The Need for Incentive Structure

There are times when the success of the individuals do not add up to the success of the group.

The marcom (Marketing Communication) group is in charge of the company website. The director reports to the VP of Marketing who has the grandeur vision. Creative talents then proudly present the new design of memorizing beauty. Rave reviews follow and the VP of Marketing basks in glory. But the portal to the product support was broken. No customer could search for the knowledge database or file the support case online. They call the 800 numbers and the increased volume brought down the PBX. Company reputation tanks.

As the company readies to introduce a new product, it finds the internationalization costs high. A financial study shows that certain countries historically do not sell this family of products well. An optimization effort naturally leads to the elimination of the translation costs to sell in those countries. But the VP of Sales in that region had a revenue quota that depends the sales. The company misses its sales target. Stock price falls.

There are just too many examples like the above. Solution #1 is leadership. When the natural prioritization of organizations do not align, someone must make the decision that optimizes for the whole. This decision will reward one group and hurt the other.

We can also carefully construct the incentives, or remove the disincentives. Too frequently, the big boss demands patriotism, that the individuals should sacrifice for the greater good. This is simply unrealistic. There are patriotic employees, but the majority of them place their own best interest ahead of the company.

When designing incentives, it is critical to remember the consequence of not having them is usually far worse.

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Two Ways to Build Your Empire

Bob and Alice are both smart, personable, ambitious, and determined to climb the ladder fast. For starter managers, they followed the conventional wisdom that nudge them to enlarge their fifedom. It is quite sensible: more resources lead to more opportunities to practice managing: empire building is good for a manager’s career.

I opined before that the size of the organization needs to be big enough. I wrote for the director-level managers, what about first liners? For them, getting more direct reports is a no-brainer: the more, the better. But how?

Bob consolidated some processes and acquired a charter that is pivotal to critical business functions. As other departments piled up requests and lengthened his work queue, he fell behind because he was short-staffed. Since his charter was a monopoly, he received more funding and the strategy worked.

Alice focused on her basic skills: planning, executing, and communicating. She became a proficient and capable manager. Her skills attracted attention and senior managers started to assign her more jobs. Because she was capable, she got more resources. Her strategy also worked.

One of them actually did not work at all. Explain why.

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Playing 2048

May 31st, 2014

If you have not heard of it, 2048 is a game, free and open sourced, that is highly addictive. I have spent untold number of hours on it. Last night, I achieved the goal of creating the 4096 tile. Now, I can die in peace.

To play the game, you move every tiles on a 4-by-4 matrix in one of the four directions: up, down, right, or left. As you do so, if there are two adjacent tiles with the same number on them, they will merge into a single tile of the combined value. For example, a “2″ tile and another “2″ will become a single “4″ tile. The tile values gradually increase in binary ladder and the game is won when you have made a “2048″ tile.

But winning is not the end of the game. You may continue and try to make the elusive 4096 tile, or even a higher value one (that I have not heard anyone achieving). Now that I have made 4096, I reflect the reasons the game was so addictive.

  • It is easy to learn. In fact, there is nothing to it.
  • It appears to be easy to win, almost like tic-ta-toe, but then you realize it is harder than it appears.
  • To make 1024 is relatively easy and that gives the illusion of 2048 is not that hard. Simply put, it gives you achievable successes along the way, luring you with many small rewards.
  • Then, once you have won it. It let you keep going. You know think you can step up to an even higher achievement

Do you play this game? Have you done 4096? Have you done better than that? Leave me a comment.

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The Beginning of Corruption

You have a decision to make and you did. Vendor A has practically won in all aspects. The next step is to award the contract. You decided to pay them a visit and shake hands. They went all out and entertained you thoroughly. At the end of the day, you told them, everyone toasted and was happy. You came home. There was nothing inappropriate. Those entertainments did not influence your decision.

There was a power asymmetry and both sides knew it. You exploited that asymmetry. That was the beginning of corruption, not just for you, but for your whole organization.

Many senior managers enjoy the authority that came from their position. In fact, I observed that the majority of them are really motivated by power: the ability to control others. Quickly, they learned the special treatments that come from having power. Then, they demanded those special treatments: not wait in the line, a personalized service, extra portion, etc. When not getting them, they wielded their power.

