Management: The Mystery of Seeing the Real Issue

I have worked in strategy consulting for a total of 11 years, and my four years working for Medicare was, in many ways, a constant adventure in strategy consulting in its own way.

I've summarized strategy consulting, at least in my work, in this way:

• Understanding what is happening, while it is happening.
• Understanding what is likely to happen next.
• Understanding what to do, to affect what is likely to happen next.

While this sounds trivial - I once put these bullets on a slide with a baby playing with a few ABC alphabet blocks - it's difficult to do in practice.

My first career was in science, and everyone knows science is difficult (at least by the yardstick that things often don't work.)   This can be less obvious in business.  The economist Ludwig van Mises, a libertarian capitalist and fervent anti-communist, framed Lenin as an idiot in the following way.  Lenin was asked, after the workers take over the factories, how will the factories be managed?  According to von Mises, Lenin replied that it would be trivial, as modern business management was simply a matter of accounting.   Even in the 1940s and 1950s, von Mises thought this was absurd, and today, no one thinks Steve Jobs' success was based on taking one or two accounting classes.

The same idea was brought home by Harvard Business School cases we worked through in MBA school - the case studies are often open ended, maddening lack a single right answer, and often demonstrate that seemingly articulate managers (in the cases) had no actual idea what was going on or how to solve it.

And again the same point is made right on the opening page of two very different books - "Creating Public Value," by Mark Moore of the Harvard Kennedy School of Government (1995), and in "The Moment of Clarity," a business strategy book by Madsbjerg and Rasmussen (2014).

"Creating Public Value" focuses on what makes good government, but opens with the vignette of a librarian confronted with a library that was increasingly awash in noisy school children from 3 to 6 pm.   Is the correct response to corral the kids or even discourage them - "the influx disrupted the library."  Or was it to redefine the purpose of the library, to repurpose its array of its resources, to "reengineer" the library in the face of a changing environment?   In "Moment of Clarity," written twenty years later and for a wholly different audience, the opening page is a sports equipment executive asking bewildered in 2002: "Is yoga a sport?"   His company made sports equipment - footballs, basketballs, the tools of competition - but the marketplace seemed to start tilting away from that and towards yoga mats, running shoes, home ellipticals - not "sports" equipment.   The best way he could frame his frustration at the changing environment was concise: "Is yoga a sport?"

When we look at trends in healthcare today - accountable care organizations, bundling and care episodes replacing "coverage decisions," and digital health - we should probably be asking questions that are as puzzled and revealing as, "Is yoga a sport?"

Best Wishes in 2016 from the Quinns

Best Wishes in 2016

The Quinns

Bruce, Genia, Summer, Skylar and Trixie

They were crazy about Hemingway.   They talked about Hemingway and after a while they sounded like Hemingway.  They had attended the Hemingway museum exhibit, and had taken in every detail.  But that came later.  That was in November, and in New York.  The year started much earlier, as always.

Early in 2015, it was Spring Break.  Genia and the girls went to Daytona Beach, because people had spoken well of the sun, and the food, and because that was where Grammy and Grampy lived.   Someone would put a shot of rum in your hand and  you watched the sunrise come up over the Atlantic waves.   The father, Bruce, had joined them late in the week.  He took the oldest daughter, Summer, and they flew from Orlando to New York.  Then they stopped, and rested for a few hours, and took another flight.  To Berlin.  Where they stayed a week, and they saw a lot of things, and it was good.   Some days it snowed.  Those were good days to be on tour inside the 1930s Tempelhof airport buildings, where you heard talk about the Berlin Airlift, or to be in underground bomb shelters from WW2.  

Summertime came, and the girls finished seventh and ninth grades.   It was time for time off.  The family took time off.  They all went to an airport and got on a big jet and changed planes somewhere and ended up in Lisbon.  Lisbon was good, because you could rent an apartment there, for not much money, on a busy street full of restaurants in the old city.   You could take bus tours, or ride in little jalopies the size of golf carts, and see ruins and museums about tile.   You could rent a car in those days, and drive to the Algarve, four hours to the south, where the beaches were unspoiled.   They took pictures.  They swam.  Someone got sunburned, but no one complained.  There were narrow streets where you couldn’t adjust a side mirror, and so steep it crested on top just like a roller coaster.  They joked it was the Point of No Return, but it was just a hilltop village and down at the bottom there was another beach, and a little harbor, and a nice café with some people who’d moved there to retire, from England.

