Work, Lean, and Health

I just visited a nutritionist today. I’ve had issues with Gluten for years and I’ve also been diagonosed with Hypoglycima which is a condition where my blood sugar levels aren’t well regulated by my body. The combination of the two has caused me no end of issues. At this point, it’s been difficult to tell the difference between a glutening and low blood sugar, at least a low level glutening anyway, a serious glutening it’s pretty obvious. I feel drunk within a few hours and then have the shits the next day or two. It’s pretty bad. Anyway, the combination has been pretty difficult to pull a part. When i have spikes in my blood sugar it makes me feel out of it as well. So, I’m going to really address both of these issues through better nutrition and probably more working out as well.

How does this connect to work and lean process improvement though? Well, at Cambia, we get a discount for eating salad’s and other healthy foods, so I’ve already been doing that, but that’s not the work connection I’m talking about. I just started reading a book called “Lean is Healthcare” which I picked up because I thought it was actually a book on Lean in Healthcare – pretty understandable confusion I think. I’ve only read a few pages, but as a lean practitioner it really ressonated with me. The premise is that Lean is a way of improving your employee’s health. Thinking about it now, it’s pretty obvious, but it definitely was an Ah HA moment when I read that.

Lean helps create flow in work. This is for both the product as well as the worker. Flow can be described as feeling you get when everything is just clicking. It’s like when a basketball player can’t miss a basic, they are in a state where they are relaxed and feeling good. It’s similar to a meditative state – think about any of the projects that you’ve gotten into and time just flew by. When you think about work, you never think about flow like that. I’m sure you’ve had bits and pieces of flow – but they don’t last very long. However, imagine if you were able to get into a job where everything you did flowed like that. Where you walked into the office and you walked out feeling accomplished, got things done, and excited to come back tomorrow.

I think there are a few companies that encourage that – companies that encourage creative coding and design are likely the best at this type of work. Why? Because they are all about thinking and connecting ideas and concepts to each other. It’s easy to get into a meditative state when you’re really jamming away at code. I feel a similar mode of thought when I’m blogging with a keyboard that works.

Work like this makes you feel better. It’s better for your health, better for your life balance, and better for your confidence. With that in mind, shouldn’t it be a moral imperative for a company to shift to enabling work like this? Work that makes you feel accomplished, healthy, and productive? Isn’t it also a financial imperative as well as all these things increase the value the company gets out of you as an employee?

I think the answer is yes to all these questions. I will be thinking about this as I work at Cambia continually driving towards for productive work and healthier stress balance for the employees.

Startups are going to save us, relax everybody

In typical Silicon Valley Breathlessness Forbes published an article by Victor W. Hwang arguing the fact the Startup movement isn’t about startups. He argues that it’s actually a movement to free people from the chains of our current economic system. I definitely don’t buy this. Most people start a company for one of two reasons, they find a problem that they have a better solution for than anything provided (or a novel solution) or to make money. Typically it’s a combination of the two. No company in existence is out there not to make money. Companies that aren’t profitable cannot stay in business for long unless you’re lucky and funded by people that thing you will eventually make them a lot of money.

An opinion piece in the NY Times from 1/2/2014 pretty much sums this fact up. You’re replaceable at a startup and likely even more so than any time in the ¬†future of the company. It’s really easy to fire people when you have no money, especially if you are open and honest about how you go about letting people go.

Furthermore, if the startup movement was in fact about bettering the plight of people we wouldn’t be seeing the social stratification that we’re seeing in cities like San Francisco, ground zero for the startup movement. In SF some of the neo-techno-libertarian-elite are upset that they even see the poor people on their streets rather than out of the way like in cities like NYC (he issued an apology not unlike Tiger Wood’s for being a sex addict). Not only are these the people that are involved in the startup movement, but they are funding it. Yes, I know that this is only one person and on the other side you can point to Alexis Ohanian of Reddit fame, which really is doing a lot of social good.

