Is Diversity Good for Business?

Unlike quotas or affirmative action, which were broadly considered as fairness constructs, diversity is often described as something that makes business more efficient and successful.

In this context, diversity means goals, process and practice with the intended outcome that specific designated demographics will be admitted/hired, promoted and paid more than the demographic of white males, relative to the outcome in the absence of these initiatives. In other words, what is being practiced in many organizations in the US and Western Europe today.

Unlike in academia, where the assertion that a diverse student body contributes to a better education for everyone, the outcome in business should be easier to observe and measure. While a “good” education is somewhat difficult to precisely define, the success or failure of business can be tracked using generally accepted measures. In this case, the chosen measure is GAAP Year Over Year Shareholders Equity, at the department or company level. In simple terms, this measures how much profit is retained after all transactions are accounted for.

Two explanations of exactly how diversity drives business results are women’s pay inequity and product improvements that arise from better understanding customers and unlocking creative problem solving.

Various studies assert that women in America are paid about $0.80 cents for the same work as men. Simply replacing men with women would reduce costs and increase profit.

It’s interesting to consider why markets do not seem to correct this imbalance in the absence of formal diversity programs. There are few conceptually simple actions in business that have the potential for a 20% reduction in costs with little upfront investment. One explanation is that organizations have a natural tendency to resist change. Another, that unconscious bias prevents decision makers from seeing the opportunity.

Both of these should be considered in the context of businesses that have been willing to shift production of hard goods and development of intellectual property to China and India as cost saving measures, and woman-owned and run businesses.

Other studies explain that a diverse workforce – specifically one that looks like our customers – results in better products and services based on two assumptions. The first, that a workforce that resembles the customer base understands them in subtle but important ways. The second, that diverse workforces draw from a large pool of life experience and points of view, and unlock creativity in ways that improve products, services and business and industrial process.

The underlying assumption is that most white men tend to think in similar ways and along narrow creative rails. Adding women and the minorities designated as diverse to the workforce mix introduces new ways of problem solving.

The reason for narrow thought is a combination of similar life experiences and white privilege. The white (in this case) privilege hypothesis argues that the dominant culture remains powerful in part because of an unconscious desire for familiarity. Absent conscious racism, the dominant white male culture invents products and systems that are familiar and comfortable to them, and by accident, unfamiliar to others. The net effect of years of many small oppressive messages like band-aids that don’t match skin color, and the lack of the titles which reflect women’s ability in jobs result in both the sabotage the confidence of women and minorities, and over-confidence and ease of success in white men. These self-reinforcing cycles tends stifle creative thought and perpetuate a power structure.

It would be worth studying both why whites in South Africa seem to have accumulated a majority of the country’s wealth and political power despite being a small percentage of the population. Privilege theory implies that in such an environment, a Black Privilege feedback loop should exist – assuming the size of a demographic is an accurate measure of “dominance”.

It would also be worth studying how business in countries with significantly non-diverse workforces like Korea, Japan, Germany and India can successfully compete in global markets. The Chinese and Indian experience can perhaps be explained by low wages as the dominant business factor. The least “developed” of these countries often have reputations for producing low cost copies of products – arguing that business innovation is hampered by a dominant mono-culture. If business innovation is defined to include manufacturing and logistics processes, this hypothesis seems weak even in the case of China an Korea.

It also seems worth examining if two billion people really do think so commonly that they cannot in practice be effectively innovative.

One of the least controversial assertions in this area of study is that a business workforce should understand their customers, and that looking like them is a tool to achieve this. As an example, building and shipping products with buttons that are too large to be comfortable for a demographic with small hands seems to reinforce both the dangers of an inward looking, not curious workforce and one with overly common physical traits. Introducing employees with smaller hands to the design team seems to be an effective cure to this problem and we should expect a positive return on investment.

Examples of obvious misses like this make the business case for structurally discouraging admission/hiring and promotion of white males almost self-evident. It is less self-evident what the ROI of diversity programs is in businesses that design and manufacture wheel bearings, sewer pumping systems, aircraft engines or supply chain logistics. It is possible that creatively can be unlocked in cases where product designs depends less on understanding human physical, psychological or behavioral trends by pursuing diversity on axis beyond the current gender and selected races. It may be worth considering that the current diversity initiatives have only uncovered a fraction of the power of programs like these.