They came back to Los Angeles then, and Skylar studied Hebrew.  She studied it for her Bat Mitzvah.  She did it, and a lot of family came, and other people, too.  There was a big party, the kind with aerialists suspended high above the swimming pool and all sorts of foods.  The dog mostly stayed inside, and would later say it had been good.

They looked for Hemingway.  They looked for Hemingway in Los Angeles, in Santa Monica, and in Long Beach, but they could not find him.  They heard he was in New York, and he was, so they went to New York.  They stayed at the Waldorf Astoria, the grand hotel, and went to artsy movies in the East Village.   They saw the big Hemingway exhibit at the JP Morgan museum, but they also went to the Met, and there were a lot of old things from Egypt that they had seen before, but they saw them again.   They met friends at Italian restaurants, and when it was time, on Wednesday night, they saw the Macy’s balloons lined up at 11 pm on the Upper West Side, where there were 50,000 people and you couldn’t get a taxi home.   

Christmas came, and there were no relatives, but a lot of friends.   There will be more time for relatives.  Next year.  In 2016.

Things I Learned in MBA School: the Fifteen Year Lookback

2016 marks the 15th anniversary of my completion of an MBA at the Kellogg School of Management, undertaken across two years of evening courses while I was an Assistant Professor of pathology there, at Northwestern's medical school.

What seems important after 15 years?

Harvard MBA Case Studies.
I recall the first class where we were assigned a Harvard Business School Case Study - of which there are many hundreds, all unique in detail but generally about ten pages long, describing a business, some of its market forces or problems, and providing tables and graphics of information in an appendix.   You read the case studies, and they are usually discussed Socratically in class.

I remember a defining moment in realizing there was no right answer, and that even the definition of the problem could be undertaken in radically different ways, and that "The Management" (whose views were captured in the case study) might have had no clue as to what was really going on.   This is an important lesson in my strategy consulting work today - we might have no idea what is really going on...yet.  

Teamwork.  
We did a lot of team work projects, and since we were all working full time and taking night school, these often meant Saturday and Sunday afternoon sessions.   To several, I brought along a six month old, hoping she'd sleep or be content with a bottle.   As students, we had completely different backgrounds - accounting, sales, engineering, and so forth - and were often confronted with problems none of us were familiar with.  Everyone had their voice and their unique contribution.  While medical care is also team work - say, a surgeon, an anesthesiologist, residents, nurses, hospital pharmacist and so on - the team projects in MBA school drove home how different people can collaborate suddenly and smoothly to cope with the unknown.

There was one project was doing a business analysis of Krispy Kreme with five or ten year financials in a complex Excel spreadsheet and a written assessment of what the share price should be based on a long term pro forma.   There was no "right' answer - it was an exercise in thinking through future events, quantitating risks, benefits, and scenarios, and showing your work was rationale.   We were learning-by-doing, and we were learning the toolbox that we used for "Krispy Kreme" is used when a venture capital firm invests $10M in a Series B round of a 2016 digital health startup, for 10% equity, thus valuing the company at $100M.  The investment doesn't make the valuation; they've worked backward from an abstract, complex and futuristic valuation to determine that a new investment with $10M of real money is worth exactly 10% of the company's real stock, today.

Innovation.
My couple years in MBA school encompassed the height of the first Internet Bubble and its early collapse, when predictions of "Dow 25,000" became a reality of "Dow 6,000."  This was good preparation for the global real estate and financial collapse of 2008.

Strategy Consulting Interview Questions.
I got interested in strategy consulting, the field where I still work.  There are two types.  One type is closed end but requires quick creative thinking - for example, how many basketballs will fit in a 747.   The point in answering these is to show you can think quickly, and not how accurate your answer is.  See [*].   The other type of interview question presents an open-ended business problem.   "You are the third leading US cellphone carrier, and you want to expand your business to Canada.  In five minutes, explain to me the major issues you'd be thinking about and how to approach them."  

Here's my point.  We had xeroxed training examples of these short, random business scenarios and quizzed each other on them with a five minute timer running.  The crucial learning for me was this: Despite having an MD/PhD and two years of business school, I was initially terrible at these.  With time and diligent practice, I improved enormously.   I had the wherewithal in my brain to answer these, but not the integration to actually do it.  But that skill, abstract as it seemed, was learnable.  I still use the same toolbox of mental gears today, as my current strategy consulting work for a wide range of healthcare companies still, and suddenly, confronts me with unrelated brand new problems on a day to day basis.  