In some ways the startup movement has made it easier for people to be cogs in the wheel. They work long hard hours, large companies like Facebook and Google push and push to get more for less. In many cases this can cause depression and the exact opposite of what the Startup movement is striving for. In fact, the goal of the Lean Startup is to make it extremely easy to ramp up new employees and ensure full coverage if something goes wrong. These companies and products are designed around the idea of building in quality rather than testing or patching it in. Of course, there’s a benefit to the employee in these cases too – they’re free to really explore new problems and create new things without needing to worry about reoccurring problems.

I do believe there are many startup founders are genuinely trying to change our society for the better, but it hasn’t been a frictionless process and will likely only get worse as we move forward. The Sharing Economy, for example, has come under fire from traditional companies, neighbors, politicians, and even members of the sharing economy. While in other cases, such as Zynga, we see companies that are essentially parasites that thrive through creating addicting games and clogging a platform with their notifications (those notifications stopped and Zynga basically died).

It’s important to be skeptical of statements that glorify any portion of our culture. The article that spurred me to write this has a similar tone as many of Thomas Freeman’s, of the NYTimes, articles, fully optimistic, but missing a broader portion of the population and the long term impact. We should be wary of these articles because we’ll end up believing that it’s more complicated to calculate a median value than an average. The startup movement is to help people start companies, some founders are dreamers, some truly try to change how work is done, but they most aren’t truly changing the world in amazing ways. We’ll be fine if reddit, AirBnB, or some other services vanishes. We were when Digg, Google Reader, Palm and any other influential company vanished.

Intellectual dishonesty in corporate America, CEO Salaries

Apparently CEOs are upset that the Security and Exchange Commission is going to require calculation of CEO pay based upon median salary of all employees rather than Mean or average. They argue that this would burden them with unnecessarily complex calculations. This of course is an absurd statement. Let’s do a thought experiment to walk through the difference between averages and medians.

You, a friend and Bill Gates get on an elevator, your current net worth is $100,000, your friend’s is $200,000 while Bill Gates is somewhere near $60 Billion. The average net worth of the three of you would be $20 billion, while the median is $200,000.  The difference in ratio between these examples are staggering. In the example of averages, Bill Gates is only 3:1, while in the second example it’s 300,000:1. Major difference correct? This example is specifically designed to highlight the massiveness of the differences between averages and medians.

As you can see in the chart above with a skewed distribution there will be a gap between the median and mean. We hear this routinely when people discuss home prices, they are always discussed in medians, because the average price of a home is positively skewed by millionaires in most cities. Like the one above.
So what would the difference in salaries be if salaries are calculated off of median rather than means? Well, let’s use some real numbers, in 2004 the US the average annual income was: $60,528 while the median was $43,318 (source wikipedia). We’ll look at the extremes for ratio difference compared to these numbers, the JC Penny CEO earned 1795:1 the mean worker, so his salary could have been: $108,647,760 for the Mean compared to $77,755,810 or $31 million less (obviously the mean and median salaries for JC Penny’s employees are lower than the median or mean values for the US). On the lower end the CEO for Agilent Technologies earn a measly 173:1 or (mean) $10,471,344; (median) $7,494,014 or $3 Million more. 
Limiting CEO salaries based on the median means dramatically less money for the CEO. It also highlights disparity in numbers of people that are making really low salaries. I would imagine that for a company like McDonald’s or Wal-Mart the median salary for employees is between 20-30k/year, which would drive down the maximum salary well down if the limit is something like a ratio of 100 (median of 25k*100 = 2,500,000). 
The true concern of the complexity comes from not the new method of calculating the maximum ratio a CEO can earn using medians – especially as it’s built into excel (=average()/=median() ) and nearly all financial tools, but in the complexity of creating compensation packages to get around that law. If the law is strictly implemented where there is absolutely no wiggle room where all stock options, bonuses, and base salary cannot be above some set ratio on the median salary, then the only way to pay CEO’s more is to shift that median up. This would impact profits and most likely profit margins. A way around this would be to outsource manufacturing and exclusively design in the US thus shifting up median salaries. It will be interesting to see how CEOs and leadership address this.
Otherwise they might have to make a lot less money per year and save shareholders a lot of money.