Blameless Reporting

One of the areas we are studying this Fall in a Case Study for a MBA class is to create a business environment of blameless reporting. A corporate culture of encouraging employees to report anything that goes wrong or seems substandard without fear of reprisal for the act of reporting.

To create an environment of psychological safety and high accountability within a company. Can this work?

Finance is complex, and whenever you have complication and uncertainty, it is a given that things will go wrong at some point. When they do, the best way to deal with those mistakes is to use them to learn and grow. And the only way an organization can be aware of issues while they’re still small-scale is to create an environment in which employees and managers at all levels feel safe voicing their concerns and thoughts.

Companies that foster a culture of blameless problem-solving have the potential to learn from what goes wrong, and also to innovate, through smart experimentation, while companies that habitually blame individuals are in danger of running into large-scale disasters without a hint of impending doom.

Here are some tips for creating a workplace environment in which people feel they can speak up about what’s happening and collectively work hard to improve and avoid big problems:

Promote smart experimentation. Experimentation is how companies innovate and develop tomorrow’s new offerings, but you want to make sure that the experimentation strategy is a smart one. Organizations should never experiment on a grand scale in uncertain domains. Experiments need to be big enough to get valid data about their viability, but not so big that the potential failure will be devastating to the business.

Invite input. Leaders need to make it clear to people that their voice is not only expected but also welcomed. There’s an implicit belief that no one ever got fired for silence. I think the job of leaders is to flip that around. In the complex, uncertain industry in which we operate, the people that we’re not hearing from are not of much value.

Because the tendency for employees is to remain silent about issues, leaders need to be proactive in inviting input. It’s one thing to say, “I’d love to hear from all of you,” but it’s another to turn to a specific employee and ask, “What do you think of this situation? I’d love your thoughts.”

Avoid stretched goals and closed ears. While there are several examples of organizations doing a good job of creating a culture of blameless problem-solving, there are also examples of companies that have faced the consequences of squelching safe and open communication.

Wells Fargo’s recent failure, in which millions of accounts were created without consumers’ consent, is one such example. The bank’s initial cross-selling strategy wasn’t fully in touch with the reality of customers’ limited wallets, which created immense pressure to have more and more products per customer, leading employees to activities that became fraudulent and problematic in other ways. Had employees felt able to speak up, push back, and say what they were learning, the strategy might have been tweaked.

Develop a productive response to bad news. Psychological safety in the workplace can be shattered the second a boss erupts in anger over a reported failure.

Leaders need to train themselves not to overreact emotionally to bad news. They need to pause, breathe, and disrupt what might be the natural, instantaneous reaction of emotion or disapproval, and say, ‘Thank you for that clear line of sight.” Now what should we do next? What are your ideas? Here are my ideas.’ It’s what I call a productive response to bad news, as opposed to a natural, in many ways normal, response to bad news.

Next Blog: How this relates to and drives the CEO Business Roundtable.

TOP FIVE – US Restaurant chains (revenues):

1. McD’s, $38.5B

2. Starbucks, $20.8B

3. Chick fil-A, $10.5B

4. Subway, $10.4B

5. Taco Bell, $10.3B

VISICALC - It’s not often you discover the secret history of something you thought you already knew, but that’s what happened to me this summer when I started investigating the impact of VisiCalc, the world’s first spreadsheet. Why research the history of spreadsheets? Because in my world, I am lost without a spreadsheet; sad but true.

Who knew Steve Jobs himself said VisiCalc was more responsible than any other factor for the early success of Apple? Or that its successor, Lotus 1-2-3, was built by VisiCalc’s former product manager? Or that Excel, the next iteration of the spreadsheet, drove the adoption of Windows, changing how both Wall Street and Main Street accomplished that most essential of tasks: keeping an eye on the money.

Finding the key players turned out not to be hard. Dan Bricklin, designer of VisiCalc and the historian of the bunch, once gave a TED talk that’s been viewed more than a million times. From him, it was easy enough to hop from one person to another. They all still keep tabs on each other—even if they were locked in bitter competition all those years ago. In the early days of the PC, it was a much smaller world than it is now.

But this wasn’t just a walk down Memory Lane. Not only was VisiCalc the first killer app, but as a Promethean event in the history of personal computing, it has come to define tech-industry disruption. Its lessons are valuable to this day.

It was the first killer app, the spark for Apple ’s early success and a trigger for the broader PC boom that vaulted Microsoft to its central position in business computing. And within a few years, it was tech-industry roadkill.

