Category Archives: Hard Things

The problem with “risk / mitigation” sections in business plans

I see a lot of business plans and our team writes a lot of strategy memos.

I’ve always been a little frustrated with “risk / mitigation” sections of these documents, including some I’ve written myself.

“Risk / mitigation” sections feel like an exercise in confirmation bias. They almost always affirm the correctness of the business plan’s thesis.

The logic path of a risk / mitigation section is: “here’s our idea, there are some risks, but here’s why we’re going to do our idea anyway.

This is a modestly useful exercise. It’s worth understanding the risks of a plan and preparing for them. But this type of thinking does not force you to analyze the “crux” of your plan – i.e, what are the major trade-offs you’re making, and under what future conditions could you be proven wrong.

I prefer to see both of these lines of thinking in a business plan: first, a clear identification of the trade-offs in any major decision, and, second, a statement of what might make you change your mind about your plan’s thesis.

Any very hard decision will include difficult trade-offs. And any hard decision might also result in you being wrong. Identifying these ahead of time will help you be mentally prepared to make difficult shifts down the road.

It will also decrease the probability that you drink your own kool aid.  There is a humbling effect in writing down potential future conditions that will indicate that you are near failing or have already failed.

I hope that one day every business plan includes “trade-off” and “we will know we were wrong if” sections.

Doubling down when you’ve been wrong

From 2012 to 2016, three reforms took place in Memphis: the Gates Foundation teacher evaluation reform, the Achievement School District (ASD) charter school turnaround effort, and the district run izone turnaround effort.

In private conversations, I predicted that neither the teacher evaluation nor izone efforts would work. I thought the ASD charter effort work would work. The Arnold Foundation funded research to help us understand if our beliefs about how to help children were correct.

Five years later, the results paint a different picture than my predictions: the teacher evaluation work did not improve achievement. The ASD charters have yet to deliver results. And the izone schools have done the best.

I was wrong about the izone and the ASD.

So what to do now?

The short answer: expand non-profit governance to protect the gains of izone schools, and continue to grow the best non-profit public charters and replace the worst.

The longer answer is below.

Responding to Being Wrong

There are three ways to respond to being wrong: ignore that you were wrong, change your behavior, or admit that you were wrong but double down.

Ignoring that you’re wrong is never good.

Changing your behavior is often the most reasonable response.

Doubling down comes with substantive and reputation risk, but it can be the right thing to do.

Memphis Results 

The teacher evaluation reforms went roughly as I expected, so I won’t discuss that too much here, other than saying that my predictions were based on the belief that execution would hamper implementation in big urban districts, which seems to be exactly what happened.

Here are the results of the izone and ASD charter efforts:

 

 

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The izone had a positive .2 stand deviation effect over five years. This is fairly good impact and it’s great to see these schools helping students.

The ASD schools had no impact.

What I Got Wrong

I made a few mistakes.

First, I underestimated the school district’s strategic and executional competency. In creating the izone, the district successfully recruited a lot of their best educators to their izone schools, and then appointed a talented leader, Sharon Griffith, to oversee these schools. This strategy (concentrating talent) and execution (selecting a great leader) worked in ways I did not expect.

Second, I overestimated the abilities of charter networks to deliver results in the first few years of the turnaround efforts. My assumption was that expert charter leaders would be able to deliver better results pretty quickly, even though they were going into very difficult situations and were often coming from out of town. Unfortunately, a few operators really struggled in the early years, with one of them, Yes College Prep, choosing to not even open up a school (this was a big hit as YES is considered to be one of the best networks in the country).

What I Would Have Done Differently 

I should have realized that great educators in the traditional system could achieve good results if given autonomy in a competitive environment. I have changed my beliefs on this issue based of the work of the izone, the work in Lawrence, Massachusetts, and my lived experience of seeing great teachers and leaders in all types of schools.

Rather than predict the izone wouldn’t work, I should have predicted that the izone might work, but advocated for non-profit governance over the zone so that it could sustain its gains. This remains my worry with the izone: that it will not be able to sustain its impacts over the next 5-10 years due to its governance structure, which makes it vulnerable to political shifts.

I also worry that it can’t really scale. Putting the best educators in the worst school is more of a one time intervention rather than a strategy that can grow over time, and it has some negative effects on the schools that lose their great educators.

