This week my blog is a book review. The book in question is Talent Wants to be Free by Orly Lobel,
an American Academic lawyer based in one of California’s universities – it matters not
which one.
I came to read this book because my daughter mentioned it to me.
Apparently her boss enthuses about it, and being myself interested in this
thing called the knowledge economy, I borrowed her copy and read it. What
follows is my opinion.
I would suggest that my daughter’s boss find better books to read,
for Talent Wants to be Free is repetitive
and banal in the extreme!
The setting for the book is what is called the knowledge era company,
where the implication is that information, knowledge and innovation are central
to competition among enterprises. This though is the definition of any company
in the free market, and is the basis upon which the industrial revolution was
founded – innovation in technology in a business setting, which required
information and knowledge, on a scale not before seen, leading to economic
growth and the spreading of material prosperity through the stimulation of
demand. So here we are in the 1750s with companies doing what the author (and
many more) regard as something that characterises businesses in the 21st
century. And the twist is that the author (unknowingly) demonstrates the
importance of information and knowledge in this long past era, in the final
chapter. I will tell you more of what constitutes a knowledge era company in
the future. For the moment I will focus on the review.
Talent Wants to be Free is essentially a book about legal matters, in particular
non-compete clauses in employee contracts that prevent them from working for
competing companies after leaving employment with their current employer. Also covered
are non-disclosure clauses, the protection of trade secrets, and the control
mentality of firms seeking to enforce these agreements to prevent the leakage
of proprietary information and knowledge.
Found within the text are many anecdotal accounts of what American
companies have done, or not done, how different States enforce or do not
enforce these contracts, scattered among which are bits of information from
research projects, the author’s and other peoples, combined with a liberal use
of quotes from Nobel laureates, which all point to the message that control and
restriction are bad for all – for employees, for companies, and for the economy
both local and national. And all this is presented, I suppose, to demonstrate
what is stated in the book’s sub-title which is – Why We Should Learn to Love
Leaks, Raids, and Free Riding. But there was no need to write such a book to
make this point. It is self-evidently clear that any company, any region, that
seeks to restrict the free flow of information and knowledge will atrophy (the
former Soviet Union being the classic example
of this). This understanding comes from systems theory, and the second law of
thermodynamics expresses the concept in formal terms – in a closed system,
which is one that is isolated, in other words no inputs or outputs cross the
system boundary, increasing disorder will result. Prevent the free flow of
ideas, and soon you will have problems!
That American companies are highly litigious is well known. It is
not however clearly stated how many of them actually engage in the legal battles
described in this book, so we are left wondering if, what is reported is just a
collection of rather extreme cases which are unrepresentative of the majority.
But being European quite frankly I do not care! Evidently this is a book for
Americans, and no effort has been made to make it appeal to a wider audience,
which perhaps reflects the parochial attitude often found in the United States.
The book is not entirely about legal matters and the author also
wanders into the area of organisational and industrial psychology, particularly
the matter of employee motivation, where she tells the reader what many will
already know, that financial remuneration is not the sole motivator. Wow! She
then demonstrates that reward systems need to be designed to create the
employee behaviour that is sought. Again wow!
She also mentions the work and motivations of Henry Ford and Frederick
Taylor but her knowledge of these are inaccurate. The author states that Taylor provided the
academic backing to Ford’s reforms (of production). This is not true.
Taylor pre-dated Ford by decades. Taylor’s work on the development of so-called Scientific Management took place during
the latter decades of the nineteenth century. I say so-called Scientific
Management for the work is not scientific at all. Mostly it is just precepts
dressed up as being scientific. There is a joke among engineers that goes like
this: electrical engineers have Ohm’s law, mechanical engineers have Hooke’s
law, but production engineers have the precepts of Frederick Taylor.
Many years ago I explored the work of Taylor in great depth, along with that of
Henry Ford. Taylor’s work was not that of an
academic (he worked in the steel industry in Bethlehem, Pennsylvania),
so it is no academic work, nor can it be described as scientific. While he made
technical contributions in certain areas, the most notable of which is the
Taylor equation, which relates to metal cutting on lathes, his efforts to
present his ideas about how to manage factories were nothing more that a disingenuous
attempt to package as scientific, what were just his opinions and obsessions.
