is a big concept in healthcare right now, and I focused quite a bit on health policy and dabbled slightly in healthcare economics during my graduate studies.

 

Newport describes the basics of disruption like this, “entrenched companies are often unexpectedly dethroned by start-ups that begin with cheap offerings at the low end of the market, but then, over time, improve their cheap products just enough to begin to steal high-end market share.”

 

In this model, Uber wouldn’t be a disruptive innovation. Uber didn’t do anything to dramatically change the world of taxis. They sidestepped a lot of entrenched thinking and decided that laws and regulations didn’t apply to them while introducing badly needed technology to the world of taxis, but they didn’t offer a new cheap version of the service to gradually build upon and improve.

 

An example of disruptive innovations that I like, that I learned about in a healthcare economics class, is Bose headphones. Bose is producing headphones that have impressive noise cancelling, noise isolating, and noise amplifying technologies. They are certainly not cheap consumer products, but compared to highly technical, very expensive, and highly individualized hearing aids, they are. They don’t do everything that a hearing aid does now, and they don’t provide quite as good of a hearing experience for someone who relies on hearing aids, but they do seem to be able to compete at the lower end of the market. For people who are currently priced out of hearing aids and people who don’t have complete hearing loss but maybe should start considering hearing aids, Bose headphones seem like they can help. They can cancel competing sounds and provide just enough amplification and isolation to improve some people’s hearing…even if hearing aids would be a better long term solution.

 

The concept is important for several reasons. If you are a business executive, you need to know what is happening in your market space, and you need to know when someone is coming along to provide a cheaper service that might one day compete with you directly, or steal your market share. Also, from a regulatory standpoint, understanding disruptive innovations and where they may be occurring is important. If people are ditching their pricey hearing aids for less effective Bose headphones, are they putting themselves at risk while driving or navigating busy environments? What happens if a disruptive innovation guts an industry, and leaves people with disabilities who relied on the high priced product’s level of support and customization without a suitable product or service?

 

We should keep disruptive innovations in mind because they can unlock new potentials (we do a lot with our phones in ways that are quicker but not always as user friendly as old standard alternatives) but can also be dangerous for individuals and markets (should we really allow anyone to use a phone to scan their eyes to get a new glasses prescription?). Thinking about disruptive innovations helps us think about current social and economic trends, and it also forces us to be more considerate of others. We have to balance and weigh the interests of business, the interests of new consumers, and the interests of vulnerable populations when we think about where a disruptive innovation could push a market.

Marginal Charity – An Opportunity for Big Business

Posted on by jabittan
Big businesses strive for efficiency. If something can be reduced, eliminated, streamlined, and automated then at some point it will be. Each tiny advantage can be huge at scale, and can mean the difference between growing and laying off employees. Flaunting success, hiding failure, and maximizing at the margins are standard business operating procedures, but they create a void that could be filled for companies to do meaningful things that can be viewed in a charitable light. In The Elephant in the Brain, Robin Hanson and Kevin Simler talk about “marginal charity” an idea that you can do something that economically doesn’t add much cost to your own life, only marginally diminishes your efficiency, but provides a big element of charity to the business you are already doing.

 

In the book, the authors consider a high rise apartment building. Say 10 floors is the height to shoot for in order to achieve maximum efficiency. There may be situations where adding one more floor would not increase the cost by a significant amount, but would reduce the efficiency that the building owners and property developers expect from the complex, especially if the final floor was developed to allow for more low-income/affordable housing. Adding this extra story doesn’t make sense in a pure efficiency model, but if you are trying to add a touch of charity to the business you are already engaged in as the developer, you can do a lot of good by providing many additional affordable housing units with little marginal cost to yourself.

 

Hanson and Simler write, “In terms of providing value to others, marginal charity is extremely efficient. It does a substantial amount of good for others at very little cost to oneself. (In other words, it has an incredible ROD [Return on Donation]).” Finding a way to add a little extra while taking away from your own individual efficiency may make the entire system a bit more equitable, and a bit more efficient as a whole. Small tweaks to how to do things and create the systems that shape our lives can help provide for greater long-term benefit even if they slightly limit what is possible for us now.