Second, I should have realized that early stage charter operators (either newly started or new to Memphis) would struggle to scale through full school turnarounds in a difficult political environment. In hindsight, I should have advocated for more one grade at a time roll outs of newer operators. While this would have been more disruptive to families at the outset, it would have been better for kids over the long run.

What to Do Now

If the above diagnosis is true, it doesn’t really call for a dramatic change in strategy.

Rather, it calls for trying to get non-profit governance over the best district schools, growing the charters that are working, replacing those that aren’t, and starting new non-profit district and charter schools under more favorable conditions.

Getting non-profit governance to the best district educators would (I think) require a change in legislation.

Growing the best charter schools and closing the worst  can be done under current policy.

Evidence to Support Doubling Down

Researchers have found evidence of charter school sectors improving over time. This paper on charters in Texas found significant sector improvements, which led the researchers to write:

The findings suggest the value of taking a longer-term perspective when evaluating the impact of a major educational reform such as the introduction of charter schools, especially when the success of the reform ostensibly depends on parental decisions and market forces.

Additionally, previous research on Memphis charters found strong positive effects:

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These results mirror the results of many other urban charter sectors, which generally find positive effects.

So there is a research based case for predicting that the Memphis charters will improve over the next 5-10 years. We have already seen this with some operators, such as Aspire.

In Sum 

The research has increased my belief that great district school educators, with autonomy and support (and often pressure on local districts from the state to give this autonomy) can really help struggling students.

I still believe that these gains risk backsliding due to political shifts, so I support giving these schools non-profit governance so they can build enduring organizations (both Denver and Indianapolis have mechanisms to give district schools non-profit status).

I also still believe that growing the best charters and closing the worst is one of the best hopes for improving student achievement in Memphis.

So, in many ways, I’m choosing to double down despite being wrong, with the caveat of calling for non-profit governance for more types of public schools.

While this is uncomfortable, I don’t know a better way forward. I think doubling down will help children.

I understand that many of those who I disagree with say “we just need more time.” And I’m making a version of this argument here. So I’ve tried to lay out all my assumptions as clearly as possible, both for the sake of transparency, as well as with the hope that these assumptions can be corrected if they are wrong.

Did a federal grant to turnaround failing schools in New Orleans and Tennessee work?

Back when I worked at New Schools for New Orleans, we applied for a $30m federal grant to turnaround failing schools in New Orleans and scale the model to Tennessee.

CREDO just came out with a research study on our efforts. Their findings, and my analysis, are below.

The New Schools Were Much Better than the Ones They Replaced 

Here’s what CREDO found when they compared the schools we created to the schools we replaced:

In New Orleans, we replaced schools (“closing schools”) that were at 26th percentile in the state with new schools (“CRM schools”) that performed at the ~33rd percentile in the state at the end of the study.

In Tennessee, schools went from the ~17th percentile to the ~23rd percentile by the end of the study.

To quote the CREDO report: “the CRM schools in both New Orleans and Tennessee showed significantly higher academic growth compared to the Closing schools they replaced.”

Translated into days of learning, these are large effects: “Closing school students experience 63 fewer days of learning in reading and 86 fewer days of learning in math when compared to students in non-CRM schools… students in CRM schools make comparable academic growth to non-CRM students.”

The New Schools Performed About the Same as Other Schools in the City

When CREDO compared the new schools to other existing schools (rather than the failing schools they replaced), they found no statistically significant effects:

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In other words, the new schools that replaced the failing schools performed no better or worse than other existing schools in the city.

On one hand, this is disappointing. Our most ambitious targets included having the new schools be amongst the highest performing schools in the city.

On the other hand, this is still a major improvement: the new schools replaced failing schools and ended up achieving at the same level of most other schools in the city.

Building a System that Keeps Getting Better 

Replacing failing schools with new schools is a process, not a one-time intervention.

Ideally, a subset of the schools you created will do really well, and then, overtime, these schools will continue to grow. The ones that don’t do well will not be supported to do additional turnarounds.

Over the long-haul, gradually increasing the number and scale of high-quality school operators is more important than the average effect of the first wave of replacements.

Here’s what CREDO found across the new schools when they compared them to existing schools:

Screen Shot 2018-02-15 at 12.11.36 PM.pngIn New Orleans, 50% of the new schools had positive effects in both Math and Reading. This is really positive: half of our turnaround schools in New Orleans achieved significantly better results than existing schools across the city.

In Tennessee, only one school had positive effects in both Math and Reading, though a few other schools had positive effects in only reading.