The decisions influenced by these factors are usually sub-optimal. Soon, these plays filtered out the best decisions or the best people. What’s left are those who are willing to play the game that is not meritocratic, at least not 100%. At the end, the whole company lost its edge and competitiveness.

Be aware of the asymmetric power structure. Use it for the company, but not for yourself. It is hard to resist, so you will need to be extra vigilant.

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Divergent Trilogy

Teenagers are hormonal, cruel, and irrational. They tend to make bad decision in a rush. Got that. Pains come with bodily injuries. We got that too. It is not cool when your friends were killed. OK.

In this future world, all 16-year old must take an aptitude test and choose a faction to live off his or her life. Each of the four factions adhere, nearly religiously, to a set of values: truthfulness, courage, benevolence, selflessness, etc. But Beatrice’s aptitude test came out ambiguous. She couldn’t choose. She is a Divergent.

That’s the first 10 pages of the first book and I finished it in a hurry. Then I got the second book and devour it too. Took no break, I dived into the third and burned several near all-nighters. One word of caution, be prepared to read all three books, in the right sequence. They are really just one book, a long one. Too long, really.

The plot is relatively clever by mixing several obvious themes: races, prejudice, family, friendship, and teenage love. At the end, I categorize it to be a social SciFi with too many subplots. In this age of self-publishing, authors use the first volume to hook the readers for subsequent ones. Maybe this is the trend of mass market publishing.

I still recommend the books. But I have not and do not plan to watch the movies.

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Learning the Ropes

Summer nears, thoughts shift to sailing. I found myself staring at the lake and tracing those triangular shapes. That afternoon, I took out a piece of rope and started practicing the knots.

When I learned sailing, I thought the common phrase “learning the ropes” meant the names of those ropes on a boat (they are called sheets or lines). To operate a sail boat, one must pull ropes decisively. A delay, hesitation or, worse, mistake will possibly capsize the boat, miss the turn, or, minimally, lose the speed. The captain’s job, essentially, is to time and coordinate all those rope pulling activities. They give commands that are precise, terse, and understood to all those well versed in sailing. I am still “learning the ropes.”

Sailors must pull the right rope at the right time. There is no time to untangle first. They must, therefore, be able to tie and untie ropes all the time. And they must trust these knots. Once tied, they must be secure, wet or dry. They also must be able to untie all knots quickly, also wet and dry. One of those knots is the Bowline. As I practiced it on a piece furniture, I found it beautiful — and not just this knot, all the knots used in sailing.

And I admire the beauty, in its design, simplicity, and effectiveness, of this Bowline. I realized that this is another aspect of learning the ropes: the knots. I thought of centuries of sailing and all those wisdom passed from generation to generation. And I smiled, “this is pretty cool.”

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Differentiator: the Holy Grail

Every entrepreneurs and enterprise executives wants the differentiator: that one thing that sets us apart from the pack; one pain point that has been under-served; one unfair advantage not duplicatable by the imitators. We read books, we attend seminars, we study cases, we go on pilgrimages, we hire expensive consultants. We need that differentiator.

It’s right here.

A friend of mine is a yoga master. She tours around the world to demonstrate, perform, and teach yoga. But her journey began humbly. About 10 years ago, she was very sick. She went to a beginner yoga class to build some strength back. She attended the class regularly and gradually advanced to intermediate, advanced levels, and eventually private lessons with her master. Then the studio offered her to be a part-time instructor. When her classes got full, she she opened her own yoga studio.

In short few years, she gained a differentiator from the general population. Several years later, she differentiated even among the yoga professional. She is now competitive and profitable. There is nothing uncommon about her journey. Tenacity!

The demise of the business frequently rooted from the lost of will to build that differentiator. Too many entrepreneurs or investors sought the first-mover advantage or a green field with no competition. They are to create a new industry, open a new era, and redefine a paradigm. History showed that Google was not the first search engine, Microsoft did not create the first office suite, Apple was not the first MP3 player or smartphone, Intel was not the first CPU maker.

