Nagesh Belludi

A Real Lesson from the Downfall of Theranos: Silo Mentality

February 4, 2021 By Nagesh Belludi Leave a Comment

The extraordinary rise and fall of Theranos, Silicon Valley’s biggest fraud, makes an excellent case study on what happens when teams don’t loop each other in.

Theranos’ blood-testing device never worked as glorified by its founder and CEO, Elizabeth Holmes. She created an illusion that became one of the greatest start-up stories. She kept her contraption’s malfunctions and her company’s problems shockingly well hidden—even from her distinguished board of directors.

At the core of Holmes’s sham was how she controlled the company’s flow of information

Holmes and her associate (and then-lover) Sunny Balwani operated a culture of fear and intimidation at Theranos. They went to such lengths as hiring superstar lawyers to intimidate and silence employees and anyone else who dared to challenge their methods or expose their devices’ deficiencies.

Holmes had the charade going for so long by keeping a tight rein on who talked to whom. She controlled the flow of information within the company. Not only that, she swiftly fired people who dared to question her approach. She also forcefully imposed non-disclosure agreements even for those exiting the company.

In other words, Holmes went to incredible lengths to create and maintain a silo mentality in her startup. Her intention was to wield much power, prevent employees from talking to each other, and perpetuate her deceit.

A recipe for disaster at Theranos: Silo mentality and intimidation approach

Wall Street Journal investigative reporter John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018; my summary) is full of stories of how Holmes went out of her way to restrain employees from conferring about what they were working on. Even if they worked on the same project, Holmes made siloed functional teams report to her directly. She would edit progress reports before redirecting problems to other team heads.

Consider designer Ed Ku’s mechatronics team responsible for designing all the intricate mechanisms that control the measured flow of biochemical fluids. Some of his team’s widgets were overheating, impinging on one another and cross-contaminating the clinical fluids. Holmes wouldn’t allow Ku and his team to talk to the teams that improved the biochemical processes.

Silo mentality can become very problematic when communication channels become too constricted and organizational processes too bureaucratic. Creativity gets stifled, collaboration limited, mistakes—misdeeds in the case of Theranos—suppressed, and collective objectives misaligned.

Idea for Impact: Functional silos make organizations slow, bureaucratic, and complicated

Innovation hinges increasingly on interdisciplinary cooperation. Examine if your leadership attitude or culture is unintentionally contributing to insufficient accountability, inadequate information-sharing, and limited collaboration between departments—especially on enterprise-wide initiatives.

Negotiating Without Giving In

February 1, 2021 By Nagesh Belludi Leave a Comment

Getting to Yes: Negotiating an Agreement Without Giving In (1981) by Roger Fisher et al. is a best-selling manual used in everything from marriage counseling to international negotiations.

Citing examples of all sorts of conflicts, the authors build the case that there’s a far greater chance of agreeable resolutions when parties aren’t bogged down in intractable positions. The tome helps highlight how the commerce of relationships is rarely ever simple and hardly ever so fair.

Behind opposed positions lie shared and compatible interests, as well as conflicting ones. We tend to assume that because the other side’s positions are opposed to ours, their interests must also be opposed. If we have an interest in defending ourselves, then they must want to attack us. If we have an interest in minimizing the rent, then their interest must be to maximize it. In many negotiations, however, a close examination of the underlying interests will reveal the existence of many more interests that are shared or compatible than ones that are opposed.

The book has its roots in the Harvard Negotiation Project. This interdisciplinary consortium started when Harvard realized that students from such faculties as law and business were ill-equipped to tackle conflicts effectively.

Negotiation Need Not Be a Zero-Sum Game

At its core, Getting to Yes focuses on what the authors call “principled negotiation”—it’s emphasizing what’s essential to you and why. In contrast, “position negotiation” is merely making demands and offering concessions until a compromise is reached. When you clarify why something is important to you and heed why things are essential to the other party, myriad solutions in your interests and theirs present themselves.

In traditional position-versus-position bargaining, the other must lose if you have to win and vice versa. With principled negotiation, you cultivate a supportive approach, “work side by side, and attack the problem, not each other.” Rather than stake out unwavering positions, you explore all possible “options for mutual gain” and present the other side with “yesable” propositions.

Separate the People from the Problem

To focus on underlying interests, the parties should try to get inside each other’s heads and consider the emotions involved—the desire for security or a fear of losing status, for example. “The ability to see the situation as the other side sees it, as difficult as that may be, is one of the most important skills a negotiator can possess.”

