The Pain Papers
8/8/2001
The Pain Papers
Newsletter #4 - August 8, 2001
Copyright (c) 2001 Christopher K. O'Leary
All Rights Reserved
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CONTENTS
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- Experiences, not Experience
- Academia and Relevance
- Arsonist Firefighters and Pain
- The Paradox of Educational Spending
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THOUGHTS
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EXPERIENCES, NOT EXPERIENCE
One of the things that drives me crazy is the degree to which
large companies complain about innovation. They want ideas but
don't seem to know how to get them. They thrash about but never
seem to get results.
I would submit that the root cause of their problem
lies in how and where they look for ideas for new products and
services.
The problem is that most large companies try to
generate ideas by assigning the task to a very small number of
experienced (or really smart) people with a narrow range of
experiences instead of to a much larger number of less
experienced people who will have a wider range of experiences.
There are a number of problems with this approach.
First of all, the math is against companies that take
this approach. By reducing the number of people who are
responsible for generating ideas, large companies doom
themselves to failure almost from the outset of the process.
Numerous studies show that less than 1 percent of ideas tend to
be good ones, and some have shown that the ratio is 1 good idea
out of 1000 to 3000 ideas that are generated. Obviously, if you
only have 10 people generating ideas, then they will produce a
hit much less often than will a company that throws 100 or even
1000 people at the problem.
Second, the People Who Do The Thinking (and usually
work in the Strategic Planning or New Venture groups) are often
far removed from, and usually out of touch with, the mainstream.
They are generally wealthier and better educated than Ordinary
People. As a result, they will be less likely to relate to the
problems of Ordinary People. My favorite example for this is GM
during the early 1980s. They missed the pain that their cars
were causing because The People Who Did The Thinking worked in
an isolated building, drove cars that were maintained by the
company while they worked and lived in a city where nearly
everyone drives an American car. It was little wonder that they
missed the import trend - their experiences made it almost
impossible for them to notice it.
Third, research has shown that the more experience that
you have in or with a subject matter, the less likely that you
are to have ideas about how to improve that subject matter. As a
result, experience often yields fewer ideas, not more. This is
due to the Paradigm Blindness phenomenon that I talked about in
Newsletter #2.
The result is that the innovation efforts of most large
companies are doomed from the start.
What companies should be doing is training a large
number of Ordinary People to find the pain that exists in the
world. They should institute Pain Recognition Training programs,
much like they instituted Quality programs. The sheer number of
experiences that these people will have will be much more likely
to identify real problems and generate practical ideas than any
amount of cloistered idea generation.
To those who object to this and say that most people
are not creative, I would respond by saying that what I am
talking about is not creativity. This is not about coming up
with wild and crazy ideas. This is about simply opening up your
eyes and paying attention to the things that you have learned to
put up with.
This is about learning to notice opportunities, not
generating ideas. Surely everyone can learn to do that?
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ACADEMIA AND RELEVANCE
On a related vein, let me talk briefly about one of my favorite
subjects - academia. The ever-present rant against academia is
its lack of relevance. I believe that the experience/experiences
model points out why this is the case.
Simply put, the work of academia is so academic because
the focus of academia is on experience and not experiences. The
way to succeed in academia is to increase your level of
experience, not to increase your experiences. Your main goal is
to become the expert in a field and produce papers that others
cite. In fact, teaching and consulting, which are the activities
that are the most likely to yield interesting experiences, are
often looked down upon as somewhat crass and less pure. They
also don't do as much to advance your career. While this is
changing to a degree, the ultimate goal of many academics
remains a pure research position which requires no teaching and
little interaction with others outside of their tight-knit
community of experience. Of course the problem with this is that
this tends to wall academics off from the experiences that will
increase the relevance of their ideas and work. They end up like
the Greek philosophers who developed a model of Physics based on
what made sense in their heads, not how the real world worked.
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ARSONIST FIREFIGHTERS AND PAIN
One of the problems that has puzzled me over the years is why
pain persists. Why don't companies actively seek out and
eliminate all of the sources of pain that they can?
I think the idea of the Arsonist Firefighter goes a
long way toward explaining this riddle.
Before I go any farther, let me first explain what I am
talking about. An Arsonist Firefighter is a firefighter who
deliberately sets fires so that he can either have something to
do and/or show himself to be a hero. In the context of business,
an Arsonist Firefighter is a person or company who deliberately
designs pain into a product, or does not design pain out of a
product, in order to please some constituency other than the
customer.
I would submit that pain persists because many
companies have adopted the Arsonist Firefighter business model.
That is, they do not design pain out of their products in order
to give themselves or someone else something to do.
Why would they do this? Well, the answer is related to the fact
that you often see this model being used by companies that sell
through an independent sales channel.
For example, I would submit that the generally low
quality of products produced by U.S. auto companies in the 70s
and 80s, while probably not being a deliberate strategy, may
have been tolerated because of the Arsonist Firefighter model.
Why would this be the case? Well, this model has two benefits.
First, it gives the dealer channel a flow of highly profitable
repair business. Second, it gives people a reason to start
looking around for a new car after only a few years. In this
case, a perverse incentive exists to create cars that were
actually less and less reliable, which is frighteningly similar
to what actually happened during the 70s and 80s.
You can find other examples of this phenomenon in other
industries.
For one thing, I have talked to a number of people who
have worked with various ERP products. Many people who know the
space always wondered why SAP beat out Baan by such a large
margin, even while Baan appeared to have had a "better" product.
I would submit that one reason that SAP won out over Baan is
that it was an "inferior" product but was a better fit for SAP's
channel.
