## Costco Toilet Paper is Soft on the Math

Denominators make everything feel better, including toilet paper.  A really good denominator can help you figure out that you should not buy the bulk package of toilet paper from Costco.  That’s because the real estate you are storing it on is way too expensive.

To understand this, consider your cost of housing.  If you haven’t done so already, you should probably figure out how much you’re paying every month for each square foot of living space in your home.  For example, if your living expenses are \$3,000 per month on 1,500 square feet, you’re spending \$2 per month for each square foot.

The bulk package of toilet paper occupies four square feet of floor area, which represents \$8 per month of storage costs.  The package costs \$20 for 30 rolls that will last a family of four about two months.  That’s \$10 per month for toilet paper, which seems like a bargain compared to about \$15 per month you would pay for the package at a regular grocery store.  But your \$5 of savings is sitting on top of \$8 worth of real estate.  The unit-cost savings is less than the cost of real estate that it’s occupying.  The Costco toilet paper is just too expensive to forgive real estate cost that it’s imposing on you.

So, how does this relate to workforce analytics?

Appropriate Denominators in Workforce Analytics

Throughout the analysis of the value of your workforce, it is common to talk in numerators.  Number of people.  Salaries.  Benefits costs.  But what is usually more meaningful is to match up the numerators with appropriate denominators.  Number of people this year divided by number of people ten years ago (it’s usually not what you think).  Salaries per month during unfilled vacancies (actually a lot of money).  Executive compensation divided by organizational revenues (a drop in the bucket).  Numerators become more meaningful when you divide them by the right denominator.  And you must experiment and choose wisely.

With truly strategic business analytics, the biggest opportunity for novel insights is the blending of numbers from different strategic pillars.  You could have a finance metric divided by a human resources metric, such as capital invested per employee.  You could take a sales and marketing metric and divide it by people, such as revenues per salesperson.  Ratios from within a VP portfolio are often really easy to pull together because you can usually get them from a single database.  Once you have those easier in-house numbers figured out, it’s vital to get into the difficult metrics.

With the toilet paper example, it is the price of consumer goods are familiar to us as shoppers.  Then unit price is the next level of complexity, looking at price-per-roll.  You need to then seek information that is outside of the shop where the question was first posed, and in this example it’s housing cost.

The Story Changes When Better Denominators Are Chosen

One of my favorite experiences was a health & safety statistic about back injuries from over-exertion.  We knew that a large number of men over age 55 were pulling their backs from over-exertion.  But we discovered that there was a larger denominator of men over age 55, and that their percentage frequency of injury was lower than expected.  By contrast, those entering middle-age at age 45-54 had the highest frequency of these types of injuries.

When I was helping the client figure this out, I had personally pulled my own back at the gym at the age of 46.  I was in defiance about the fact that I was getting older, and trying to prove myself by lifting something that I should not.  I proposed to the client that those age 55+ are too wise for such foolishness, and those under age 45 can handle the challenge because they’re younger, fitter, happier.  I proposed a new interpretation; over-exertions are not about stand-alone physical vulnerability, they are about the disconnect between actual ability and self image, particularly in the social context.  The client liked it.

In order to rock it, each database had to be high quality, allow apples-to-apples comparisons, and have enough fields to break out the data by ten-year age cohorts.  These are critical intermediate steps, and not every organization is there yet.  What is important to notice is that as you improve your numbers, opportunities abound.  You can get stronger each time.  Nothing is so trivial that you can’t make it better with analytics.  And yes, you can afford the good stuff.  If you earn it.

## Sexism is a By-product of Incompetence

In the game of life, are you nice to those who out-perform you?  Maybe, if it’s not a big deal if you lose.  But if you lose games all the time, you might not be nice to those who are strong.

There was an interesting study from 2015 making the rounds anew in November 2017.  The study showed that low-performing males in the online game Halo 3 were hostile towards high-performing females.  The study found:

“…lower-skilled players were more hostile towards a female-voiced teammate, especially when [the male was] performing poorly. In contrast, lower-skilled players behaved submissively towards a male-voiced player in the identical scenario. This difference in gender-directed behaviour became more extreme with poorer focal-player performance…. Higher-skilled [male] players, in contrast, were more positive towards a female relative to a male teammate.”