An illustrative anecdote cites President Nasser of Egypt being interviewed in 1970. His negotiating position was that Israel must pull its troops out “from every inch of Arab territory,” with no Arab obligation in return. The interviewer switches from positions to interests by prompting Nasser to consider what would happen to Prime Minister Golda Meir if she went on Israeli TV to reveal such a capitulation. Nasser bursts out laughing: “Oh, would she have trouble at home!” His compassion for Meir’s public perception transcends one of the most intractable geopolitical crises of our times.

Recommendation: The Best Little Book on Win-Win Negotiations

Must-read Getting to Yes (1981; reissued 2011.) It’ll change your general conception of negotiation by showing you how to benefit by seeing the world in terms of mutually beneficial transactions. This simple-but-practical guide to negotiations is full of useful tips on negotiating effectively without giving in or jeopardizing your relationship with the other party.

Any method of negotiation may be fairly judged by three criteria: It should produce a wise agreement if agreement is possible. It should be efficient. And it should improve or at least not damage the relationship between the parties.

Some of the book’s techniques seem naive, and the authors tend to oversimplify bargaining positions. Moreover, not all conflicts can be solved as discrete judgment-based conciliations without having one party benefit only at significant cost to the other. Nonetheless, Getting to Yes teaches helpful lessons on understanding oneself and others, compromising, and searching for “win-win-win” solutions.

Idea for Impact: To persuade, focus on fairness and mutual interest, not on insisting on bargaining positions and winning the contest of will.

Inspirational Quotations #878

January 31, 2021 By Nagesh Belludi

Sympathy is two hearts tugging at one load.
—Charles Henry Parkhurst (American Clergyman)

‘Tis better to have loved and lost than never to have loved at all.
—Alfred, Lord Tennyson (British Poet)

What is conceived well is expressed clearly.
—Nicolas Boileau-Despreaux (French Literary Critic)

An ordinary man can surround himself with two thousand books and thenceforward have at least one place in the world in which it is possible to be happy.
—Augustine Birrell (English Politician, Essayist)

Waiting with hope is very difficult, but true patience is expressed when we must even wait for hope. I will have reached the point of greatest strength once I have learned to wait for hope.
—George Matheson (Scottish Theologian)

Flattery is like chewing gum. Enjoy it but don’t swallow it.
—Hank Ketcham (American Cartoonist)

The most worthwhile form of education is the kind that puts the educator inside you, as it were, so that the appetite for learning persists long after the external pressure for grades and degrees has vanished. Otherwise you are not educated; you are merely trained.
—Sydney J. Harris (American Essayist, Drama Critic)

Say not that this or that thing came to thwart you; it only came to test you.
—Muriel Strode (American Author, Businesswoman)

A specialist is someone who does everything else worse.
—Ruggiero Ricci (American Violinist)

Three outstanding qualities make for success: judgement, industry, health. And the greatest of these is judgement.
—Max Aitken, 1st Baron Beaverbrook (British Politician, Journalist)

The life of the creative man is lead, directed and controlled by boredom. Avoiding boredom is one of our most important purposes.
—Saul Steinberg (American Cartoonist)

I think we have to own the fears that we have of each other, and then, in some practical way, some daily way, figure out how to see people differently than the way we were brought up to.
—Alice Walker (American Novelist, Activist)

The superior man is aware of Righteousness, the inferior man is aware of advantage.
—Confucius (Chinese Philosopher)

To insist on purity is to baptize instinct, to humanize art, and to deify personality.
—Guillaume Apollinaire (Italian-born French Poet)

I would feel more optimistic about a bright future for man if he spent less time proving that he can outwit Nature and more time tasting her sweetness and respecting her seniority.
—E. B. White (American Essayist, Humorist)

It’s the willing horse they saddle the most.
—Jamaican Proverb

As insanity in a higher sense, is the beginning of all wisdom, so is schizophrenia the beginning of all art, all fantasy.
—Hermann Hesse (Swiss Novelist, Poet)

The #1 Clue to Disruptive Business Opportunity

January 28, 2021 By Nagesh Belludi Leave a Comment

When most folks encounter a problem, an inconvenience, or an unpleasant situation, they’ll assume these problems are “facts of life” and go on with their lives. At the most, they may even lament about it to others.

Not attentive entrepreneurs. They tend to identify problems and construe them as opportunities.