The story of VisiCalc, a humble spreadsheet program that set the tech world ablaze 40 years ago, has reverberated through the industry and still influences the decisions of executives, engineers and investors. Its lessons include the power of simplicity and the difficulty of building a hypergrowth company in a hypergrowth industry.

Indeed, its lessons have been so internalized by today’s tech titans that they have significantly inoculated themselves against that sort of tumultuous, competitive dynamism—aka disruption.

VisiCalc was unveiled on June 4, 1979 and shipped that October. Dan Bricklin first dreamed it up in a classroom at Harvard Business School—the room now bears a plaque commemorating his idea—and partnered with Bob Frankston, who coded VisiCalc and collaborated in its design.

When users opened VisiCalc, they would see a character-based grid where numbers or text could be manipulated. It was handy for budgeting, financial projections, bookkeeping and making lists. Today it’s instantly recognizable as a spreadsheet, as familiar to us as a blinking cursor, but at the time it was a novel idea that had to be experienced to be understood.

Initially VisiCalc ran only on the Apple II, a then-revolutionary new personal computer and Apple’s first major consumer product. While some Apple II models had just 4 kilobytes of RAM, VisiCalc demanded a whopping 32KB. (Even the cheapest of today’s iPhones have tens of thousands of times as much RAM.)

“It was a cute little program but who was going to expect anything big out of it?” recalls Mr. Frankston.

Steve Jobs subsequently said that VisiCalc “propelled the Apple II to the success it achieved more than any other single event.”

VisiCalc was the first piece of software that was so popular that it drove people to buy computers just to run it. A 1984 article for PC Magazine noted: “People entered computer stores to purchase VisiCalc and something to run it on.” At the time, VisiCalc cost $100, but the Apple II to run it could set you back $2,000 or more—much more. The revenue of VisiCalc’s publisher, which was almost entirely attributable to VisiCalc itself, mushroomed from virtually nothing in 1979 to more than $40 million in 1983, says Edward Esber, who was VP of marketing at the company.

This was the first lesson of VisiCalc—that the dawn of a new platform is when empires are built. In this case, the shift was from the paper ledgers that accountants had used for centuries, to their digital equivalent on the PC.

The PC was arguably the first modern tech platform—that is, a thing that had value because it enabled many different types of software and services—and much of what happened next became typical of every computing platform that has come since.

Unfortunately for Messrs. Bricklin and Frankston, the second lesson of VisiCalc was that a killer app doesn’t guarantee enduring success. The software might have been the first tech victim of what academic Clayton Christensen would later call “disruptive innovation”—when a smaller company outflanks an incumbent by targeting an overlooked market.

Mitch Kapor, who worked for VisiCalc’s publisher as a product manager, left the company and began working on his own spreadsheet program. Instead of creating it for the Apple II, Mr. Kapor put his money on another horse: the brand-new IBM PC. Released in 1983, his software—Lotus 1-2-3—took the world by storm on a scale that even VisiCalc’s success couldn’t have foretold.

“It honestly seemed to most people like a very risky thing to do, because in the market at the time, Apple II was the dominant machine,” says Mr. Kapor.

Lotus 1-2-3 included the major features of VisiCalc, and even allowed direct import of VisiCalc files. But it could do more. As someone who was very familiar with the spreadsheet market, Mr. Kapor knew what customers were clamoring for. Lotus 1-2-3 had variable column widths, a macro language to allow simple programming in cells, and the ability to create charts and graphics. Plus, it was fast.

VisiCalc, meanwhile, was mired in a lawsuit between its creators and its publishers—software in its early days was distributed under an author-publisher model, like books. The acrimony was likely one reason the developers failed to capitalize on the rise of the IBM-compatible PC.

One year after the IBM PC debuted, fewer than 100,000 units had shipped. In that time Lotus 1-2-3 shipped $53 million of spreadsheets. By year two, the IBM PC had sold 280,000 units and Lotus achieved $156 million in sales.

On the strength of pre-orders alone, Lotus Development, the parent company, won a then-extraordinary $5 million in venture capital, and in 1983 the company went public. Within a few years of its founding, Lotus had thousands of employees.

“At the time we were the world’s largest independent software company, and two years before that we didn’t exist,” says Mr. Kapor.

The third lesson of VisiCalc and its successors is that the tech industry’s biggest players now understand the threat of disruption, and make it harder for upstarts with innovative ideas to challenge their dominance.

Now, when trend watchers spot a potential new platform, even the largest companies invest heavily in it—especially if it might mean their disruption, says Steven Sinofsky, former head of the Windows division at Microsoft and current partner at venture-capital firm Andreessen Horowitz.