The general idea is that in a contest of skills in a male-dominated environment, there is a hierarchy amongst the men in which junior men are politely submissive towards the men who are at the top of their game.  However, if a woman enters the arena, the lower-ranking men perceive that they can be pushed even lower in the hierarchy and respond with hostility towards the female entrants.

By contrast, higher-performing males aren’t as worried about hierarchical reorganization, so they act like gentlemen, scoring points (figuratively) for being both high-performing and well-mannered.

This is relevant to workforce analytics because the data was good.  There was a clear performance measurement, verbal communications were recorded (including hostility), and it was possible to split the data between males and females.  It’s hard to get this kind of data, and sometimes it’s best to look at games and sports, where data is abundant, to make meaningful interpretations.

In terms of what interpretations to make, it’s a reminder that women can’t simply be given permission to enter a male-dominated area of work.  Verbal discouragement and unfair treatment can damage performance, so creating an inclusive environment is key to allowing women to perform at their pre-existing level of competence.  But that only takes care of women coming up to par.  It is also implied that women need support to grow upwards and onwards.  That is, encouragement and targeted supports directed towards women might be part-and-parcel of enabling women to become equals and superiors.  And some of this support might come from high-functioning men.

The paper entitled Insights into Sexism: Male Status and Performance Moderates Female-Directed Hostile and Amicable Behaviour, by Michael Kasumovic and Jeffrey H. Kuznekoff, is from July 15, 2016.  In my own network I picked this up as a result of the paper being tweeted by Dr. Jennifer Berdahl from UBC.  Dr. Berdahl is well-known and her tweet drove more than 5,400 retweets and 214 comments.

The comments responding to Dr. Berdahl’s tweet were lively and provocative.  For example, the original paper proposes an evolutionary rationale for the male behaviour, and several people thought this was not meaningful (i.e. maybe this has nothing to do with cavemen).  Some people thought that the context of the research (online gaming) is not representative of society overall, because of the number of teenage boys involved.  It’s well known that those aged 15-25 exhibit behaviours that cannot be extrapolated into the general population.

The most prevalent comment was that the study rings true.  This pattern of behaviour resembles typical behaviour in society, and it mirrors peoples’ experiences in many realms.

## And The Robot Looked Outward, Feeling Nothing Inside

How close are we to achieving human-level artificial intelligence?  We’re making progress but it might be a long way off, possibly never.  There are five major milestones required in order for computers to become as intelligent as humans.  This is covered in a good Huffington Post article from October 2017.  Here are the highlights:

• Generality is the idea that an approach from one domain can be applied to another. For example, tips on folding the laundry by doing the big-and-easy things first can be applied to other areas of work such as cleaning data.  Artificial Intelligence can do this kind of thing already.
• Learning without being taught is another milestone. Deep Mind, a company owned by Google, has an artificial intelligence system called AlphaGo Zero which recently achieved this goal.  AlphaGo Zero set a goal and learned strategies to achieve that goal without having its hand held by programmers.
• Transfer Learning is like generality but it allows humans to transfer one abstract concept (not just an approach) and apply it to a totally different context. It’s about using the pattern-forming behaviour of the human brain and applying symbolic approaches to the task at hand.  AI cannot do transfer learning yet, but they’re working on it.
• Common Sense turns out to be hard for a computer to figure out. If you have been to a swimming pool you know that Michael Phelps must have got into pool in order to win an Olympic medal in swimming.  As a human you know that Phelps got wet.  Computers don’t know that Phelps got wet.  There is speculation that humans are running off memory and coming to a logical conclusion, and computers need this memory in order to pull together common sense.  They’re working on it.  It’s reminiscent of the new Blade Runner movie, which has brilliant sub-plot about the human-ness of our memories.
• Self-awareness or consciousness in computers looks like it might never happen. This is the idea that humans can develop a subjective experience, which is experienced personally and might be quite different from the experience as observed by a neutral third-party.  They’re pretty sure they can get a computer to pretend to be self-aware, but on the inside it would have a cold heart.

I like the self-awareness question because it makes it sound like the smartest AI ever will be just like a psychopath who has perfected their game of crocodile tears.  We won’t even need to hire psychopaths any more because everything they are good at will be done by computers.

By the way, what jobs do we want to assign to psychopaths?  Just asking.

