Learn a new word: Fault Tolerance

Why does your car continue to run if one of the tires goes flat?

How was Sully able to still steer and point the plane, eventually landing in the Hudson River, when both of the plane's engines had lost power?

How are our organizations able to (more or less), carry on when something goes wrong, or someone fails to get the email, or Jerry in accounting just screws up?

It's called Fault Tolerance, and it's today's entry in the wildly popular 'Learn a new word' series. First, some definitions from our pals at Wikipedia:

Fault tolerance is the property that enables a system to continue operating properly in the event of the failure of (or one or more faults within) some of its components. If its operating quality decreases at all, the decrease is proportional to the severity of the failure, as compared to a naively designed system in which even a small failure can cause total breakdown. Fault tolerance is particularly sought after in high-availability or life-critical systems. The ability of maintaining functionality when portions of a system break down is referred to as graceful degradation.

A fault-tolerant design enables a system to continue its intended operation, possibly at a reduced level, rather than failing completely, when some part of the system fails. The term is most commonly used to describe computer systems designed to continue more or less fully operational with, perhaps, a reduction in throughput or an increase in response time in the event of some partial failure. That is, the system as a whole is not stopped due to problems either in the hardware or the software.  A structure is able to retain its integrity in the presence of damage due to causes such as fatigue, corrosion, manufacturing flaws, or impact.

Why does fault tolerance matter?

Obviously it matters a ton in complex, mission-critical technologies and machines that rely on hundreds, if not thousands of components, connections, and systems. If every time a single failure point in a car or a plane or in a power delivery grid caused the entire system to crash and become inoperable, then, well, we would hardly every drive or fly anywhere and we'd be sitting in the cold and dark in our houses most of the time.

As the sage Bender once said, 'Screws fall all the time, sir. The world is an imperfect place.'

But why does falut tolerance matter more generally?

Because I think we don't spend nearly enough time thinking about what will happen when something goes wrong in our organizations, or in our lives for that matter. Even just thinking about bad things happening is so unpleasant for folks that we tend to underestimate the chances of them happening, and undervalue the impact when they do happen.

But the engineers who design systems and processes and machines with the idea of fault tolerance in mind seem to have come to terms with the inevitability of bad things happening - like both engines going dead on a jet plane, and have proactively designed the system response to such failures. 

Put more simply, they know something is going to go wrong, because something ALWAYS goes wrong. The trick is knowing ahead of time not just that something will go wrong, but how to prepare the rest of the system and people and processes to not allow the thing that went wrong to crash the entire system.

Something always goes wrong. In your car and in your semi-annual budget task force. 

Be ready instead of surprised next time. Think about fault tolerance and what it means for your shop.

Learn a new word: Asymmetric Information

Let's go with the definition first, a decent example of challenge that asymmetric information causes in a non-HR and workplace context, and then tie this up, (and this is the real reason I wanted to talk about this), with a great example of how this is playing out in HR/Talent and is being exacerbated by a recent legislative change in Massachusetts.

Asymmetric information - In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions, which can sometimes cause the transactions to go awry, a kind of market failure in the worst case. Examples of this problem are adverse selection, moral hazard, and information monopoly. Information asymmetry is in contrast to perfect information, which is a key assumption in neo-classical economics.

Asymmetric information plays out all of the time, in just about every negotiation or contract that most of us participate in. When sellers know more about the value of products and services than buyers do - say in the case of a used car, or even a hotel room, then often we as buyers can be left uncertain and anxious about the prices we pay. Conversely, when buyers know more about the value of an item than the seller, think of a rare baseball card discovered at a garage sale in a bin offered for $1.00, then sellers can get underpaid for their offerings. 

The internet, social networks, online sites designed to 'uncover' or reveal the true value, (or at least what other people have or would pay for a given good or service), have gone far to reduce the potential negative impact of asymmetric information in many markets. TrueCar provides insight into new and used car prices, SeetGeek aims to let you know if the tickets you are about to buy for the ball game represent a good deal or not, and auction-type sites like Ebay and Priceline put much more power, (if not always perfect information), in the hands of buyers of goods and travel services. 

But even in the age of TripAdvisor and Glassdoor, many of the markets in which we transact are still pretty far from exhibiting so-called 'perfect' information, where buyers and sellers are equally informed, (or can reasonably obtain such information), thus resulting in efficient functioning. Are you really getting a good deal on that refirgerator or car or flight to Phoenix? Who knows.

That's what takes me to the HR/Talent example I mentioned that the top, specifically, the recent move by Massachusetts to prohibit asking candidates about their current or prior salary history during the interview process. This legislation, according to Massachusetts officials, is designed to combat wage inequality - the theory being that if women or other groups have been unfairly underpaid in the past, then making their current salary an anchor point in negotiations for their next salary will simply perpetuate this wage inequality.