Footnotes:   
How I got to MBA School in the First Place, and What Happened Next.

How I got to MBA School in the First Place.
In 1997, I arrived at Northwestern Medical School as a \a new assistant professor at Northwestern University School of Medicine.  In 1998, my wife was looking at both MBA and MSC (master's of science in communications) programs and I attended some open houses for both.

I'd developed a bit of interest in management when I worked at Bellevue City Hospital in New York 1994-1997, right after residency, and even took a night school management class at New York City College.  My first year at Northwestern, there was a discussion whether an outside corporation ("Dynacare") might take over the hospital laboratories (on which my pathology department depended), and the chairman delegated discussion to one professor among our thirty faculty "who knew something about business."  So I thought taking a few accounting and finance classes in night school (aka the MBA program) might help my career at some future point.

But picking up a book in the university bookstore also had a pivotal influence.  This was David Friedman's "Hidden Order: The Economics of Everyday Life."  Early in the book he talked about why the British wore red coats in 1776: it was felt by the King's generals that the heightened risk of being shot to death (you are wearing a red coat) was outweighed by the difficulty of escaping by fleeing the scene of battle (you are wearing a red coat) or being shot by your own kind.   The idea that this sort of thing was related to economics and management - a sort of "hidden order" that few viewing a painting of a Revolutionary War battlefield would guess - might be discussed in MBA school seemed pretty interesting.  In short, that page in that paperback skimmed in 1999 was the butterfly's wing that pushed me into an entirely different career path in the next couple decades.

What Happened Next?
In the spring of 2001, I interviewed with consulting companies - Ernst & Young, McKinsey, Bain, and Accenture.  I was hired by Accenture, got a signing bonus about half as big as my assistant professor salary (recall it was the internet bubble) and starting the day before Tuesday, 9/11.  My first engagement was at Celera Genomics in Bethesda, and I would work for the BCBS Association, Florida Blue Cross, Wellpoint, Genentech, AstraZeneca, and Bristol Myers Squibb from 2001-2004. This was obviously a colossal jump in nationwide business experience from my prior niche as a med school pathologist.

 I then joined a different consulting company - EDS (now HP Consulting), but in a non-consulting role, as the contractor medical director for Medicare Part B in California.  I stepped down from this in early 2008 to become a Senior Policy Advisor - essentially, a one man strategy consulting operation - embedded in the Medicare policy group of Foley Hoag LLP, a Boston- and Washington-based law firm.  I moved to my fourth post-MBA job in 2015, joining the 40 person Washington-based FaegreBD Consulting group, as part of its health policy/lobbying team.  Faegre Baker Daniels is a 750-attorney firm with circa $450M in annual revenue (Wiki here.)   Across all the post MBA jobs - Accenture, EDS, Foley Hoag, and Faegre - I've lived with home and household in Los Angeles.


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[*]  The point is to show the interviewer that your "brain is in gear" and you are thinking and talking, rather than helpless.  So here's one answer.  Let's say a 747 body is about as wide as four people wide laying down head-to-foot - call that 20 feet - and about 50 rows deep (I've been in row 45 but never in row 85), and each row is about 3 feet apart, so that's 150 feet long.  The length of a cylinder would be Pi x R^2, or 3 x 10^2 or 300.  The volume of a cylinder is area (300) times length (150), and 300 x 100 is 30000 so times 150 it's 45,000 cubic feet.  Let's say a basketball is one cubic foot.  So a 747 could hold something like 45,000 basketballs.  Back in my day, 30 page dog eared xeroxes of such potential questions circulated.  See also, "Are You Smart Enough to Work at Google" (here) or a trade journal article (here).

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http://tinyurl.com/BQ15YearMBA 

2015 Books in Review

Highlights from 2015 reading.  Discussed are:

Technology & The World:
Wizard of Menlo Park, Randall Stoss.
How We Got to Now: Six Innovations that Made the Modern World, by Steven Johnson.
Writing on the Wall: Social Media, the First 2,000 Years, by Tom Standage.

People: 
The Culture Map: Breaking Through the Invisible Boundaries of Global Business, by Erin Meyer.
The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers, by Gillian Tett.

Business Planning & Perils:
Book Pair:  Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of Blackberry (McNish & Silcoff) & Decline and Fall of Nokia (Cord).
How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Privacy, by Stephen Witt.