This makes me optimistic that the school operator base in New Orleans will continue to have the capacity to replace more failing schools over time.

The early results in Tennessee are a bit more worrying on the operator quality front, and the next few years will be extremely important in ensuring that a healthy operator base emerges.

Lastly: CREDO found that replacing failing schools with fresh start schools (that opened one grade at a time) had a higher success rate than whole school turnarounds. My takeaway here is that you need a mature operator base to do a lot of whole school turnarounds, and no city had enough capacity to really do whole school at scale. In hindsight, we should have done more fresh starts and less whole school turnarounds.

Was the Effort a Success?

At the outset of the project, I remember debating with our research partners at CREDO about how to set-up the evaluation.

I argued that we should ultimately be judged on whether or not the new schools we created were better than the failing schools we replaced.

I didn’t think we should be primarily judged on whether or not the new schools were better than other existing schools that weren’t failing.

Yes, we did include language in the grant application that had goals of schools performing much better than existing schools. And as we executed the project we tried to pick school operators that we thought could deliver top tier results. Our highest aspirations weren’t met. This is disappointing, but it does not mean the project was a failure.

Rather, I consider the project to be a positive step forward in improving public education in these cities.

Making Things Better

The result of the project strikes at the heart of what’s so difficult about education reform: our aspirations for our most at-risk children are incredibly high, but making progress in creating better educational opportunities is very difficult.

In roughly a five year period, we replaced failing schools with new schools that were on average 7 percentile points higher in state performance, which translates to an extra 60-90 days of learning per year.

If the process of opening and replacement continues, what is a modest success right now may eventually become a great success.

I hope that this occurs and that New Orleans continues on its impressive track record of increasing student achievement. As a reminder, the federal grant was just one piece of an overall effort that has radically reduced failing schools in the city:

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How should CEOs handle what society demands?

As I get older, my illusion of control weakens.

This is generally a good thing: the more I acknowledge that I can’t change much of the world, the more focus I have on the few areas where I might actually do some good.

For me, this means less time reading the news and more time on work and personal community.

But even within areas of some control, such as work, there are a lot of limits.

One of those limits is how, as a leader, to deal with what society demands.

Society Makes Demands 

I recently had dinner with No Excuses charter founder, and he was describing how his school’s attempts to implement restorative justice have been a train wreck. After two years of cultural decline, the school is now just getting back to having a culture of high expectations that helps children learn.

I don’t know whether his was because of poor implementation or actual serious flaws in the restorative justice model itself. But I do know that there was a lot of pressure for the school to adopt the restorative justice model.

So let’s put aside the idea of whether or not restorative justice is a good cultural model for a school  – rather, let’s consider the larger question: what should a CEO do when society demands something they disagree with?

In this case, liberal society (from which most No Excuses teachers come from) is increasingly demanding a more progressive school culture, with a lot of young white teachers reacting negatively to having to manage (what feels like to them) overly authoritarian cultures for black children.

For the sake of argument, let’s say you’re the CEO of a charter organization and you disagree with what society is demanding. What should do?

Bend or Stay Firm?

What if you think that restorative justice will lead to a decline in culture that hurts children’s lives? What do you do?

This is a very difficult question.

If you stay firm, you might lose the talent pipelines that had made you so successful in the first place. Or you might lose a communications battle that significantly reduces family demand for you school.

In other words, even if you think what society is demanding is wrong, it might still make sense to bend to society’s demands and just try to mitigate the negative impacts.

In this case, you’re basically trying to ride it out. Society’s demands constantly change – and you just have to hope that this moment in time will pass – and you can course correct in the future.

On the other hand, it might be the case that if you stay firm you will prove society wrong: when everyone else’s results plummet, you’ll be knocking it out of the park.

There are never any easy answers when you disagree with what society demands.

Some Advice 

 

Too often, CEOs make the mistake that society, having made its demand, is now willing to hear the CEO’s response.

By the time society has made its demands, it’s usually not in a contemplative mood.

So here’s some advice:

Consider bending: The best course of action is often to bend to society in a way that keeps your organization afloat and lets you live to fight another day.

Have a values conversation: If you decide this is a place where you really need to make a stand, the default position should be to always engage society in a values conversation, not a strategy conversation. Society doesn’t make demands about operations and strategies, it makes demands about values and tribal affiliations. If you’re going to try and convince society you’re right, you need to win on values.