That is, all of the things that made people complain
about SAP actually made it more attractive to SAP's channel -
consulting firms. First, people complained about SAP taking
forever to install, but this let consulting firms staff long
engagements. Second, people complained that SAP was hard to use,
but this let the consulting firms sell lots of end user
training. Finally, people complained that SAP was rigid and
forced you to fit your organization to the way it worked, but
this let the consulting firms sell change management services.
The computer hardware industry also seems to a make
good use of the Arsonist Firefighter model. For example,
upgrades are the engine that powers the computer industry. As a
result, software and hardware companies have an incentive to
give people a reason to upgrade. They often do this by writing
applications so that they require a machine upgrade. While this
may not be done explicitly, Microsoft has said that they in the
past they designed products for computers that did not then
exist. They were counting on people upgrading. Since
applications drive the sales of operating systems (which are the
real cash cow), the model seems to have been to create pain with
applications and fix it with operating systems. The press is
also complicit in the act by always talking about new machines
and new capabilities and heightening the perceived pain of
owners of existing systems.
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THE PARADOX OF EDUCATIONAL SPENDING
Here's a big question for you.
Why is it that, despite all of the money that the
United States spends on education, the system still seems to
deliver mediocre results? Why do resource-poor parochial schools
seem to consistently deliver better results than their wealthier
public school peers? Why do home-schoolers do so well in
spelling and geography bees?
I think part of the answer has to do with a
relationship between parental involvement and perceived pain.
To explain this, let me first share my own experience.
I have three children, two of whom are in school. We currently
have them in a small Montessori school here in St. Louis. This
is a great school but the school is in a tight financial
position. As a result, my wife and I are always doing things to
help the school out. We do this because we know that our kids
will not have as good of an experience if we do not get
involved.
I know that, due to the school's tight financial
position, my efforts are required to ensure the quality of my
children's education.
In talking with friends who send their kids to public
school, I have found that, while they care about their kids'
schools, they do not share this attitude. They do not get as
actively involved. Yes, some people help out at school, but they
seem to be less concerned with how things are going at school
and less involved.
Why is this the case?
My hypothesis is that the explanation for the
difference in attitudes and results is related to the different
funding levels of the two schools. The logic goes like this. As
parents see more and more money flow into public schools, they
perceive that the pain that is being felt by the school
decreases and thus worry less and less about how the school is
doing. This leads to their worrying less about becoming actively
involved with the school. Their kids then pick up on this
attitude and it influences their opinions of the importance of
school - namely, that it's not something to worry about.
The theory predicts that, beyond a certain point,
parental involvement likely DECREASES as funding levels increase
- and this drop in parental involvement and engagement is
noticed by the kids and influences their opinions regarding the
importance of education.
In contrast, the parents of children in small private
and parochial are continually aware of (and being made aware of
in mass) the struggles of, and pain that is being felt by, their
children's schools. This leads to their becoming more involved
in the process. Their kids then notice the importance with which
their parents regard their schools and these attitudes influence
their own opinions regarding education - namely that it is
important and worth worrying about.
If true, then this hypothesis has significant public
policy implications. It means that in many cases we should look
at cutting school funding and not increasing it - or at least be
realistic about the results of increased spending on public
schools.
I'd be interested in whether anyone has experience with
this topic. Have you seen the results of increases and decreases
in school spending?
As a postscript, I must say that I believe that the idea of
perceived pain and resource constraints also applies to other
situations. For one thing, it may be one reason why increases in
welfare spending do not seem to yield results beyond a certain
point. If welfare spending is too high, people may decrease
charitable giving because they assume the government will carry
the load and that they do not have to worry about the pain being
felt by the poor.
It also applies to companies. I have worked in both
10,000-person consulting firms and 10-person startups. The
differences in the levels of involvement and commitment in the
two types of organizations are remarkable. People tend to really
care in a startup and are usually highly committed in a startup.
This often isn't the case in large organizations.
The most interesting demonstrations of this phenomenon come from
observing what happens to startups that do not face the pain of
resource constraints. These are companies that subscribed to the
idea of "Go big or go home." They seem to struggle more than
their resource-constrained peers. Companies like PowerAgent,
NeXT, and Scient come to mind.
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READER COMMENTS
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I received this note from Brian Middendorf the other day...
"I find your idea very interesting. Armen Alchian of UCLA had
a similar idea with regard to traffic safety. The advent of
seatbelts, padded dashboards, etc led to more fatalities
(actually the number of driver fatalities stayed the same, but
pedestrian injuries increased). Why? Because people drive less
carefully when they feel their cars are less dangerous. So Armen
proposed making the cars more dangerous so people would drive
safer. His proposal? Have a spear mounted on the steering wheel
that was targeted
directly at the driver's heart. A guaranteed fatality would make
people drive in a safer manner—similar to your idea of making
the danger of clutter higher to reduce clutter."
While this idea is as sick as my Brown Recluse Spider idea, I
think both point out something that we need to take into account
when designing new products and services. It also says a lot
about unintended consequences.
The effects of the 55 MPH speed limit may be related to
this idea. I have driven in Europe and found that, while the
speeds were fast, things weren't that out of control. People
seem to be more careful because of the speeds. Does anyone know
what happened to accident rates after the U.S. raised speed
limits? The Theory of Perceived Safety (I just made that up)
would say that they would go down as speed limits go up due to
people becoming more careful.
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QUESTIONS FOR YOU
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I am always interested in learning why you are here and what
you hope to get out of this experience. This is especially the
case for my international readers. The fact that 1/3 of you are
from outside of the U.S. (13 countries at last count) is
unexpected and fascinates me - plus it gives me a reason to do a
world tour at some point. Please drop me a line with your ideas,
comments, and suggestions.
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