Healthcare:
Book Pair: America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System (Brill) & The Digital Doctor: Hope, Hype, and Alarm at the Dawn of Medicine's Computer Age (Wachter).
Book Pair: Generic (Greene) and Prescribing by Numbers: Drugs and the Definition of Disease (Greene).

Movies:
Trumbo (2015) and Trumbo (2008).
Youtube documentary: Vienna, City of Dreams (Koerner, 2010).
Youtube documentaries: Three sets on music by BBC's Howard Goodall.

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TECHNOLOGY & THE WORLD

Wizard of Menlo Park, Randall Stoss (2008)
Thomas Edison biography.  A perspective on what drove the man and how he made decisions.  As children we learned that Edison tried 1000, or 5000, filaments for his light bulb, and that success is "99% perspiration, 1% inspiration."  Stoss, while respectful of Edison's genius, also provides a catalog of all the things he did that didn't work.  Edison veered close to bankruptcy at various points, made completely fruitless and very large industrial investments, and died with a couple million dollars - with inflation, perhaps $30M today.  Amazingly little for someone who revolutionized so many kinds of world-shaping technology.  [Ebook, book, audiobook].

How We Got to Now: Six Innovations That Made the Modern World, Steven Johnson (2015).
Johnson is a creative, integrative, and entertaining writer.  The book has just six simple chapters: Glass, Cold, Sound, Clean, Time, and Light.  Johnson shows us an idiosyncratic but illuinating history of each.  Imagine a world where we could not make anything cold - and how vastly the world has changed in this regard since the late 1800s.  [Ebook, book, audiobook.]

Writing on the Wall: Social Media, the First 2,000 Years, Tom Standage (2013).
Tom Standage has a similar style of writing as Steven Johnson.  Here, he looks at person to person communications from Roman days to the present.  Letters were once largely meant to be public and frequently copied from one Roman writer or nobleman to another; and Romans had the equivalent of newspapers.  Standage works forward through the middle ages, the invention of the printing press, the telegraph, the typewriter, and modern communications, with anecdotes and forward and backward looking parallels all along the way.   [Ebook, book, audiobook.]

PEOPLE & EACH OTHER

The Culture Map: Breaking Through the Invisible Boundaries of Global Business, by Erin Meyer (2015).
The most recent book on cross cultural communications, from a business perspective.  I've used a graphic from this book in several talks and keyed a Medicare policy blog on it (here).  Meyer shows how cultures differ in ways large and small, and the insights easily transcend the international business context she starts from.   For example, one of her 8 axes is "communicating" along the poles of low-context and high-context.  (High context provides much more explicit orientation among the parties; I realized I'm vastly more comfortable in high-context situations plus I can now see more clearly the pro's and con's of this.)  [Ebook, book, audiobook.]

The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers, by Gillian Tett (2015).
Tett is an excellent writer who has worked for The Economist and other leading publications.  Here, she takes "Silos" as her topic and looks at them from the perspective of businesses, education, social institutions, and more.   She gives examples of how silos can be broken down to unleash productivity and progress.  Also published with the subtitle, "Why putting everything in its place isn't such a bright idea."  [Ebook, book, audiobook.]

BUSINESS PLANNING AND PERILS

Book Pair:
Losing the Signal: The Untold Story Behind the Extraordinary Risk and Spectacular Fall of Blackberry, by Jacquie McNish and Sean Silcoff (2015).  [Ebook, book, audiobook.]
Decline and Fall of Nokia, by David J. Cord (2014).  [Hardcover only.]

Post mortems on two colossal business slides, and very interesting to see how evolving events looked and felt in real time for the participants.   See my full review of the two books here.  In an amazing postscript to Cord's book, Microsoft bought Nokia's handset business for $7B in late 2013 and wrote it off for $7B by 2015 (here and here; May 2016 follow-up, here.).
     For earlier examples, see Billion Dollar Lessons, by Carroll and Mui, 2008.

How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Privacy, by Stephen Witt (2015).  [Ebook, book, audiobook.]
Like pulling a loose yarn on a sweater, Witt begins with the obscure German team that invented the MP3, and rolls forward through the battles for player dominance, the advent of the iPod, iTunes, and takes us through the eras of Napster and Bitstream.  Recall the famous quotation that "there will never be a use for a computer in the home?"  Here we get: "MP3s will never be useful -- because you can't take a computer to a party."