Make sure your team is with you: If you’re making a values argument, you’ll get clobbered if a bunch of people internal to your organization say that they disagree with your values – or provide reporters with a bunch of examples of how you’ve violated the values you’re now professing to hold.

To the extent I’ve had to push back on society’s demands (keep neighborhood schools, don’t close schools), I’ve always tried to do it in a values based way. And I’ve always tried to surround myself with people who share these values. And, at times, I’ve bended: such as supporting enrollment systems that give a partial neighborhood preference to families… and respecting the demands of people who hold different values than I do.

Does anyone know why Chicago children are getting smarter?

If you just read the headlines, you might suspect that Chicago’s public schools are in a terrible tailspin. Part of this is the noise of big city politics. Part of this stems from cloud of violence that hangs over the city.

But Chicago has improved on academic test scores more than most other cities in the country. Rather than one of the worst, Chicago is one of the best.

A recent report by Sean Reardon and Rebecca Hinze-Pifer found that between 2009 and 2014:

“This [student achievement] growth rate [of Chicago] is higher than 96% of all districts in the US. Among the 100 largest districts in the country, the average growth rate from third to eighth grade is 0.95 grade equivalents per year; Chicago has the highest growth rate between third and eighth grade of any large district in the United States.”

The authors admit that they don’t know why this occurred.

I can’t prove why Chicago kids are getting smarter, but I have a hypothesis.

What’s Been Going on in Chicago Public Schools? 

One way to try and solve the mystery of why Chicago children are getting smarter is to look at the district’s previous major initiatives.

As this report details, between roughy 1990 and 2010 there were three overarching eras of reform in Chicago: the decentralization era, the the accountability era, and the do a lot of things era.

The authors are very careful to not attribute a causal relationship between reform eras and outcomes. The reforms were messy and not rolled out in an experimental manner – so fair enough.

But in this post I’ll try and make my best guess on what was causal and what was not.

The Decentralization Era

The decentralization era was best known for the creation of Local School Councils. This reform gave local councils real control over decisions about how schools were run. The councils were made up of school leadership, parents, and community members.

The councils always seemed like a terrible idea to me. It’s basically taking all we know about charter schools (good central offices, scalable instructional programs, governance matters) and doing the exact opposite!

Not surprisingly, research on the reforms found that the councils had some positive effects on advantage communities, but were least likely to improve schools in low-income communites. Communities with low social capital didn’t gain a lot from ad-hoc and poorly constructed local boards.

I’m very skeptical that the decentralization era and school councils were the root cause of later gains.

The Accountability Era

In 1995 Mayor Daly put in Paul Valls as the superintendent (I later worked with Paul when he was the superintendent of the RSD in Louisiana). Vallas, who did not have deep instructional expertise, used test driven accountability to try and make things better.

New tests, promotional standards, and interventions for failing schools were all put in place.

The reforms had better impacts for low-performing schools; the researchers noted:

“This was the only era to show large improvements in the lowest- achieving schools. However, the patterns in test scores in the lowest-performing schools suggest that some of the improvements resulted from instruction that was aligned specifically to the high stakes tests.”

This matches other research on accountability reforms: you tend to see gains in the lowest preforming schools, but the high stakes can cause narrowing of the curriculum.

 

The Do a Lot of Things Era

Arne Duncan came in after Vallas, and he instituted a lot of reforms.

Arne launched 100 new schools, implemented internal district instructional and curricular reforms, overhauled school leadership pipelines, and placed a deep focus on on-time high school progression.

Perhaps the biggest initiative of this era was the Renaissance 2010 project, which launched about a 100 new district, charter, and contract schools between 2005 and 2010.

Unfortunately, no one has conducted a full evaluation of the program. Someone should do this!

Two interim research reports came out around 2010. One study, which only included a few years of data from the early Renaissance cohorts, found that the new schools performed about the same as the existing district schools. The other study was inconclusive.

Not much help from the research community.

A lot of work was also done on school leadership. The Chicago Public Education Fund, in partnership with the district, invested heavily in school leader development, placing bets on both district based and non-profit providers.

The lastest research I could find on these programs found that “results indicate that one-year learning gains in elementary and high schools led by Fund-supported principals were not different than those in other similar schools.”

Another major reform, another mediocre result.

All told, researchers found that this era produced more gains in high school than elementary schools, but wrote: “while the effects of the dominant policies of Eras 1 and 2 are largely understood, much research remains to be done to understand both the positive and problematic effects of the policies in Era 3.”