If something cannot possibly succeed because someone is already very good at it, then there will never be new novels, music, or movies.

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Getty Villa

What is it like to be so rich that money no longer matter? That’s J. Paul Getty, an oil person that was the richest person in the world in 1957.

Getty Villa is part of the Getty Museum whose other site is Getty Center. The admission is free but tickets are required. This villa nestled at probably the best corner of southern California. For $15 of parking, it is a pleasant excuse to visit the Malibu beach and soak in some fine culture. Of course, the wonderful combination of sun, beach, and sea breezes is an additional attraction.

Getty Villa is all about ancient Greek and Roman arts and antiquities. The center piece is the Lansdowne Heracles, the Greek version of Hercules. Paul Getty spent hundreds of millions collecting these arts but died before the center opened. There was an extensive renovation and it was re-opened in 2006. A casual walk-through takes about 90 minutes.

Unlike Getty Center that should be a destination, Getty Villa is more a worth-while detour. The garden and the architecture are no less parts of the collection and make sure to linger to appreciate many finer points of them.

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The Demise of Pluto

The planet, not the cartoon dog.

Kid actually took Mike Brown’s class and learned about the drama first-handedly. Years after she told me the story, I bumped into this book. Could it be nerdy and boring?

I smiled, laughed, and chuckled. My eyes misted several times. I couldn’t put it down and finish the book in 4 days. For an academic geek, Mike Brown is a talented writer and probably a good teacher and, by definition, an entertainer.

The Solar system has eight planets, an asteroid belt, and a Kuiper belt very far away. That Kuiper belt has many objects of various sizes and shapes. The largest one, discovered long time ago, is Pluto. Mike Brown discovered several more, including Eris, once considered another planet. But is it? Or even, are they? No. They are not planets, just larger members of the Kuiper belt.

I was once fascinated by the starry sky. I bought paper-based star charts and stared at the sky for hours. I have never graduated to telescopes, mostly for financial reasons and also for not having lived without severe light pollutions. What would happen to me if I grew up in a rural area? Would I grew up oblivious to those light dots, or an astronomer?

I would have never known. Is it fate that Mike Brown, and many other astronomers, was born the right place and right time? Otherwise, the celestial objects wouldn’t have shown up, or the technologies wouldn’t have matured enough. Mike Brown is probably more brilliant as a software engineer than an astronomer.

The best parts of the book were about Lilah, his new born daughter who were taught sign language. When they were watching the moon at night, a cloud briefly obscured the moon, Lilah asked her dad to bring it back. When the moon came back out, she thanked her dad for it with a smile, all in signs. I was smiling so wide reading that. Hey, I am a dad with daughters too.

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Best Sushi in Tokyo

“It’s the best Sushi in Tokyo,” our host boasted. “That’s a bold claim.” We both thought that’s really more of a personal opinion of our host than an unbiased journalistic assessment. Our expectation, nevertheless, heightened as we took in the Ginza streets.

Celebrities and luminaries frequented Kyubey (九兵衛), a Sushi bar elevated to international fame by Wall Street Journal years back. Patrons sit at the sushi counters shared by slightly more than a dozen and face the sushi chef no more than 2 feet away, smiling with two long and sharp knives. Soon, seafood, mostly raw, transformed into visually appealing and appetizing forms appear on the plate in front of you. The chef would suggest “to dip or not to dip” into the sauce soy saucer and I found it rewarding to oblige.

Sake bottles kept on disappearing. Bite-size pieces came endlessly. Never have I imagined the varieties of fish and their complex texture and flavor combinations. I soon ran out of adjectives and praises for the chef, “It’s very good;” “Oh, this is very good;” “Delicious;” “Oishii desu;” and my lame joke, “Delicious desu.”

Finally, misu soup came and we let out a happy sigh. As we walked out, wait, really, no kidding, geez, should I grab my camera? Yes, it was Lionel Richie himself with a very gorgeous companion. Quick! Which Lionel Richie song came to your mind? “All Night Long” was mine.

I cannot tell if this is the best sushi in Tokyo. I would definitely testify it to be the best I remember in recent life. The damage? Our host said US$750 for three of us. Worth every penny, particularly when he paid.

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