HEALTHCARE

Book Pair: 
America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System, by Steven Brill (2015).  [Ebook, book, audiobook.]
The Digital Doctor: Hope, Hype, and Alarm at the Dawn of Medicine's Computer Age, by Robert Wachter (2015) [Ebook, book, audiobook.]

Both men have awesome biographies.  Brill is a lawyer, award-winning journalist, one of the most fluent commenters in many forums on America's healthcare mess (his Wiki bio).  Wachter is a senior physician-leader at UCSF, wrote his first book at about age 30 after chairing a global AIDs conference (here), and coined the term hospitalist (his Wiki bio and his blog bio here).  Bitter Pill is the authoritative history of the Obamacare act and its first couple years of implementation, including the backroom politicking, the Exchanges IT fiasco, and the birth of novel health plans like Oscar.  Digital Doctor covers the transformation of medicine through IT technology in fits and starts, with a medley of pro's, con's, false start, hopeful achievements, and an outlook forward.

Book Pair:
Generic, by Jeremy A. Greene (2014).  [Ebook, book.]
Prescribing by Numbers: Drugs and the Definition of Disease by Jeremy A. Greene (2008).  [Ebook, book.]

Greene is a physician-historian at Johns Hopkins and I greatly enjoyed both inventive, original books.  Generic is a history of the generic drug industry - just as you'd write a history of the train or telephone industry.   It's more fascinating that you would guess and the impact on today's global pharma industry and regulatory structures can be grasped more insightfully against this background.  Prescribing by Numbers is a history of how numbers, biomarkers, surrogates shaped both drug development, marketing, the pharma industry itself, and the definition of disease and the work of clinicians.  Examples include hypertension, cholesterol, and diabetes.  Greene is a social and medical historian: the views we take for granted today about hypertension or about cholesterol didn't exist at one point in the not so recent past and had to be crafted - in part by medical schools and experts, in part by regulators, in part by pharma marketers.
     Bonus: Look back to David Rothman's "Beginnings Count: The Technological Imperative in American Healthcare" for similar case studies but built around the conceptions and use of iron lungs and renal dialysis (1997; here).

Movies and Video

Trumbo, the 2015 holiday big budget biopic about screenwriter Dalton Trumbo, played by Bryan Cranston, and his survival of the Hollywood blacklist era.  But I suggest pairing it with Trumbo, the remarkable 2008 American Masters documentary that combines historical footage, talking heads, and several great actors like Donald Sutherland reading from Trumbo's work.  For more on these two movies, my review here.

Vienna, City of Dreams, a 2010 BBC documentary by Harvard professor Joseph Leo Koerner.  Streams for free on Youtube (here). A multifaceted 100 year history of Vienna through the eyes of a historian whose father was a Viennese artist in the 1930s who fled to the US as a young man but left his elderly parents behind.  The film completely changed my view of the city, which I had the chance to visit for a few days last year.

Howard Goodall's BBC Documentaries on Music - streaming for free on Youtube.  There are at least three series.  One is called "Twentieth Century Greats [2004]" - Beatles, Cole Porter, Leonard Bernstein, and film composer Bernard Hermann.  Another series is  "Big Bangs" (also available as a book) which takes inventive one hour looks at the history of music through the lens of notation, equal temperament, the piano, recorded sound, and opera (leading to "the musical.").  A third series is "How Music Works," with creative offbeat perspectives on Melody, Rhythm, Harmony, and other key pillars of music.


For next year?

The Patient Will See You Now (2015) - Eric Topol's book on digital health.
The Emperor of All Maladies (2010)  the big book on the history of cancer by Stanford faculty member Siddhartha Mukherjee.
Reputation and Power (2010) - Harvard professor Daniel Carpenter's book on the history of the FDA, which has been on my book shelf too long unread.

Carpenter's book could form a triplet with a 2012 book on the political history of FDA reform (Pills, Power, Policy, by Tobbell) and the original 1964 journalist's history of the Kefauver FDA reform, The Real Voice (Harris).  We forget contemporary late-50s, early-60s arguments that FDA reform was "like communism," and, would hurt us in the Cold War with the Russians, just as Medicare should be avoided because it was "like communism."

P.S.

An essay on the mysteries of strategy consulting, here.
An essay on being 15 years out from an MBA, here.
 
http://tinyurl.com/BQBooks2015 

Haiku

Haiku

Teaching eels
To wear high heels
Asking for trouble.