Not super helpful, especially since this is the era that preceded the large gains in test scores that occurred after 2009.

What About the Charter Sector? 

CREDO published a report on Chicago charters that covered test scores from 2010 to 2012, which is right in the middle of the period where Chicago saw a lot of gains.

The study found +.01 effects in reading and +.03 effects in math. These effects amount to about a month or so of extra learning per year, maybe a bit less. Given Chicago’s relatively small charter market share, and the modest size of these positive effects, it’s unlikely that charters themselves accounted for the 2009-2014 gains.

A more recent study, which just looked at charter high school performance from 2010-2013, found much larger effects: +.2 effects on ACT related tests and much higher college enrollment rates.

These are large effects, but they are for high school only. The study lauding Chicago’s gains only covered grades 3-8.

So WTF Happened in Chicago to Make Kids Smarter?

To summarize: Chicago improved its test scores more than any other big city in the country, and researchers really don’t know why.

So why are Chicago kids getting smarter?

Here’s my guess: competition and accountability lifted all boats.

When you put accountability in place (the Vallas era) and then launch a 100 new schools (the Duncan era) you get a city where school leaders know there are consequences for failure and the best of the new schools begin to raise the bar for what’s possible.

This theory helps explain why the Renaissance schools and charter effects were a bit muted. In the studies on these reforms, researchers compared the new schools to existing schools. So if the existing schools were improving due to increased competition, you would not see large relative effects for the new schools.

I can’t prove that accountability and competition caused the results, but in many sectors accountability and competition make everyone better. It also fits stories we’ve seen elsewhere. In place like Denver and Washington D.C. increased competition led to all boats rising in the public school system.

If you have a better theory, let me know.

What Should Chicago Do Now? 

Here’s another tough question: if it was accountability and competition that caused Chicago’s gains, how should this impact Chicago’s future strategy?

Since 2002 (while the district was getting much better!) Chicago enrollment plummeted from 440,000 students to 370,000 students.

This means that there are lot of under-enrolled schools in the district and the city might have to go through another round of painful closures.

This also it means it’s harder to push the very reform (opening new schools) that might have driven Chicago’s previous gains in achievement.

So what should the city do?

Reasonable people can surely disagree, but I would continue to create new schools, albeit in a different fashion.

First, I’d open new schools in the areas where population is increasing. Chicago is made up of a lot of neighborhoods, and not all neighborhoods are losing children.

Second, I would do some replacement work. Instead of closing all the under-enrolled schools, I’d try and select some neighborhoods where there’s enough child density that you could imagine families coming back to the public schools if there were better options. I’d launch replacement schools in these neighborhoods.

There are clear drawbacks to this strategy. Politically, it’s hard to justify opening schools when you’re in the midst of closures. Programmatically, it’s hard sell to get the operators of new schools to open up in neighbors with shrinking enrollment.

But I think it’s the best thing for children.

Lastly, I might also try and launch some diverse by design schools.

In a city as diverse as Chicago, it’s sad that it’s schools are so segregated.

The Last Word

Chicago’s Chief Education Officer, Janice Jackson, recently gave her take on why things are better.

Her list: pre-k, better professional development, better curriculum, competition from private and charter schools, and clear accountability standards.

In her own words:

“I believe the level of transparency we have provided around what a quality school is has been transformational in this district.”

A thoughtful response from Chris Cerf

Chris Cerf, the current superintendent of Newark and the former state superintendent of New Jersey, posted a thoughtful response to my post on the Newark Harvard study.

A couple of thoughts.

First, I’ve had the opportunity to interact with Chris on and off over the past decade, and I have immense respect for his heart and mind. Kids in New Jersey are better off because of his leadership.

Second, I appreciated the tenor of Chris’ post. A primary reason I write this blog is so that  people in the education reform family can have public disagreements and learn from each other. Chris’ tone and use of data helped me get smarter on Newark.

While there is some cost to this approach (those who oppose our work can try to exploit our disagreements), ultimately, I think the gain of learning through public debate is well worth it.

Over the long haul, our success will have more to do on whether or not we continually delivered great educational opportunities for children than whether or not we win or lose the PR fire of the week. And putting our ideas out there for public testing is a good way to get smarter on how we deliver better opportunities for children.

As for the substance of Chris’ points, you should read the piece for yourself, but I found the below two graphs to be useful.