## Everything Causes Everything Else

Do you need to be engaged at work to be effective?  Sure, maybe.  But maybe not.

A provocative article by Alec Levenson from 2015 argues that Employee Engagement Does Not Cause Performance.  Levenson says the notion that employee engagement causes performance “makes intuitive sense yet does not hold up empirically.”  He argues that the link between engagement and performance is correlation, not causation.  Or rather, if there is causation it is probably the reverse; better corporate performance probably causes higher employee engagement.

I think this interpretation is consistent with the idea that a thriving and growing organization will tend to be in hiring mode and have a larger number of new hires who are in a high-engagement honeymoon phase.  Thriving businesses have newer machinery and newer buildings, and employees are subjected to endless compliments from family and friends for getting a good job at a winning company.  These factors may drive engagement regardless of the work experience.

Levenson notes that the statistical models are troublesome as they can confirm causation in either direction.  It’s a real problem in statistics.  Sometimes the causation can go in both directions or in a circle.  I exercise, so I sleep well, therefore I eat well, and – behold – I have energy to exercise.  Hiring is down, so consumer confidence is down, thus consumer spending is down, and hiring drops further.

Often there is a third factor causing everything else to happen.  Two major drivers of engagement are a collaborative workplace culture and pro-social front-line managers who make positive interventions.  Yet those items can drive productivity directly and engagement directly, resulting in a spurious correlation.

Within the economics field, there is a dirty little secret that everything causes everything else.  Economies are incredibly complex, and economic models often get more accurate as you add a larger number of variables.  Usually the biggest drivers of the economy are things like oil prices, interest rates, housing starts in the US, and consumer spending in China.  When you throw those major drivers into any cause-and-effect model, you usually discover that your personal project is not such a big deal.

However, I think the debate about the direction of causation is moot.  The world is a big, hot mess of major forces driving success and failure, and every now and then someone is able to make the case that they themselves caused everything to happen.  So what should you do?  Give appropriate thanks and move on with your own contribution.

As for the statistical causation, just take your placebo.  Take vitamins, drink that one glass of red wine per day, show up, answer the phone, and go with the flow.  After all, it’s really about your personal engagement, isn’t it?  And maybe the people working next to you.  So help them out, too.  Maybe you can help build team spirit and create a little spurious correlation while you’re at it.

## Then The Introvert Spoke, And It Was Good

When someone steps forward in a manner that sets themselves apart from the crowd, are they a natural leader?  Natural leader, maybe.  Good leader, perhaps not.

A gentleman named BG Allen has pulled together a compendium of resources on the topic of introverted leaders.  For those of you who are unfamiliar with Susan Cain’s blockbuster TED Talk on the Power of Introverts, introverts are reluctantly being put into the spotlight as potentially great contributors to society.  Introverts are being overlooked and misunderstood because they are in the minority and their unique difference reduces the likelihood their views will be heard.

Allen has found multiple sources beyond Susan Cain, that get into the unique contribution of introverts as leaders.  I tried to find if Allen had written a book about this.  He hasn’t, but an Amazon search on “introverted leader” reveals a dozen books on the topic.  There are great articles in Allen’s compendium, from Fast Company, Forbes, and Psychology Today.  The Psychology Today article even cites studies showing that introverted leaders that are not just adequate, they can also be superior leaders.

Although I am an extravert, I have personally benefitted from strong introverted leaders over the years.  You might have experienced the same thing.  I think that when we are at our very best, we come from a strong sense of internal strength, knowing our values and our thoughts with a clear sense of introspection.  I always look up to the strong introverts in my life who seem to be the masters of the internal journey.  I think it would be a good thing if we could cultivate this virtue in teams and in society by putting introverts in roles where they can lead by example and help others develop this strength.

My personal experience has been that as I aspire to be a better leader, I’m a little bit stronger when I hang back a little and let others talk.  I’m a little more clear-headed if I wonder why I think the things I think.  And I can cause others to be stronger by understanding what’s going on inside their own head and heart, independent of what sprang into my own mind seconds ago.