After Mr. Kapor stepped down as CEO of Lotus, the company focused on porting its product to IBM’s OS/2, its attempt to beat Microsoft at PC operating systems, missing the shift to Microsoft’s Windows. That shift was driven largely by users clamoring, yet again, for the best system to run the best spreadsheet—in this case Excel, which Microsoft announced for Windows in 1987.

Microsoft went on to largely flub other platform shifts, especially to mobile computing. But more recently, it managed the shift to cloud-based software with great success by embracing the disruptive technology—witness the fact that it is again the world’s most valuable publicly traded company.

Big companies getting ahead of their own disruption is now common. The iPhone was born out of Apple’s paranoia that someone else might supplant the iPod. And Facebook ’s acquisition of potential disruptors Instagram and WhatsApp gave the company the dominant social platforms on mobile, where most online social networking subsequently moved. Amazon’s dominance in voice-controlled assistants is a product of the company’s willingness to launch startups within itself and allow them to quickly fail—as the Fire Phone did—or disrupt much bigger incumbents, as Alexa took both Apple and Google by surprise. And Google, of course, had the foresight to acquire and invest heavily in Android.

Certainly, there are still examples of new companies rising, but it’s hard today to imagine the handful of giants that loom so tall over the tech world allowing themselves to go the way of VisiCalc or Lotus. And the more wealth they accrue to buy into new technologies, spreading their bets evenly around the whole roulette wheel, the more invulnerable they appear.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Jimmy Fallon (45), Tommy Lee Jones (73), Dan Pugliese …famous hockey Dad, Ava Suffredini ….the best niece, Trisha Yearwood (55).

FOGCAM - This month, the oldest operating internet webcam will shut down, the site’s administrators said last week. FogCam started as a student project at San Francisco State University (go Gators) and, barring a few location changes and maintenance updates, has faithfully broadcast campus images since 1994.

FogCam was inspired by the first internet webcam, a coffee pot live stream created by scientists at the University of Cambridge.

By today’s standards, FogCam’s pretty simplistic. But in 1994, when the internet was pay-per-minute, it was cutting edge. FogCam's basically a lock for the Smithsonian Guggenheim Museum of Internet History.

Early webcams gave internet users their first taste of streaming. In the decades since, they’ve sped up, streamlined, and democratized video communications.

FogCam co-founder Jeff Schwartz said Adam Curry used it as a model for his website (something called “MTV”). And another early webcam of a fish tank—created by Netscape’s founding engineer Lou Montulli—served as a test bed for internet improvements that laid the foundation for e-commerce, GIFs, and uploaded photos.

NORTHERN EXPOSURE - On the highway, when people slow down to look at a car crash, climate change is like that because everyone is slowing down to look at the accident but not realizing that we are actually the car crash. Reuters takes you to Longyearbyen. "With a population of slightly more than 2,000 people, it is the northernmost town on the planet. It is also the fastest-warming." A climate-change frontier in the world's northernmost town.

From the fastest warming town on the planet to the fastest warming city in America. The hellish future of Las Vegas in the climate crisis: 'A place where we never go outside.' (It's a dry heat.)

While the very different towns of Longyearbyen and Las Vegas give us a view into climate change's ominous future, the intensity of Dorian provides a real time look at its present. People who live in The Bahamas are used to hurricanes. But they're not used to this. The epic power of Dorian came to The Bahamas. And it stayed there. AP: Humanitarian crisis unfolds in hurricane-stricken Bahamas.

L.E.D. ZEPPELIN - The gradual shift toward more efficient light bulbs is one of the largely unsung success stories in the fight to reduce energy use and greenhouse gas emissions. U.S. household energy consumption is down 6 percent since 2010, and this is due in part to the increase in the use of energy-efficient lighting.  Well, if it's good for society and good for the environment, you probably know what's coming... NYT: Trump Administration Is Rolling Back Rules Requiring More Energy-Efficient Bulbs. (No one ever accused him of being the brightest bulb...)

INGLEWOOD, CALIFORNIA — SoFi Stadium at Hollywood Park, the future home of the Rams and Chargers, will cost roughly $5 billion to build, making it the priciest NFL venue by a mile.

Naming rights: Private lender SoFi will reportedly pay more than $30 million annually over 20 years to put its name on the stadium — the most ever paid for stadium naming rights.

The big picture: Hollywood Park will also feature residences, hotels, retail spaces, public parks, a concert venue and office space. Add it all up and the complex could cost $10 billion, making it one of the largest privately financed projects in the country.

Looking ahead: In addition to housing the Rams and Chargers, SoFi Stadium is already set to host the Super Bowl in 2022, the college football championship in 2023 and the Olympics in 2028.