Serial entrepreneur Miki Agrawal tells the story of how she started WILD, New York City’s first gluten-free pizzeria, after becoming increasingly intolerant to processed foods:

It all started in 2005 when I started having recurring stomachaches. I realized I was intolerant to all of the additives, hormones, and pesticides that were being put in American mass-produced food. At the time, I had given up my favorite comfort food, pizza. In 2006, I opened WILD in New York City to offer people the best version of a pizza: made with organic, gluten-free flours & tomato sauces, and hormone-free cheeses & meats.

During that time, everyone thought “gluten-free,” “farm-to-table,” and “organic” meant “must taste like cardboard,” so it took a lot of education to get people to “get” it.

Embedded in Agrawal’s narrative is a great entrepreneurial thought lesson: You, too, can become better at recognizing unrevealed opportunities by learning to spot the subtle clues all around. The key question to ask is, “This product should already exist, why doesn’t it?”

Learn to Spot Hidden Business Opportunities

Besides WILD, Agrawal has applied the same ingenuity to found two other successsful businesses called THINX underwear and TUSHY bidet accessories.

Answer the following questions to check if some problem you’re aware of serves as a business idea worth exploring:

What’s appalling in your personal or professional world?
Is this thing so terrible that you want to do something about it?
Does this bother any person but you just as much?
Your proposed solution should already exist, but why doesn’t it?
Could this solution be worth something for others who are dealing with similar problems?

Idea for Impact: “Fix-What-Sucks” Business Opportunities are Everywhere

All you have to do is look around your own life and find something that has been broken, and then fix it. Extend and expand. The world is always seeking better, faster, cheaper, and smarter ways to solve its problems.

How Can You Contribute?

January 25, 2021 By Nagesh Belludi Leave a Comment

The celebrated management guru Peter Drucker urged folks to replace the pursuit of success with the pursuit of contribution. To him, the existential question was not, “How can I achieve what’s been asked of me?” but “What can I contribute?”

Drucker wrote in his bestselling The Effective Executive (1967; my summary,)

The great majority of executives tend to focus downward. They are occupied with efforts rather than with results. They worry over what the organization and their superiors “owe” them and should do for them. And they are conscious above all of the authority they “should have.” As a result, they render themselves ineffectual. The effective executive focuses on contribution. He looks up from his work and outward toward goals. He asks: “What can I contribute that will significantly affect the performance and the results of the institution I serve?” His stress is on responsibility.

The focus on contribution is the key to effectiveness: in a person’s own work—its content, its level, its standards, and its impacts; in his relations with others—his superiors, his associates, his subordinates; in his use of the tools of the executive such as meetings or reports. The focus on contribution turns the executive’s attention away from his own specialty, his own narrow skills, his own department, and toward the performance of the whole. It turns his attention to the outside, the only place where there are results.

Peter Drucker: Focus on Contribution - How Can You Contribute? Focusing on contribution versus (or as well as) typical metrics of success pivots you away from self-focus and helps engage in meaningful relationships with your employees, peers, and managers.

In his celebrated article on “Managing Oneself” in the January 2005 issue of Harvard Business Review, Drucker clarified,

Throughout history, the great majority of people never had to ask the question, What should I contribute? They were told what to contribute, and their tasks were dictated either by the work itself—as it was for the peasant or artisan—or by a master or a mistress—as it was for domestic servants.

There is no return to the old answer of doing what you are told or assigned to do. Knowledge workers in particular have to learn to ask a question that has not been asked before: What should my contribution be? To answer it, they must address three distinct elements: What does the situation require? Given my strengths, my way of performing, and my values, how can I make the greatest contribution to what needs to be done? And finally, What results have to be achieved to make a difference?

Idea for Impact: Take Responsibility for Your Contribution

Focusing on contribution instead of efforts is empowering because it compels you to think through the results you need to deliver to make a difference and identify new skills to develop. “People in general, and knowledge workers in particular, grow according to the demands they make on themselves,” as Drucker remarked in The Effective Executive.