One wonders what the adjusting the relative percentages of Christians, Hindus and Muslims, or the musically gifted, in a workforce might have on innovation and customer friendly products.

One thing that makes the study of diversity difficult is that while the programs may have a positive return on investment, they may not be the dominant variable in a system.

In the event this is true, focus on more significant variables may be merited from a purely ROI perspective.

Mike.

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Cloud Economics

A company that owns or leases datacenter space pays an annual hardware cost, per server, that consists of depreciation + [ power, space and cooling ]. Depreciation is the purchase price of the hardware divided by the accounting dept’s view on how many years that machine will be useful.

A server price of $6000, depreciated over 3 years for a $2000 cost per year, and power, space and cooling at 40% of that, $800/year, would not be atypical for many workloads.

The fundamental economic assumption at this layer by infrastructure cloud providers is that economy of scale can reduce these numbers, and these savings can be shared with customers. Large cloud providers buying identical servers in bulk can negotiate better rates, and large blocks of server conformity in size, power, setup, etc. leads to more efficiency that extends to power, space, cooling and networking costs. Even customized hardware (i.e. render farms, crypto) benefits from scale.

All things being equal, customers should assume a large, well run cloud infrastructure provider will be less expensive than buying and running servers themselves, on per server basis.

Per server rates are often not the largest cost consideration. Many workloads have seasonal (or daily, weekly, etc.) cycles in total workloads that can vary by as much as 10X. Underbuying for the peaks has the cost that the system simply isn’t available for at least some set of customers. Overbuying avoids lost business due to bad capacity planning, but at scale can result in the large expense of unused servers.

In the total cost equation, overbuying is often the dominant variable.

The elasticity of cloud as infrastructure, assuming your application can benefit from it, is where the potential for real savings and higher availability are. Consumption billing allows this savings to be realized at a fine level of granularity. You pay for only the resources you use (at the expense of more complex budgeting).

In the roughly 25 year client/server wave of computing, Microsoft and Oracle were large suppliers of technology largely due to SQL and Exchange. Storage systems are immensely complex and difficult to replicate. At the beginning of the wave, Oracle provided scale and power, at high cost. Microsoft’s initial position was value, at more limited scale. But as time progressed both systems provided scale and value. Application developers, almost without exception, chose one of those two SQL systems as the core of their application. For the reason that they were immensely powerful, economical, and getting better in both dimensions with time as the personal computer continued to bend the cost curve down.

It’s worth noting that during this wave, SAP established itself as a critical application in most large companies.

In the current wave, storage technology has migrated from two providers of SQL to many providers in form of open source.

Neither of the two largest cloud vendors has yet been able to establish a high value-add (and high margin), critical and broadly accepted application technology. Both companies offer a combination of proprietary storage technology, and hosting popular open source systems “as a service”, at higher value and margin than hosting them yourself on IaaS. Google is banking on their proprietary  storage, app model and AI technology.

To re-establish the last-wave margins and customer loyalty (and lock), it is critical that cloud providers move up the technology value-chain.

Both Salesforce and Office 365 blur the lines between applications and platforms. Both are examples of high value cloud wave offerings. SAP is working on the same formula, as is everyone with an on-premise ERP, CRM and/or CPQ system.

A large unfilled need for most large companies remains help with their significant footprint of “legacy” (i.e. the ones working today) system. Migrating applications that require significant human investment (i.e. DBAs) to keep them running, and were not designed to scale-up, to the cloud does not make them cheaper to run, or magically elastic. This is likely the largest class of applications in use today.

It’s possible that in this wave the “top” of the technology stack is not components that make application development easier, but completely finished solutions. The next 25 years might be a shakeout of the best 2 or 3 applications in each of many hundreds of verticals. Each with its own extensibility story. The winners and losers in such a model are not obvious, at least to me.

Mike.

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25 Years. Thank You.

From: Mike Zintel
Date: Monday, July 15, 2019
Subject: 25 Years …

[ edited to remove personal and confidential info, trim most incomprehensible ramblings and eliminate the proper noun Cthulhu ]

Is Microsoft a good company?

