Habits and outcomes

Are utilitarians bad managers?

Dear Friends,

I shit you not, I had been looking forward to last week for years. Literally, years. Countless times I wrote in my journal over the past five years, “I can’t wait until November 2023.”

It was the light at the end of the tunnel: a once-in-a-lifetime opportunity to take 14 months off from work. No kids. No work. No responsibilities. Just total freedom to spend every day however I wanted.

Finally, the day arrived, November 1st, and with it, a terrible cold which was probably COVID.

My expectations had been so high and I was feeling so low. I descended into a major funk. Or maybe it was a minor depression. Poor Iris: I was sulking, irritable, and unbearable to be around. A couple of weeks earlier I had my final call with my therapist and we celebrated how much progress I had made over the past few years — and how much I have to look forward to over the next year.

Now I was so fragile and moody. Where did my progress go? What happened!? Is this how I was going to feel during my entire sabbatical!? 😱

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Iris and a few friends helped pull me out of my funk. They helped me realize that what I needed, I am embarrassed to admit, was a pat on the fucking back. Here I am, 43 years old, feeling like I needed something like my high school basketball coach to tell me that I played a good game.

I had been grinding so hard my entire adult life: saving money, focusing on the next step, supporting others. And instead of feeling grateful for all I have — and for the freedom in front of me — I was desperate for someone to tip their cap and say, “Well done, partner.” It feels embarrassing to be in my 40s and still seeking some kind of external validation. I share it here not to fish for pats on the back — truly, I’m already back to my annoyingly optimistic, grateful, and energetic self — but because I have a feeling that I’m not alone in my experience — and it would have been helpful for me to have read something similar from someone else.

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Anyway, this week’s newsletter is about habits, outcomes, and being a good manager. It makes a lot of associations between philosophy, philanthropy, anti-racism, and management theory … associations that are meaningful to me but may come off as disjointed to others. You’ve been warned!

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I started my career during the era of results-based management and SMART goals.¹ “Enough talk about principles, values, and process,” the thinking went. “Just show me the results!” It was the time of key performance indicators² and “what gets measured gets managed.”³

I had a former manager who was openly disparaging of good meeting facilitation or anything he derided as “process.” After receiving some feedback about his struggles to delegate clearly and solicit input, he replied exasperatedly, “Look, I’m not a process person. My role here is to define what success looks like, and then you all should be able to figure out how to get us there.”

Do utilitarians and anti-racists make for bad managers?

I’m not saying that results don’t matter, but I have come to think that overly focusing on results at the sacrifice of process will lead to disaster. I’ve been thinking about it over the past few weeks while reading about the fallout from bad management by Sam Bankman-Fried and Ibram X Kendi. Here’s where I go down a mini rabbit hole into utilitarianism, anti-racism, and effective altruism:

If we apply results-based management to philosophy, we get utilitarianism.⁴ And if we apply it to philanthropy, we get effective altruism.

In my 20s and early 30s, I identified as a utilitarian. Here was my thinking: I didn’t believe in a traditional God-like figure who hands down moral rules through prophets to us mere mortals. But I wasn’t ready to be a complete relativist who thinks that cultural norms determine everything and that there’s no such thing as good and bad.

Utilitarianism seemed like an elegant way out of the dilemma. What if instead of believing in a moral god, I believed that every human has equal value? Then I would have a handy ethical framework: we should act in a way that gives the greatest happiness to the greatest number of people. It’s what drew me to global development and philanthropy as a way to do the most good for the most people.

Taken to its logical end, utilitarianism stirs up some uncomfortable thought experiments. You’d have been a great utilitarian if you had strangled Hitler or Stalin to death with your bare hands in the 1920s. Famously, you should flip the switch to change the path of the trolley car so that it kills one person instead of five. But how many of us are brave enough to become responsible for the death of an innocent person, even if it means sparing five others?

We already knew that Sam Bankman-Fried (SBF) was a terrible manager before it was documented in Michael Lewis’ book, or in the court testimony of his former colleagues. He said it himself in a live interview with Andrew Ross Sorkin shortly after FTX imploded. SBF had little patience for rules or process.⁵

SBF was willing to do just about anything, including flouting the law, to reach his admirable goal of donating as much money as possible to improve the well-being of as many people as possible.

Ibram X Kendi is another consequentialist with little patience for process or intentions. Don’t show me your DEI statements, he says. Show me the salary differences between employees of different races. According to Kendi’s philosophy, any racial gap is racist by definition and the only way to not be racist is to narrow the racial gap. In other words, if vaccination rates (or standardized test scores or murder rates or anything) are lower among one racial group than another, that’s racism.⁶ Like utilitarianism, anti-racism also stirs up some awkward thought experiments. For instance, if White Americans are four times more likely to die of skin cancer than Black Americans, is that by definition racist?