 

Since we are not all property developers, we won’t all have this type of chance to make a big difference through small actions in a business context. But we can think about marginal charity in our own lives and try to set up systems and structures that help us default toward charitable behavior. I don’t think this looks like donating a dollar to the thing the grocery store check-out system asks you to donate to (I’d recommend saving that money and making a single larger donation to a charity featured on GiveWell), but it may look like picking up bottles or trash along the street you already walk down every day. It may look like increasing your recurring donation by an additional $5. It may look like making personal choices that add a little extra cost, but reduce energy use, plastic use, or single use item consumption. We can think about charity on a marginal level, encourage others to do so, and that will help build a spirit of looking for those marginal charity wins. They may not change the world, but they might help set up a culture and system that will.

Overly Reliant on Outside Influences

Posted on by jabittan
One of the draws that I have toward stoicism is the idea that both good things and bad things will happen around me, but that I can always decide whether something is good or bad and how I will move forward from the good things and bad things that happen around me. My reactions are something I can control even if I can’t control the weather, the person who cut me off on the freeway, or the economic downturn that sinks my business. In stoicism, I have found a set of tools for objectively viewing the world and developing an inner ability of focus and calmness.

One of the authors who taught me a lot about stoicism is Colin Wright and his book Becoming Who We Need To Be is a somewhat stoic look at the forces in our lives that shape the people we are becoming and how we can respond to those forces to become people who are well equipped to do the important things to help society become a better place. In one chapter of his book, Wright highlights an idea that many companies, industries, and professionals in American society now operate on a business model based on making us feel small. The business model positions the company, coach, or set of coaches as the only thing that can take us from where we are to where we want to go. Wright references certain types of gyms, certain health restaurants, and in some cases our coaches, mentors, or guides from the self-help world. In his book he writes, “I’m not saying there’s anything wrong with self-improvement. … But I am saying that when we become overly reliant on outside influences, encouragement, and incentives in how we feel about ourselves, we open ourselves up to abuse and mistreatment. We open ourselves up to being manipulated.”

Business models that rely on customers becoming reliant on them put us in a position where we cannot walk away. Their goal may seem like it is to provide great kick-boxing workouts or to help motivate people to get in shape and make good decisions, but what is really happening is the development of a cycle of dependency and the development of personal identities that don’t operate without the business at the center providing the affirmation that one is living properly, doing the right things to be healthy, and taking the right steps for a validated life. Stoic philosophy turns this business model on its head by suggesting that we already have all the means within the faculties of our minds to be fulfilled. We don’t need to tie our self-value and self-worth to the praise of another person. It is not up to money, social status, or the number of mornings at the gym which determine whether we are living the right life. We have value by virtue of being a human being and we can use tools around us to improve our health, try to reach out goals, or build a community of like-minded individuals, but we don’t have to tie our entire identity and value as a human to these industries in order to define ourselves and become valuable and meaningful.

Coaching Tactically and Coaching Strategically

Posted on by jabittan
I work for a tech start-up in the heath care space and within our company (at least in our office which is lead by a couple of former Microsoft ninjas) two key buzz words are tactical and strategic. I was not sure exactly what these words meant and how they were used in business until I had a very specific meeting with our site director who was at one point my manager for roughly 6 months. I was in a one-on-one meeting explaining some challenges that I was facing in my role. Every day I was reacting to problems that bubbled up and needed my immediate attention, and I was not quite doing anything that would get ahead of those individual problems and solve the long term issues that created these acute problems. My boss at that point described the difference of thinking tactically versus strategically.

 

The daily grind and the individual problems that scream for our attention create the tactical work. The long term planning and insightful problem solving that stops those problems is the strategic work. The tactical is important and takes a certain set of skills, but the strategic is the differentiator — what separates the average companies from the excellent companies, what makes the top employees stand out from those who show up each day and punch a clock. What I was learning in that one-on-one was the difference between the two types of thinking. Now, when I look back at that coaching session, I also  see two different coaching styles at work.