And the other, unspoken, impact of this legislation will be to reduce, (but not eliminate), the asymmetric information condition that exists in any salary negotiation. In any potential job offer/negotiation the employer knows certain pieces of information that the candidate has almost no way of determining on their own. The salary budget (or range) for the job, the salary of the last person who had the job, the overall financial/budget situation of the organization, and the 'wiggle room' that the hiring manager has to negotiate the offer.

In this negotiation the candidate has exactly one piece of information that the potential employer can probably guess at anyway - their current, or most recent salary at their prior job, and ostensibly, the baseline to figure out what kind of a bump (fifteen, maybe twenty percent?), it would take to get the candidate to make a move. And lots of recruiters, and even many online job applications, press the candidate to divulge this bit of information, their only potential edge in any negotiation, very, very early in the process.

Recruiters and hiring managers will line up to bemoan the Massachusetts law, (and the others like it in states like New York and California that will almost certainly follow), clinging to the 'Let's not waste everyone's time if the salary for the job is not sufficient for the candidate'. Better to find that out up front, they argue. But figuring out the ballpark range a candidate might be willing to consider is part of your job, Ms. Recruiter. And there are other, less lazy ways that simply demanding that candidates turn this information over to you before you've even spoken to them.

Asymmetric information plays havoc in all kind of markets. It's bad economics, bad policy, and bad for the person who is sitting on the wrong, or less-informed side of the table. And it doesn’t matter how rational, or well-intentioned people are, or how well the process/markets are set up - asymmetric information throws a wrench in the works, one that many candidates can spend a career trying to recover from.

Have a great week!

Learn a new word: Goodwill Impairment

If you follow the tech and finance news at all, you will no doubt be familiar with the recent and ongoing troubles and challenges being experienced at Yahoo.  

Yesterday the 'old school' internet company announced some strategic shifts, including the plans to reduce its workforce by 15% in the coming months, resulting in an employment count of about 9,000 -  42% below the level in 2010.

Part of the earnings announcements included this statement, about on-paper losses totaling about $4.4B due to an accounting exercise known as 'Goodwill Impairment'. Here is the language from Yahoo, then we'll break it down a little, because well, that's what we do here on the blog:

We concluded that the carrying value of our U.S. & Canada, Europe, Latin America and Tumblr reporting units exceeded their respective estimated fair values. The goodwill impairment resulted from a combination of factors, including decreases in our market capitalization, projected operating results and estimated future cash flows.

Seems kind of boring, almost normal accounting-speak right? Let's look at the definition of a 'Goodwill Impairment', courtesy of our pals at Investopedia:

Goodwill that has become or is considered to be of lower value than at the time or purchase. From an accounting perspective, when the carrying value of the goodwill exceeds the fair value, then it is considered to be impaired. Negative publicity about a firm can create goodwill impairment, as can the reduction of brand-name recognition.

And in the notes about the accounting requirements related to Goodwill Impairment for companies, Investopedia says this:

Generally accepted accounting principles, (GAAP), require businesses that have the type of assets that might be impaired to make periodic tests to see if those assets are, in fact, impaired.

So the accounting rules require if your business has a potentially 'impaired' asset like Yahoo's $1.1B Tumblr division, that you must from time to time evaluate (and likely have audited), the 'true' value of the asset. And in the case of Tumblr, it turns out that it really isn't worth $1.1B and the true value is something like $300M, then you have to take a charge for the difference, ($800M), in the financial statements. And that stings investors a little bit. Ok, maybe a lot.

Why the mini-accounting lesson?

Because the periodic review, valuation, and write-down of financial assets in the accounting sense is probably an exercise we can and should apply to all kinds of projects, technologies, programs, even personal relationships. 

Does that 'progressive' and high-tech performance management system and process you implemented in 2012 still have value today? Or does it need some kind of 'impairment' write-down as well?

Does the new employee orientation guide that you spent big bucks developing and printing up in 2010 still have relevance today, in light of all the changes in business, technology, employee expectations, and more?

Does your 'best work friend' that you have had since 2008 remain the 'right' person for you to pal around with, or are they kind of holding you back at the office?

As Yahoo's experience with it's Tumblr acquisition remind us, things can change really, really fast. And an asset that was worth $1.1B just a couple of years ago suddenly is worth less than half that amount today. But the 'Goodwill Impairment' while painful, at least provides financial types a mechanism to recognize these changes, attempt to make them right on the financial statements, and give leaders a chance to move forward from a new starting place. And when times are bad, that at least offers a little bit of hope moving forward.

If you could take a 'Goodwill Impairment' charge in your business or life today, what would it be?

Learn a new word: Face with tears of joy

At the risk of sounding a little too much like the 'get off of my lawn' old codger that I am fighting against becoming, please take a look at the image on the left, your Oxford Dictionaries 'Word of the Year' for 2015 and try hold back your tears for the future of humanity while you contemplate the same.

The 'Word' of the Year for 2015 as you have certainly deduced is not really a word at all, but rather an emoji, and to be precise, it is the 'Face with tears of joy' emoji. And if the folks at Oxford are correct you have doubtless seen this particular emoji plenty of times this year as their research claims 'face with tears of joy' to be the most-used emoji of 2015. I guess 'smiley-face' is just so 2012. Note to self: I probably need to up my emoji game.