(tl;dr: it is)

In my youth, the thought of working for Corporate America invoked Kafkaesque imagery. I dreamed of a life of original and authentic experience, not serving the man. What I didn’t get at the time is that these things required more than dreams. They required confidence, knowledge, maturity. And money. I was surprised to learn how expensive original and authentic experience was, unless that experience was being uncomfortable and afraid.

In America first you get the job. Then you get the money. Then you get the original and authentic experience.

Corporate America is where the jobs were.

My first job was writing accounting software, at a company in Dartmouth, Nova Scotia. 6 of us designed, wrote, debugged, documented, sold, installed, and supported a substantially complete multi-user package including point-of-sale.

Over the years I forgot how hard it was. When Terry asked for iTunes+Amazon in 24 months, at Windows scale, backwardly compatible with everything ever: Sure. How hard could that be.

Now we know: Devilishly hard, in ways I didn’t expect. But not impossible. And well worth it.

The meme these days is that we are a good working to become a better company. The largely unspoken implication is that we weren’t. There’s truth to this. But it’s an over-simplification. In the late 1990s, I was making concrete plans to exit not just this company but the industry. I was working for and with a handful of difficult  people. Fortunately, the stock market crashed, and I decided that a paycheck would be handy at least until I figured things out. I’ve been figuring since then.

I changed jobs within the company, and encountered some of the finest people I had ever worked with. For the next 20 years I have been fortunate to work for and with many hard-working, intelligent, creative, honorable people. Good people.

Back then we had a sense that something profound was happening, and while we were well positioned to contribute to it, success was far from assured. Indeed, it was often a long shot. It’s hard to really appreciate how bold Bill and Steve were – bold in vision and bold in follow-through. Microsoft brought a global scale and economy to the industry the world had not seen before.

The ethos at the company then was that there was huge opportunity here, but you were expected to work for it. You had to be talented, a hard worker, adaptable, and tough. Managers, candidates and employees generally understood this.

The work ethic, and the leadership’s stamina was critical to success. You simply couldn’t build a company like Microsoft (or Intel, Oracle, Amazon, etc.) without it. We often stumbled and fell short, but we stood up, dusted off, and dove in for another release.

But it was rough and tumble.

Most leaders thought they were doing what was necessary to succeed. And there was a lot of money to be made and lost quickly. This is a climate where values are tested. I learned a lot about people, good and bad. I didn’t like everything I saw in others and myself, and made some changes. Even the difficult times helped me grow as a person, and later to be a more effective manager and, later still, a leader.

Microsoft was early adopter of profit sharing at a broad scale. The goal was to succeed together.

At Microsoft, I met many people of different backgrounds and life experience. And people were open, and curious. And generally respectful.

Microsoft took chances on people without regard to their education, country of origin, or any other factor beyond their ability and willingness to work hard and write good code.

IBM or Kodak would not have hired me when Microsoft did. I was not credentialed or polished.

Regardless of how good or bad we were in Redmond, one thing that is true is that we changed the world. For the better.

In my lifetime, I’ve seen truly mind blowing improvements in many things: material science, health care, manufacturing, energy, shipping and supply chain logistics, entertainment, communication and more. Cars, motorcycles, boats and planes are safer, more reliable, more comfortable and more fun. Travel to remote destinations is a delight. Libraries, monthly magazines and a set of Encyclopedia Britannica are no longer the only source of information to most people.

Cheap, compatible and approachable computing and networking are the underpinning of all of this innovation. And Microsoft and Intel and others made this possible at global scale.

It is good. Very good indeed.

Some folks know that I’ve been thinking about retiring for several years now.

I thought this might be a hard transition. It is.

On one hand, I love building deep, powerful systems that scale and last a long time. We’re building one right now. We have the right team, the right strategy and the right system. And we’re not done. I love sharing what I’ve learned about how to do this, and I love learning from you about how to do this.

But I really did start my career as a photographer, and I never really gave up on that.

I’m at the point in life where I’m starting to think about time as being a scarce and precious thing. A thing you have to use increasingly wisely. I think my family would give me an OK, mostly for being there, and mentally present so far. But as I get older I find myself not thinking I wish I had spent less time with my loved ones so I could have worked more.

