economics

The Economist has a review of Michael Porter’s latest contribution. I skimmed it long enough to satisfyingly affirm my revulsion to ‘business’ as an intellectual discipline.*

A couple of years ago, I was considering opening a retail store and emailed a former marketing prof for a textbook recommendation.

He came through and, for the first time in my life, I genuinely read a damn textbook.

My god, what a load of crap.

Because I was looking for insight on, you know, how to actually manage a retail business, the book was useless. I read the thing in an hour – it was about 40% explicit filler (summaries, Q&A, indexes, case studies and graphics), 50% stealth filler (fluff  ‘filling ideas out’) and 10% real content.

Not much to actually learn but lots of useless junk you can memorize and immediately forget.

This is the classic High School BS Method. First you need  some idea, as fine-spun a thread as it may be. Then grimly stuff  it with the largest, foulest payload of BS you have time to get down. Gotta fill the page!

And it’s not just marketing – marvel at the bounty the ‘science’ of finance has reaped for the world!

For me, business education (hell, maybe ALL education) works like this: find a problem and try to solve it.

Your solution will probably fail, but try again. Maximize your chance at success  by asking people who have some relevant experience for advice.

Best case: work in teams and punish freeloading.

‘Ideas’ and ‘intelligence” are red herrings. Social intelligence matters (can you play with others?). Drive matters. Experience matters, but that’s only a function of social intelligence, drive and time.

I know that execution is boring, seems easy and doesn’t get people excited, but that’s actually the whole game.

Perhaps ironically, the version of this argument for the softest part of execution, people management, draws on Google’s experience:

Mr. Bock’s group found that technical expertise — the ability, say, to write computer code in your sleep — ranked dead last among Google’s big eight. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

Social intelligence and work ethic. The end.

*Drucker is excused from all this, of course.

I think it’s worth following up on this.

Over time, a poor grasp of macro trends will doom any business strategy, of course. But in the short term, success is more closely linked to incumbent competitive advantages.

What really intrigues me is that part of the economy so resistant to automation: social interaction.

It’s probably not an unfair simplification to say that economic growth is all about uncovering ways to routinize tasks. So it’s important that a routine task is not necessarily a simple task, at least to a human mind.

As legions of kids struggling through math class have realized, humans are not logic machines, we’re social machines. Computer brains were built to process logic while human brains were built (and trained!) to process social signals.

That we can do any logic at all is pretty cool. But mostly our processing routines are veiled, messy, parallel and unbelievably complex.

But wait, you say: computers have been around for, what, 50 years? And they’re already deriving the laws of physics! Took us millennia!

Perhaps, but the complexity of the the calculations involved in social interaction will baffle the most powerful computers for a long time still; like it or not, the highest form of intelligence is social intelligence. And it cannot be routinized.

Some professionals, like salesmen, are entirely concerned with social interaction. In these cases, the social intellect is king, of course.

I work in a sales business and we think nothing of the most skilled and experienced minds in my company gathering round to debate the implications of a few sentences in a client’s email. Like, literally for an hour or more. Business context, personality, politics, mood, the fucking weather that day. All have an effect.

Now THAT’s complex.

That’s why producers get paid more than actuaries in my biz. They may not have the fancy math, but they’re still smarter.

In any context in which you need to convince other humans of your quality, social intelligence is how you do it.

And that’s every context.