Just why did Oxford Dictionaries go with an emoji, never mind this particular one as its Word of the Year? Let's take a look at the reasoning from the blog post announcing the selection:

Emojis (the plural can be either emoji or emojis) have been around since the late 1990s, but 2015 saw their use, and use of the word emoji, increase hugely.

This year Oxford University Press have partnered with leading mobile technology business SwiftKey to explore frequency and usage statistics for some of the most popular emoji across the world, and 😂 was chosen because it was the most used emoji globally in 2015. SwiftKey identified that 😂 made up 20% of all the emojis used in the UK in 2015, and 17% of those in the US: a sharp rise from 4% and 9% respectively in 2014. The word emoji has seen a similar surge: although it has been found in English since 1997, usage more than tripled in 2015 over the previous year according to data from the Oxford Dictionaries Corpus.

Admit it, you have used an emoji(s) in some kind of 'business' correspondence in the last month or so. Even if it was not a full-fledged 'image' emoji, you have definitely dropped a :) (technically, an emoticon, not an emoji, but you get the idea), somewhere in an email or a text to a business contact. It is ok, I have to.

And I suppose with recognition of the rise in popularity and increase in common usage of emojis by organizations like Oxford Dictionaries it is becoming a little less troubling to admit that you have been peppering emails and other messages with those cute little characters. And why not? A picture is worth a thousand words and all that, and NO ONE wants an email of a thousand words, or even half that.

But the larger part of the story, and the reason why I have submitted 'Face with tears of joy' as the latest in the 'Learn a new word' series is that it reminds us (again, as if we needed reminding), that methods, manner, and styles of communication, even 'serious' communication, change and morph over time. We are not writing long-winded memos any longer, no one has tolerance for lengthy emails, voice mail is just about dead as a business tool, and so on. 

With the growth in popularity of short messaging services, (SMS, WhatsApp, Facebook Messenger, Snapchat, etc.), the style of interaction on these services are changing and adapting to the medium. Throw in the seeming information overload/time crunch that almost every professional you know will claim these days, and the ability to convey complex information in the shortest, most succinct way possible is a skill that is at a premium.

And since this post has already gone on too long for a post that is more or less about getting your point across more quickly, I will leave with this - it is probably time to step up your emoiji game. As much as I cry a little inside to say that.

Have a great week!

Learn a new word: fact-resistant

Let's start with the definition, courtesy of Wordspy:

fact-resistant adj. Impervious to reason, counter-examples, or data, especially when they contradict one's opinions or values.

From the examples given on the Wordspy entry (on the science behind global warming, politics in the Middle East, violence due to firearms), the term fact-resistant seems to have been most commonly applied or ascribed in these kinds of political or 'hot-button' kinds of contexts. I suppose using the term fact-resistant is a slightly kinder and gentler way of saying. 'What the heck is wrong with you, you big dummy. Can't you just accept the truth of what I am telling you?'

But where fact-resistant is likely to be more relevant and applicable in the HR/workplace/talent management worlds are the conflicts and tensions that can arise between the data and analytics camps and the folks who prefer (or are just more comfortable with), the traditional or old-school ways of evaluating, assessing, and managing people.

Here are a few specific scenarios where you, as a modern, progressive, and 'seen Moneyball six times' HR pro might run into some fact-resistant colleagues:

The hiring manager that 'just can tell from looking in the candidate's eyes' whether or not they should be hired. He's been managing by 'gut feeling' for so many years, why should he change now? What does it matter what your data shows about what sources, backgrounds, and characteristic of candidates predict better performance? 

The CEO who 'gets a good feeling' when she walks around the office at 8AM (and again at 5PM), and sees cube after cube of people diligently working. She is not interested in hearing about your data that shows that engagement, retention, and productivity would all be improved by the introduction of more flexible working arrangements. Everyone looks happy to her, so why make changes?

The Chief Operating Officer that doesn't care that your compensation benchmarking data shows that you are trailing the market in some key areas and job roles - those same places and roles where your data also shows increased attrition and longer time-to-fill open roles than in less important areas. The COO just want to ensure that 'we pay just a little below market' to ensure stable and consistent gross margins. Peg everyone to '5% below market' and stop bugging me about this.

I think you get the idea. But the trouble with these fact-resistant types is not identifying them, it is trying to figure out how to rebut them. Because your normal and expected recourse is to just present more facts. And by definition, this probably isn't going to help very much.

Maybe appealing to the end results, the outcomes, instead of the math and data needed to get there is the best bet. Rather than hitting them with dashboards or spreadsheets that try to sell your idea, just go big on how you know how to fix the problem with X, Y, or Z, and how they will not only benefit, but also look like a hero in the process. 

The fact-resistant types are tough though. I still think the Knicks are a title contender this year.

I don't care what the numbers say.

Have a great week!