Inspirational Quotations #877

January 24, 2021 By Nagesh Belludi

I would like to see a state of society in which every man and woman preferred the old Scottish Sunday to the modern French one. We should then find solid and eternal foundations of character and self-command.
—Ramsay MacDonald (British Head of State)

The advantage of taking an instant dislike to somebody is that it saves time.
—Spike Milligan (Irish Humorist)

Creative minds have always been known to survive any kind of bad training.
—Anna Freud (Austrian-British Psychoanalyst)

Americans will listen, but they do not care to read. War and Peace must wait for the leisure of retirement, which never really comes: meanwhile it helps to furnish the living room. Blockbusting fiction is bought as furniture. Unread, it maintains its value. Read, it looks like money wasted. Cunningly, Americans know that books contain a person, and they want the person, not the book.
—Anthony Burgess (English Novelist, Critic)

If you have formed the habit of checking on every new diet that comes along, you will find that, mercifully, they all blur together, leaving you with only one definite piece of information: french-fried potatoes are out.
—Jean Kerr (Irish-American Writer)

What was the duty of the teacher if not to inspire?
—Bharati Mukherjee (Indian-American Novelist)

Only when one has lost all curiosity about the future has one reached the age to write an autobiography.
—Evelyn Waugh (British Novelist, Satirist)

The bird that would soar above the plain of tradition and prejudice must have strong wings.
—Kate Chopin (American Novelist, Short-Story Writer)

My way of learning is to heave a wild and unpredictable monkey-wrench into the machinery.
—Dashiell Hammett (American Crime Writer)

Capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.
—Joseph Schumpeter (Austrian-American Economist)

All beings desire happiness; therefore to all extend your benevolence.
—Mahavamsa (Sri Lankan Narrative History)

Only mediocrity can be trusted to be always at its best.
—Max Beerbohm (British Humorist)

Good lies need a leavening of truth to make them palatable.
—William McIlvanney (Scottish Novelist, Poet)

The very essence of leadership is [that] you have a vision. It’s got to be a vision you articulate clearly and forcefully on every occasion. You can’t blow an uncertain trumpet.
—Theodore Hesburgh (American Catholic Educator)

Anyone who moved through those years [of the Second World War] without understanding that man produces evil as a bee produces honey, must have been blind or wrong in the head.
—William Golding (English Novelist)

Why People Get Happier as They Age

January 23, 2021 By Nagesh Belludi 1 Comment

Studies have pointed out that most people get happier as they grow older. In fact, across any cultural, economic, and social spectrum, the most content cohort tends to be seniors.

Older people find happiness in “ordinary” things.

Older people start taking stock of their blessings. They’ve concluded that life is short. Amid the anxieties about ill health, income and savings, changes in social status, and bereavements, they tend to make the best of the time they have left.

People in later life learn to avoid situations that make them feel sad or stressed. They have relationships that are more meaningful. They’ve also had more time to learn and read others’ intentions, which helps them avoid stressful situations and develop better solutions to conflict. They’re less likely to experience persistent negative moods.

In short, older people have a better sense of perspective on life, and they take things in stride. Moreover, they’re better able to control their emotions.

Idea for Impact: Don’t wait until later life for a positive experience.

If there’s one thing the older folks can show us best, happiness is a function of expectations. Older people adjust their expectations of life. They have lower aspirations, and they learn to find satisfaction in tiny triumphs.

What elements of that mindset could you integrate into your life now? Could you live more in the present tense, not grasping at some future happiness jackpot?

Five Rules for Leadership Success // Summary of Dave Ulrich’s ‘The Leadership Code’

January 22, 2021 By Nagesh Belludi Leave a Comment

The key to success in any discipline is to figure out the few things that must be done really well and to get those basics right. But so many leaders fail on the fundamentals—and don’t even realize it.

The real implication of leadership has been buried deep over the years: leadership isn’t about the position but about who you are and the responsibility you can undertake. Leadership consultants Dave Ulrich, Norm Smallwood, and Kate Sweetman’s The Leadership Code: Five Rules to Lead By (2009) argues that everything you ever need to know about leadership comes down to five straightforward rules.

If you understand these rules and put them into practice, you can’t fail to spur others and enrich teams, organizations, or communities.

Rule 1: Be A Strategist. Deliberate leaders answer the question “Where are we going?” and mull over multiple time frames. They institute a great enough sense of urgency and remove impediments to the new vision. They anticipate the future and work with others to determine how to advance from the present to the desired future. Shape the future.

Rule 2: Be an Executor. The “executor” aspect of leadership focuses on the question, “How will we make sure we get to where we are going?” Effective leaders understand how to make change happen, assign accountability, assess plans, coordinate efforts, and share information that should be incorporated into strategies. Make things happen.

Rule 3: Be a Talent Manager. Leaders who engage talent now answer the question, “Who goes with us on our business journey?” They select the right people for the right job and ensure that people have the right tools and autonomy to succeed. Leaders foster an inviting organization, create a high level of performance and passion, and continuously monitor problems that need to be fixed. Engage today’s talent.