The first compares Newark’s overall performance to similarly situated districts in New Jersey (DFG A -> the green line). Newark’s relative performance to similarly situated districts has improved greatly over the past seven years.

newark-graph1

The second compares Newark’s traditional school performance to similarly situated districts in New Jersey (DFG A -> the green line). Newark’s traditional school performance was fairly flat until 2014, but has grown rapidly since then.

newark-graph2

I’m not sure that Chris and I disagree on the data story.

Both of us, I think, would say that the early gains in Newark were driven by the open / close / shift strategy.

As for the improve the traditional sector strategy, Chris points to the last few years of growth to demonstrate that the reforms are starting to deliver for all schools – and that now that the foundation has been set, these gains will likely continue.

I emphasized the flat results for the first four years of the district improvement strategy and wondered whether the improve strategy was worth it – or whether putting more resources into the open / close / shift strategy would have laid an even better foundation for long-term gains.

It’s a great question to grapple with.

Lastly, our interpretations of the study go to an even more fundamental question of how we measure success: should a city’s reform efforts be evaluated on the cumulative gains it achieved during the transformation process, or should it be evaluated on the gains being delivered once a city is through a transformation process?

When we partner with a city, our team holds ourselves for cumulative gains over the initial 5-10 years of reform, but perhaps a more important metric is whether a city achieves a new and better equilibrium by the end of the reforms.

Chris has pushed me to think hard about this question, our team will be smarter for it.

Book Review: Ray Dalio’s Principles

dalioo

How to read it

I just finished Ray Dalio’s Principles and found the book to be both uneven and very useful.

Sometimes I’d read a few paragraphs and think “I should probably spend the next decade trying to get that right” and sometimes I’d read 10 pages and think “that’s a long way of saying something that everyone already knows.”

Thanks to Ken Bubp, our team is also digging into the book together, which I hope will make us better.

Already, there are a couple of areas where the book made me want to get much better – a few of those detailed below.

The point of a work conversations is to find the truth

The point of social conversation is not  to find the truth: it’s to build bonds, have fun, and play status games.

These social habits tend to bleed into work conversations and it takes a lot of deliberate effort to create an environment where truth seeking is the paramount goal of a conversation.

Specifically, truth finding conversations require the implementation of two difficult to reconcile mindsets: not holding tight too tight to one’s own opinions + being aggressive enough to pressure test another person’s opinions.

So team members have to constantly toggle between:

you’re a smart person who shares my values so I need to figure out why you think I’m wrong because I might be wrong

and

I think you’re wrong because of X and I will not back down from this opinion for the sake of being agreeable

This is tough to do.

Normalize and embrace emotional and intellectual pain

In social relationships, we tend to avoid pain. Doing so is often bad for the long-term health of social relationships, and it can be devastating in professional settings.

Too often in work:

  1. It is considered harmful to cause someone else intellectual or emotional pain.
  2. The first reaction of feeling pain is often to attack others and build self-promoting narratives.

Both of these are very hard to unwind.

It’s very difficult to create a cultural where it is ok to cause someone the right kind of pain.

And it’s very hard to have the individual fortitude to build an internal monologue that goes like this: “the fact that I’m feeling a lot of pain means this is a prime opportunity for growth.”

With fluff and abuse at the polar ends of the cultural spectrum, getting this right is hard.

Leaders are defenders of the standard 

The standard for thinking and performance starts at the top, and the leadership of an organization must constantly live the standard and hold all others to the standard (this is also the principle of the great book The Score Takes Care of Itself).

It takes a lot of mental stamina to hold the bar: in 1-1 check-ins, in team meetings, in external conversations with partners…

…to never nod your head unless you mean it is flat out exhausting… to always ask the next probing question is annoying…. to say it’s not good enough yet is tiring…

But if you don’t do it you, your team, your organization will slide into mediocrity.

Getting the balance right between people, processes, and technology

Leaders have a finite amount of energy and capital to allocate across people, processes, and technology.

Different organizations, industries, and time periods require different allocations – as well as different types of expenditures.

Dalio goes deep in how he managed these as he grew his hedge fund, early on relying more on technology than most of his peers. While some his efforts are generalizable, many of them are not.

But the discipline by which he came to his approach is generalizable, and it’s something I want to keep working on as our team, technology, and industry evolve.

Application

After our team conversation, we’ll have to figure out how to apply these lessons. In some cases, it might simply be through consciously applying these principles in our conversations; in some cases, we’ll build processes; and perhaps down the road we’ll build out some technology.

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