SWAMI’S WEEK TOP PICKS –

NFL Football Pick of the Week – Sunday 9/22, 8:20 PM (ET), NBC: Los Angeles Rams (2-0) vs. Cleveland Browns (1-1). The Los Angeles Rams have won three NFL championships, and they are the only franchise to win championships representing three cities (Cleveland in 1945, Los Angeles in 1951, and St. Louis in 1999). Yes, this week the Rams return to their original city, Cleveland. Rams win 24 – 14. (Season to Date 1-1)

NFL Football Pick of the Week – Thursday 9/26, 5:20 PM (ET), FOX/NFL: Philadelphia Eagles (1-1) vs. Green Bay Packers (2-0). Tough to win in Lambeau, especially with a depleted offense: Pack win 30 – 17.

College Football Pick of the Week – Saturday 9/21, 8:00 PM (ET), CBS: #7 Notre Dame Fighting Irish (2-0) at #3 Georgia Bulldogs (3-0). Sanford Stadium will be drinking Sweetwater Happy Ending brew not Guinness in this one. Bulldogs win 35 – 24. (Season to Date 3-1)

College Football Pick of the Week – Friday 9/27, 8:00 PM (ET), FS1: #13 Penn State Paternos (3-0) vs. Maryland Terrapins (2-1). I smell an upset in the Big Ten, Maryland wins 38 – 34.

DIII College Football Pick of the Week – Saturday 9/21. 1:00 PM (ET), HGTV: Alfred Saxons (2-0) at #22 Ithaca College Bombers (1-0). Two Central New York rivals clash at Butterfield Stadium on South Hill, Bombers prevail 42 - 20. (Season to Date 1-1)

DIII College Football Pick of the Week – Saturday 9/28. 1:30 PM (ET), HGTV: #2 Mt. Union Purple Raiders (1-0) vs. #14 John Carroll Blue Streaks (1-0). Mt. Union heads to Don Shula Stadium with one of D-III’s best programs in recent memory. Purple Raiders win 38 – 28.

SCIAC Pick of the Week (Football) – Saturday 9/21, 7:00 (PT), Hallmark: #10 Whitworth Pirates (1-0) vs. Chapman University Argyros (1-0). The Pirates continue their march through the SCIAC, 40 – 24.  (Season to Date 2-0)

SCIAC Pick of the Week (Volleyball) – Tuesday 9/24, 7:00 PM (PT), Hallmark: University of La Verne Leopards (6-5) vs. #3 Claremont-Mudd-Scripps Republicans (9-2). SCIAC conference play begins and these two rivals clash in both teams league opener. Republicans continue to dominant 3 – 1.

MLB Pick of the Week – Saturday 9/21, 11:20 AM (CT) Comcast:  St. Louis Cardinals (86-67) vs. Chicago Cubs (82-71). I t is time to say adios to the Cubbies, Cards win 5 – 3. (Season to Date 7-4)

MLB Pick of the Week – Saturday 9/28, 1:05 PM (ET) FS1: Cleveland Indians (90-63) vs. Washington Nationals (83-68). The last weekend of the 2019 season and these two teams are slugging it out for a one game playoff. Nats win 6 – 2.

English Premier League Pick of the Week – Saturday 9/21, 4:30 AM (PT) CNBC: Leicester City (2-2-1) at Tottenham Hotspur (2-2-1). The Spurs win this one, 3 – 1.  (Season to Date 1-3)

English Premier League Pick of the Week – Saturday 9/28, 7:00 AM (PT) NBC: Everton (2-1-2) vs. Manchester City (3-1-1). Man City is playing nice football thus far this season, they win 2 – 1.   (Season to Date 1-3)

2019 Season to Date (29 -22)

Next Blog:  Words of the Month, Dear Rink Rats, and Digital Cash.

Until next time Monday September 30, Adios

Claremont, California

September 20, 2019

#X-9-398

3,380 words, eight minute read

CARTOON OF THE WEEK – The New Yorker, Teresa Burns

RINK RATS POLL – What is your safe place?

_____     Home

_____     Work

_____     With Family/Friends

_____     DraftKings

_____     I never feel safe

_____     Hoot Owl

_____     Don’t know

QUOTE OF THE MONTH – “No work is insignificant. All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.”

—Martin Luther King, Jr.

Rink Rats is a blog of weekly observations, predictions and commentary. We welcome your comments and questions. Also participate in our monthly poll. Rink Rats is now viewed in Europe, Canada, South America and the United States.

Posted at Rink Rats The Blog: First Published – May 3, 2010

Our Tenth Year.

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