It’s going to be a bit hard not being the “boss”.  Anyone who tells you that being the boss does not come with considerable advantages is not being truthful. On the flip side, it creates a necessary distance between you and others that I understand but dislike. People want to ghostwrite what you write and say, lest you go off message. A handful of people learn to manage you. You being to wonder about these things. It’s easy to lose yourself in the comfort of it all. To lose the edge.

Do not lose the edge. Never stop building wonderful things. Never stop being curious, and never know so much that you cannot learn more.

A few things I’ve learned by building things:

TCP/IP scales well. VPN is useful. Large interoperable networks are unbelievably useful, and are generally achieved with clear, deterministic protocols and one or a few broadly adopted implementations.

Cool, counter-culture fringe projects like IrDA don’t survive in the face of real, problem solving, highly interoperable, widely adopted things like USB.

Bluetooth is too complicated.

uPnP was way ahead of its time and too fringe. Jini was too complicated.

People like gaming. Games are a unique class of apps.

Garbage collected, typesafe languages are useful. But they allow you to write a lot of bad code quickly. With C, it took more time to write bad code.

Quality is a choice. It is also survival.

Windows Live Mesh turned out to be an incubation for talent for the rest of the industry. We should have sold it better.

Admit mistakes quickly and learn from them. Move on.

You don’t get to do the job I have been doing without a few obvious things: talent, hard work, a bit of luck. But what is not obvious is that you don’t get to do it without huge support from many people. Bosses, partners, influencers, mentors, peers, folks in your org. Sometimes this support is visible, and sometimes it’s a willingness to suspend disbelief long enough to prove or disprove and idea.

I help I’ve received is profoundly humbling. And I am grateful.

It’s hard to thank individuals in an email like this because there are so many. But I’ll hit some big ones: David Treadwell was the best manager I’ve ever had. He got me to stop recognizing how brilliant I was and start recognizing that being nice to people would make them more likely to want to work with me. Gregg makes other people successful at scale, and brings a rare humility, decency and sense of humor to the job. Eric always sees the best in people. Chris Jones challenged me, strategically. I think Terry listened to me, and might have even believed me. He generally didn’t act on my suggestions, which I’m told is not a thing to take personally. He also challenged me intellectually. Ray Ozzie is brilliant beyond belief, and extremely fun.

There are, and have been many, many others.

I am going to miss you and I hope some keep in touch.

Thank you.

Very much.

Mike.

http:/www.zintel.net/MeetMike.html

https://vimeo.com/mikezin

A LongMail™, about retirement.

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True Stories

Women in America earn between $0.79 for the exact same work for which men earn $1.00.

It’s interesting to consider what has to be true for this unfairness to exist.

Every business owner/decision maker in America has to choose misogyny over greed.

Any businesses that choose greed/growth/profit/continued and/or expanded employment over misogyny would hire women to do exactly the same jobs as men equally well, drive down costs and increase efficiency.  This is probably the single easiest thing that could be done to increase profitability.

Assuming some semblance of a free market, this approach over time would allow these businesses that choose fairness, growth and profit grow at the expense of those more committed to unfairness.

Businesses that are failing due to labor costs would have to choose layoffs or complete collapse in order to continue to cheat women.

Even women owned business would have to be in on it.

This collusion would have to maintained in secret across decades of bankruptcies, startups, mergers and hostile buyouts, IPOs.

Puzzlin’ Evidence

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The Yellow Spotty Bubber Are Alright, The Boaters Not So Much Maybe

A number of people have expressed interest in the outcome of my conversation with N.S. Power. So I thought I’d keep us all up to date here.

A helpful gentleman by the name of Tim called me from N.S. Power this morning. Tim apparently is responsible for at least lake levels in this system. He was very knowledgeable about the situation.

In one of life’s ironies, our boating fate may in fact be in the hands of the small and rare yellow spotty bubber, which goes by the name “Salmon and Gaspereau”, and has the N.S. Dept. of the Environment as their representative.

If I understand what was explained (errors likely mine):

N.S. Power is constrained from letting water into the lake post sometime in June until Aug 15th, for reasons related to fish migration. These kinds of decisions get negotiated at the time of “relicensing” which was 2009 and will be again in 2019.