By Kendi’s definition, it seems that it is. But anyway, it’s all academic. How To Be an Anti-Racist became a sensation between 2019-2021 when there was too much talk about racial inequality and not enough action. Kendi helpfully demanded action, but ironically, he didn’t know what actions would reduce racial disparities (and thus, per his definition, racism). And so, in the aftermath of George Floyd’s murder, he raised over $40 million⁷ to create the Center for Antiracist Research to look for answers. Kendi built celebrity status with a simple idea — let’s focus on action more than words — and practically no management experience, which led to the center’s implosion a few months ago.

SBF and Kendi offer cautionary tales for anyone hyper-focused on results with disregard to process. Bad management can’t be swept under the rug forever. If you just focus on the outcome without the operational experience of how to get there, eventually the house of cards comes crashing down.

Good habits lead to good outcomes, not the other way around

Over the past five years, Atomic Habits has been one of Amazon’s top ten best-selling books. James Clear offers his readers a simple message: don’t worry so much about your goals. Just focus on building good habits and those good habits will lead to good outcomes. Don’t think about the book you’d like to publish; just write three pages every morning. Don’t set a weight loss target; just focus on how you eat and when you exercise every day. Don’t think about the length of a marathon; just run 5% more this week than last week. It sounds like sensible advice today, but this kind of thinking was blasphemous 15 years ago.

As with most things, it all comes down to balance — and the pendulum will likely swing back from process to results in the coming years. For instance, you really can swim every day without ever getting faster. You can have the best manager in the world who is working on a product or service that is fundamentally flawed. But in my experience, it’s much more common to get excited about a big idea without giving enough thought (or commitment) to the habits, processes, and values that will get you there.

Most of us focus either on process or results, and few have cultivated both. The best organizations, I’ve found, benefit from the yin and yang of a great CEO and COO pairing. (My former manager Ruth,⁸ the best I’ve had, points her Substack readers to a helpful article about how organizations can embrace values, principles, and process while staying focused on results amidst the uncertainty of a fast-changing world. She also has some excellent tips for organizing a team retreat.)

As for me, I finally feel the liberation I had long been looking forward to. “What do you want to accomplish during your sabbatical,” a few well-intentioned friends have asked me.

Honestly? Nothing! Nothing at all. But I am very excited to play around with some new habits and see what happens.

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Iris Calderon

and

Alejandro De La Cruz

have been encouraging me to read Rick Rubin’s The Creative Act for some time, but I didn’t want to start a fourth book before finishing one of the other three! Well, I just cracked it open, and I’ll leave you with the quote from the opening page:

The object isn’t to make art, it’s to be in that wonderful state which makes art inevitable.

~ Robert Henri

Wherever you spent your weekend, I hope it included some happy habits,

David

1. Seriously, one of the most hyped social networks of 2005 asked users to list their lifetime goals, and then connected them to other users with similar goals.

2. At first, Facebook did everything to increase its number of users. Then, to sell advertising, it needed to shift to “active users.” To sell more advertising, it shifted again to “time on site.” But that just led to low-quality, sensational content, which caused an exodus of longtime users like me. So then they switched yet again to “meaningful interactions” — basically the number of direct messages, comments, and likes prompted by a piece of content. Maybe the quote should be “What gets measured gets managed, which solves past problems and creates new ones.”

3. There was hype about social impact bonds as a way to pay service providers to reach a target no matter how they achieved it. If you could figure out a way to reduce homelessness, improve students’ test results, or lower prison recidivism, you’d be paid handsomely. A few social impact bonds led to some genuinely useful innovations documented in a Brookings evaluation, but there were also plenty of downsides and the hype has subsided considerably.

4. Or I suppose more accurately, consequentialism, but tomaytoes, tomahtoes.

5. I feel compelled to explain why I’ve read such an insane amount about SBF over the past couple of years. In 2019, I was forwarded an email from SBF’s dad, a Stanford professor, with an endorsement for a job candidate. By 2021, SBF had already made some large donations to some Bay Area nonprofits. Everyone in the nonprofit sector seemed to have heard an unpublished rumor that he planned on donating $1B in 2022 and much more in the coming years. Grantee organizations wanted to know how to get a slice of the pie. And my peers encouraged me to try to influence SBF’s philanthropic strategy. (I was already feeling burned out and awkwardly, the president of Hewlett Foundation is a close friend of Sam’s parents.) Still, I was intrigued enough to follow SBF’s many media appearances, including an incredible (as in difficult to believe) appearance on 80,000 hours, where he said he’d happily choose a 10% chance of getting $15 million than a 100% chance of getting $1 million. (I wrote more about this last year.) The craziest thing of all: thanks to Alameda’s investment in Anthropic, all of FTX’s clients will likely recoup their money with plenty left over for a rebooted company while SBF sits in prison. Yesterday’s Saturday Essay in the Wall Street Journal asks, “Why Are We So Obsessed With Sam Bankman-Fried’s Parents?” and then goes on to answer the headlines question by drawing out lessons for every parent.

6. The actual words from his book: “A racist policy is any measure that produces or sustains racial inequity between racial groups.”

7. Including from my previous employer 🤷‍♂️

8. The most talented person I know in integrating inclusive, efficient processes toward clear outcomes