 

In his book The Coaching Habit author Michael Bungay Stanier makes a distinction between two types of coaching: coaching for performance and coaching for development. He describes the two styles and approaches in the following way, “Coaching for performance is about addressing and fixing a specific problem or challenge. It’s putting out the fire, or building up the fire, or banking the fire. It’s everyday stuff, and it’s important and necessary.” In this quick quote he is describing tactical coaching. How can you help an employee, colleague, or friend navigate the individual challenges that are popping up in front of them and how can they get through those obstacles? Bungay Stanier continues, “Coaching for development is about turning the focus from the issue to the person dealing with the issue, the person who’s managing the fire. This conversation is more rare and significantly more powerful.”

 

The second quote is about coaching strategically, helping the individual see not just how to overcome one challenge, but how to adapt and change what they are doing, the process they work with, and how they are approaching obstacles to make them better in the long run. It is a focus on the individual and their growth as opposed to a focus on a problem and how to address that problem. Thinking strategically requires awareness and understanding of common threads between problems and issues, and that is what you are trying to build in the other person. You are working with them to find the areas of growth for them that will connect the dots in their own life and story, and you are working with them to shift their perspective to solve long term problems and not immediate issues. This is what my boss was doing with me when he explained the difference between thinking tactically in my daily work and angling myself and my operations to be more strategic.

Create Great Work

Posted on by jabittan
A real challenge across the globe in the coming decades will be helping people find ways to do meaningful work. A lot of our work today really is not that meaningful, and as more jobs can be automated, we will find ourselves with more people looking for meaningful work. Helping people find meaningful work will preserve social order and cohesion and will be crucial for democracies, companies, families, and societies as a whole as we move forward.

 

Michael Bungay Stanier looks at the importance of meaningful work in his book The Coaching Habit suggesting that coaching people is easier and better when you are helping someone with meaningful work. When you give people tasks and ask them to do meaningless jobs, you will never get the most out of them and you will never inspire them to go above and beyond. He writes, “The more we do work that has no real purpose, the less engaged and motivated we are. The less engaged we are, the less likely we are to find and create great work.”

 

The company I work for makes a real difference in the medical world. Our work leads to better health outcomes for patients and families and it is easy to see how our work has real purpose. But even within the work that I do, there can be tasks and responsibilities that seem unnecessary or burdensome. These little things can build up, and even within a good job they can begin to feel tedious and disengaging. To combat this, my company encourages efficiency and automation within the important things that we do. We are encouraged to think about ways to improve systems and processes and to find new ways to do things better. It is the autonomy and trust from our leadership that helps us stay engaged by allowing us to continually craft our jobs to an optimal level.

 

Not everyone is in the same situation that I am in. Many companies hold people to specific processes and inefficiencies, perhaps just to see how conformist and loyal individuals are to the firm. This holds back growth an innovation and demotivates and disengages employees. As this happens to more people and as meaningless tasks are displaced to robots, we will have to find new ways to motivate and engage employees, because our employees are our fellow citizens, and because motivation and engagement can be thought of as a public good. We all rely on an engaged citizenry for our democracy, and work helps us feel valued and engaged. How we face this challenge as individual coaches and as companies will make a big difference in how engaged our society is in the future. One approach is to help ensure everyone on your team and everyone you coach understands how their work contributes to the overall mission and goals of the firm. This does not simply mean that you hand everyone a nice slogan about why their position and duties are important, you must actually show how the company plans to move forward and how the department and the individual will contribute to the new direction. A recent challenge for myself that I have been thinking about is how you direct resources and attention to groups to also signal their importance. Without the leadership demonstrating how specific work contributes to overall goals and without time and attention appropriately directed to an individual or department, even important work can begin to feel meaningless or forgotten, and firms and societies will never benefit from the innovation and dedication of great work.