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Commoncog |
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a newsletter on accelerating business expertise |
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Commoncog This Week
This week's Commoncog piece is free; next week's piece will be members-only.
The Shape of the Game We Play — This essay is ostensibly about learning business, but is actually about ZIRP.
A couple of weeks back, a reader replied on Twitter and said that while he enjoyed reading business biography as much as the next person, he thought that learning business through biography wasn't really effective. “Reading books about weightlifting doesn’t shortcut actually hitting the gym, doing the reps, feeling the movement and developing the instincts.”
I thought this was partly accurate, and the ways in which it was inaccurate would be interesting to explore in a full-length Commoncog piece. At the time, I replied (edited for clarity):
”I think the two are different domains. Here’s an analogy. Let’s say that you move to a valley in a foreign land. You build a house with your bare hands, learning the skills of a mason and a carpenter and an electrician and a plumber. You build a beautiful house. All is good for nine years. But because you don’t read the history of the area or talk to the natives, in the 10th year a flood devastates the valley, destroys your house, and you die.
The thing about business is that you have capital cycles, and those are like 10 year floods.”
This week's essay is about the weird things in business that you ideally want to learn through reading, not doing. But it's also an opportunity to reflect on the regime change that occurred after ZIRP ended in 2022.
Note: members may leave comments below the piece. I'm also going to update last week's case on Data General this week, after discussion in the members forum last week. So if you're a member, stay tuned for that.
💡 The Commoncog Membership Program is like an ongoing MBA, for a fraction of the price. Get full access to members-only articles, a rich and growing case library, plus an exclusive, members-only forum.
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Member Discussions
The Commoncog members-only forum is a private place for sensemaking on business and markets.
Here are a couple of members-only discussions I'd like to draw attention to:
Note that you'll have to be logged in as a member to view many of these threads. You may login here.
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Elsewhere On The Web
I wanted to draw some attention to two of the pieces linked to in this week's Commoncog essay.
Tech Leadership Post-ZIRP — Uma Chingunde's reflections on tech leadership in the Post-ZIRP world, and what works in the current regime are worth reading first. (If you're a member, there's a discussion thread about her essay here).
Choice quote:
In hypergrowth times, it was easy to be a good leader but equally easy to be a bad one. Shreyas has an excellent series of tweets describing an “Incompetent Leader.” There are multiple people I can think of that easily fit the description, and it went viral for a reason. The tweet thread doesn’t mention ZIRP, but it was an essential ingredient in that scenario. Now that we are post-ZIRP, I believe it will be harder for incompetent leaders to follow that particular playbook. When everything slows down, accountability is emphasized at all levels. It is much harder to hide behind constant change, reorgs, growth, and a challenging hiring market. Leadership now demands deeper involvement in daily operations, with greater accountability for tangible results rather than perceived effort. Understanding all parts, i.e., teams, businesses, and technology, is essential. Overall, I see this as a positive for organizations and the people in them. The corollary, of course, is that these incompetent leaders have shifted to parts of the tech industry that is still flush with cash, since this means less accountability. Observe the number of execs in AI who have had middling performance running tech companies in the 2022—2024 post ZIRP period.
'Good Engineering Management' is a Fad — Will Larson has a wise reframing of the regime change:
In each of these transitions, the business environment shifted, leading to a new formulation of ideal leadership. That makes a lot of sense: of course we want leaders to fit the necessary patterns of today. Where things get weird is that in each case a morality tale was subsequently superimposed on top of the transition:
- In the 2010s, the morality tale was that it was all about empowering engineers as a fundamental good. Sure, I can get excited for that, but I don’t really believe that narrative: it happened because hiring was competitive.
- In the 2020s, the morality tale is that bureaucratic middle management have made organizations stale and inefficient. The lack of experts has crippled organizational efficiency. Once again, I can get behind that–there’s truth here–but the much larger drivers aren’t about morality, it’s about ZIRP-ending and optimism about productivity gains from AI tooling.
The conclusion here is clear: the industry will want different things from you as it evolves, and it will tell you that each of those shifts is because of some complex moral change, but it’s pretty much always about business realities changing. If you take any current morality tale as true, then you’re setting yourself up to be severely out of position when the industry shifts again in a few years, because “good leadership” is just a fad.
Larson then outlines what he thinks the core leadership skills are, across business regimes.
The Benefits of Bubbles — This is by Ben Thompson of Stratechery. I found this surprisingly hopeful. Not all AI spend is going to be wasted!
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I definitely have less time to do things now that I'm a father. Part of that is a challenge, as I'm trying to close out the Demand series and the Asian Conglomerate Series and the Data Driven series.
But I just wanted to call out Outcome Orientation as a Cure for Information Overload, which has continued to deliver results for me, perhaps doubly so, in this new phase of life. The truth is that most of us have opinions on things that don't matter. We read things or listen to podcasts or have feelings about topics that have literally zero impact on any of the outcomes that matter to us.
Life is vastly simple when you have opinions about only the things that drive the outcomes you want.
I wish you such clarity.
I'll see you next week.
Warmly,
Cedric
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💡 The Commoncog Membership Program is like an ongoing MBA, for a fraction of the price. Get full access to members-only articles, a rich and growing case library, plus an exclusive, members-only forum.
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