Rule 4: Be a Human Capital Developer. Leaders who are talent developers answer the question, “Who stays and sustains the organization for the next generation?” Leaders take the time to become aware of how future trends could affect their organizations. They position their teams to win by bearing in mind the longer-term competencies required for future strategic success. Build the next generation.

Rule 5: Be Proficient. Leadership demands are more daunting than ever, and the pressure to perform is relentless. Create regular timeouts to review where you invest your time and energy to ensure that you remain capable of self-managing your personal strengths and weaknesses and generating new behaviors to deal with new challenges. Invest in yourself.

As with most “rules-for-success” books, the authors tout their assessment of “hundreds of studies, frameworks, and tools.” But their work is no more than a distillation of notable leadership thinkers’ experiences. Nonetheless, the rules sound right. The five rules are simple, but they aren’t easy. They are sensible and practicable. They’re what you can focus your effort on for maximum return.

Recommendation: Quick read The Leadership Code. It makes a great early book choice for new leaders. It provides a grounded approach to the fundamentals.

Never underestimate the power of key leadership principles that can be well executed. Complement The Leadership Code with Peter Drucker’s The Practice of Management (1954; my summary) and Julie Zhuo’s The Making of a Manager (2019; my summary.)

How to Banish Your Inner Perfectionist

January 21, 2021 By Nagesh Belludi Leave a Comment

You have an enemy: a feisty, malign force working against you. It’s the internalized perfectionist. It’s the stream of subversive self-talk urging indecision, doubt, and fear.

The #1 hack to overcoming you perfectionist tendency is to accept that whatever you need to work on just needs to be an outline, first attempt, rough copy, version 0. It needn’t be perfect. You just need to get it to a little bit better shape than before. You can then consider the next baby step.

Idea for Impact: Many things in your life need not be done perfectly. They’re to be done … just done … done to spur more done … not to dwell to perfection.

Your goal now is not to be like a Picasso, Mozart, Steven King, Lebron James, Warren Buffett, or some superstar. All you have to do now is create, edit, fix, or process and get whatever it is you’re working on to the next milestone. Make this a rule.

Tribalism Needs to Self-Destruct

January 20, 2021 By Nagesh Belludi Leave a Comment

Big Tech’s recent rush to repress provocative content has expanded the debate on free speech and the social-media algorithms’raw power to preside over how people see the world.

Democracy and free markets aren’t supposed to function this way. Overall, capitalism works because it typically rewards players for being right and penalizes players for being wrong. If you’re an investor and you’re wide of the mark about something, the market will penalize you.

That used to be valid with journalism too. Traditionally, if a mainstream news outlet got something wrong, it’d face disapproval, retractions, and embarrassment. If the outlet was wrong often enough, its circulation would shrink, and advertisers would drop.

Sadly, this feedback loop has gone. Our media consumption has become so segmented and tribal. For instance, Fox News could assert whatever it wants its audience to believe, and the market won’t punish it. Indeed, Fox News could even be rewarded with more significant viewership.

Tribal media consumption is especially manifest with social media because the platforms’business model is driven by tribe-segmentation, engagement, and clicks. Social media reward fanaticism, emotionalism, and hyperbole. There’s no natural self-regulating market apparatus any longer.

All told, tribalism and hyperpolarized filter bubbles have taken their toll. They’re contributing to society’s intellectual decay.

Idea for Impact: This isn’t as much a freedom-of-speech issue as it is a distribution issue. Yes, everyone should be free to express themselves without the interference of editors or other filters. But what does—and doesn’t—surface for consumption needs to be moderated. Gate-keeping must be done in a way that doesn’t devalue truth and ignore the counterevidence. Technology needs to pivot to help society break through the mental barriers of tribes.

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Nagesh Belludi

At the core of Holmes’s sham was how she controlled the company’s flow of information

A recipe for disaster at Theranos: Silo mentality and intimidation approach

Idea for Impact: Functional silos make organizations slow, bureaucratic, and complicated

Wondering what to read next?

Negotiation Need Not Be a Zero-Sum Game

Separate the People from the Problem

Recommendation: The Best Little Book on Win-Win Negotiations

Wondering what to read next?

Learn to Spot Hidden Business Opportunities

Idea for Impact: “Fix-What-Sucks” Business Opportunities are Everywhere

Wondering what to read next?

Idea for Impact: Take Responsibility for Your Contribution

Wondering what to read next?

Older people find happiness in “ordinary” things.

Idea for Impact: Don’t wait until later life for a positive experience.

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?