It’s interesting that my manufactured graph shows this. Indeed my memory is of a sharp drop in summer levels the mid-2000s. Around “re-licensing” time.

Tim’s explanation was so helpful that it took me a couple of hours to wonder why I didn’t ask if they could just add extra water in June so that by Aug 15th my boat wasn’t being ground to dust on the granite bottom and the spotty bubbers too would be happy.

There’s lots of room for water in the lake. The only explanations for the design of this wharf is that 1) either water levels used to be much higher, or 2) someone is a kooky builder.

Who Builds a Wharf Like This

Who Builds a Wharf Like This

The water levels used to be much higher.

Much higher.

Could you add more water to the lake in Jun please?

Thanks.

Mike.

 

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An Open Letter to Nova Scotia Power

I apologize for communicating with you via blog but I don’t know who to talk to about my problem.

I am a 25+ year resident of Little River Lake, the smallest lake of the Gaspereau River system of power generating lakes in King County Nova Scotia.

Please put some more water in the lake.

The folks on this lake are not a complaining bunch. We get that levels change. We even get that levels are sometimes low for a season. We have docks that accommodate level change.

We were excited this year, confident that record snowfall would mean good summer boating, fishing, etc.

But you’ve been dropping the summer lake level year over year and an abundance of water, apparently, wasn’t about to interfere with that.

The rocks tell the story:

Where Is The Water Guys

Where Is The Water Guys

Even your own gear tells the story. Clearly the folks who designed this expected the water to be somewhere on the gauge:

Not Where It Was

Not Where It Was

But you know this:

No Joy

No Joy

I’d like to argue that my real concern is for the welfare of the small and rare yellow spotty bubber, that breeds only in the sand on the shoreline of small manmade lakes in the Gaspereau system.

But I really don’t know anything about these things.

What I know is that my boat is sitting on the granite bottom being ground to dust in the wind off the same wharf we’ve been using for 3 decades.

I’d be happy to take you for a boat ride here in 10 cm of water if you wanted to get a first-hand feel for it.

But you’re all likely busy.

In the same spirit of Ansel Adams using photography to show people the beauty and value of preserving Yosemite Valley, I’ve made a short film about boating on Little River Lake. I hope you enjoy it.

 

Another 10 cm and you’ll have to rename Little River Lake to Little River River.

Mike.

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Canada: Better Outcomes for Less Money

We’ve heard this many times. And not by accident. Growing up in Canada it was basically the Pledge of Allegiance.

So why does this happen? http://news.heartland.org/newspaper-article/top-canadian-politician-chooses-us-health-care

Consider what has to be true for the better outcome for less to be true:

Insurance companies in the US, like the Canadian government, decide what procedures they will cover based on a formula. Imagine that Canada has a formula that leaves their customers in better health while spending less money. One has to believe that American insurance companies choose to ignore this formula leaving them with less profit and their customers less healthy because, well, … this is never explained.

And they all do it. They collude to earn less and have less healthy customers.

The comparisons are not exact. Canadians sensibly mooch off of US research, have lower malpractice settlements and various laws constrain coverages. President Obama, in public speeches, explained these outcome differences were a result of the fact that everyone working in heathcare except for government bureaucrats has a greedy black heart. The money certainly isn’t going into insurance company profits.

The general message you are supposed to take away from outcome studies is that government is more efficient at managing health care.

Except for Medicare, Medicaid and the VA. These are not often cited as examples of legendary government efficiency.

It is easy to manipulate outcome studies (and outcomes). It isn’t even really manipulation. Payers have to decide how to allocate finite resources. Since the vast majority of money is spent at the end of life care and in hard to treat diseases, the easiest way to have treatments available for larger numbers of people – with better “outcomes” (for those people) – is to limit treatment of the expensive cases. Which is exactly what is done. There’s a good argument at least in the abstract that this is a rational and compassionate choice. To make this appear better in studies, simply choose outcome goals outside of the areas where funding is cut. As a concrete example, taking premature infants off of life support and not counting them against infant mortality gives better outcome for less.

America spends more for better outcomes. The current spending level is unsustainable, and more rationing is in your future. Perhaps the government will be better at rationing.

What won’t be true is that you get American outcomes for Canadian prices.

Mike.

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