I think this emerging evidence of introverted leaders is best understood when you think of who are the very worst leaders.  The very worst leaders are those with poor emotional intelligence, bullies, narcissists, people who value their own excellence first and negate the contribution of juniors, and most importantly those who get ahead by smooth-talking their way into the next promotion.  These personality vices are often the mark of the extravert.  In order for an extravert to become increasingly excellent at leadership, they must avoid these pitfalls, seek solitude, and look inside themselves just a little more often than comes naturally to them.  Just pretend to be a little bit shy, and you might achieve greatness.  And if you’re already like that to begin with, be proud about it.  And tell somebody.

[Special notice: there is an event in Vancouver on the evening of Friday, November 17/2017 on the topic of “Introverts and Extroverts as Leaders” by Faris Khalifeh.  For more information look into tickets here.]

## Tech Change Will Make Commies Of Us All!!

Is it just my imagination, or has there been an up-tick in socialist rhetoric lately?  Don’t get me wrong, I think that decisions about the role of government in our economy should be put in the hands of voters, and I recognize that for a few decades people steadily voted for less government.  But it looks like once every couple of weeks, another corporate heavyweight and another major news outlet presents a strong case that corporations have screwed it all up and it’s time for government to step in.

I’m counting this as a relevant topic for human resources generalists to take really seriously.  Brokering a compromise between the corporate mission and the sentiments of front-line workers is much of what we do all day, whether it’s in collective bargaining, employee communications, or just explaining a layoff to an affected employee.  So, when you’re trying to find an appropriate balance between the interests of unions and investors, it can be important to keep your fingers on the pulse.

In an article from Wired, the author criticizes Equifax, which released the confidential financial information of hundreds of millions of borrowers.  The author asserts that the Equifax breach is different from security breaches at regular bricks-and-mortar companies because Equifax’s entire reason for being is the safe storage of confidential information.  An effort at which they failed.  The author calls for the dissolution of Equifax’s corporate charter.

In my earlier blog post summarizing a major report by McKinsey on the structure of the gig economy, the general management consultancy started to leak spoonfuls of compassion.  The article notes that modernizing the social safety net may be warranted, in particular to extend social insurance systems to cover independent workers and those changing traditional jobs more frequently.  McKinsey also points to the pooling of workers by unions in the entertainment industry as a suitable vehicle for delivering health benefits coverage.

In an HBR article by Eric Garton from Bain & Company, another general management consulting firm, the author asserts that we should be investing more in employees to improve labour productivity.  After detailing a number of ways employee effort can be harnessed through employee engagement and a lower level of busy-ness, the author then turns to public policy.  Garton asserts that higher wages and investments in health care, training and education are among the possible additional improvements needed to achieve a better economy.

Over at Guardian.com, the left-leaning publication might normally be expected to call for greater government involvement in the economy.  But in this article they have abandoned those little comments from years gone by about tax-the-rich-here and social-programs-over-there.  They’re going for the jugular and calling for a government takeover of Google, Facebook, and Amazon.

The author explains that the first-to-market and winner-takes-all nature of these major platforms eliminate competition, voiding any pretense of a free market.  With artificial intelligence likely causing power and money to concentrate even further in future, nationalization might just be fair game:  “…utilities and railways that enjoy huge economies of scale and serve the common good have been prime candidates for public ownership. …Tinkering with minor regulations while AI firms amass power won’t do.”

Over at the Atlantic, they’re interviewing people in the Silicon Valley who are asserting that our consumer electronics have addictive properties that are deliberate and need to be curtailed.  One expert “…compares the tech industry to Big Tobacco before the link between cigarettes and cancer was established: keen to give customers more of what they want, yet simultaneously inflicting collateral damage on their lives.”

What should we do about being duped into staring at our smartphones far too often?  Why, open revolt, of course!  “Harris thinks his best shot at improving the status quo is to get users riled up about the ways they’re being manipulated, then create a groundswell of support for technology that respects people’s agency–something akin to the privacy outcry that prodded companies to roll out personal-information protections.”  On the low-end the same experts are calling for a shift to non-addictive behaviours, similar to switching to organic produce at the grocery store.  But that’s for lightweights.

Now, some of this might just be talk, and maybe we should take some of it with a grain of salt.  But next time you’re in the elevator or at the bargaining table or out for drinks with a friend who is stuck in their career, listen more closely.  As an HR professional you’re going to be expected to show that you’re in touch, and this kind of thing can sneak up on your.  So think carefully, ahead of time, what you’re going to say when you’re out in public and your best friend asks you to hold their pitchfork.