Judging by his behaviour, it would seem also that he was suffering from psychological
problems. Today we would not praise him, but most probably advise him to seek
professional help.
Taylor was obsessed with control and efficiency, having discovered
as a young metal worker apprentice, that workers deliberately work
inefficiently to avoid managers setting the pace of work (this was known as
soldiering). So later in life he set about implementing a system of management
that would put an end to this, taking control over work (the thinking and
planning) away from shopfloor workers, and placing it in the hands of managers.
This is central control and what he was doing is known as vertical division of
labour. And Taylor was not alone, for there were many others developing related
ideas, such as time and motion studies, which were all part of a movement in
the late 19th century to develop the means for managers, often
acting on behalf of absent owners (investors) to formalise the running and
operation of businesses. And this interest in control was nothing new, for it
can be traced back to the early days of the industrial revolution, when
managers were faced with the challenge of organising and controlling people who
had, very much before then, been used to working in a more autonomous way, in
what today we would call a subsistence economy. One can also see this interest
in control in the writings of Adam Smith.
Henry Ford on the other hand, undertook his work on the development
of mass production lines many years after Taylor, and Ford was focused on what
is called horizontal division of labour, which again was not new, for it had
been applied since the early days of the industrial revolution, when factory owners
recognised that it was a way of de-skilling work, thus allowing them to employ
less skilled people at lower cost, and also giving them more power over
employees.
What Ford did was to take horizontal division of labour to an
extreme by creating jobs in an assembly line, that required little skill (hence
the quote from Ford which goes along the lines – the person who puts the wheel
on does not put on the nuts, and the person who puts on the nuts does not
tighten them …). This massive simplification of work also allowed him to
introduce automation, and of course this was all done in the context of what
was normal in those days – a very hierarchical organisation, where also horizontal
division of labour was also applied across all the functions that need to be
undertaken in a business, thus leading to the silos that have been and still
are the curse of many enterprises.
Ford in doing what he did, was focused on eliminating costs and
speeding up production so that he could mass produce. Interestingly though,
Ford eventually discovered that his production line was not a place where
people wanted to spend their whole working lives, and that their was a limit to
how long a person could stand this mind-numbing work where they constantly had
to undertaking machine like actions. His 20 dollar day was in part, a
recognition that to keep people working on the production line he needed to pay
above the odds.
Apart from the above defects in the book, as I have already
intimated, what one encounters in the book, is page after page of the same
issues discussed repeatedly, all of which could have been briefly summarised
and placed in an appendix! It is not until one reaches the final chapter than
one encounters something interesting, for at page 218 suddenly there is the
beginning of an introduction to the notion of companies cooperating and sharing
information, but then the book ends, so no sharing here on the behalf of the
author! Perhaps she thinks that this is enough to bring clients to her door?
Perhaps it is, if one does not know about such things, but the book does not
demonstrate that the author knows anything either, only that she knows how to
write a boring book deeply rooted in the notion that you tell as little as
possible – keep the trade secrets to yourself and only reveal them to those
willing to pay (perhaps?).
In the blind man’s world the one eyed man is king! Better though to
speak to someone with two good eyes, and a third eye, the mind, with knowledge
of what is new and what is not. And there is little that is new in this book! So
my recommendation is to read another one, for in the end what it seems to be,
is nothing more than a marketing pitch on the part of an academic lawyer, who
also does consulting work. It is the author’s way of saying look how much I
know.
Being a European, and having worked for nearly 30 years in research
projects involving collaborations among competing companies, I have come to know
something about how to manage and protect Intellectual Property in such
circumstances, as well as the value to be found in such cooperation and how to
achieve that value. I also know that many companies do not know very well,
exactly what is a trade secret, and that often what they think are trade
secrets are not at all. This is the problem with secrets, they are not shared
so what is in fact thought of as a secret may in fact be common knowledge, but
no-one ever discovers this because they are too busy protecting their
non-secrets.
Companies often also do not fully understand what is unique to them,
what is known more widely, and that the best approach to protecting any
uniqueness that comes from owning Intellectual Property (in what ever form that
may come), is to develop more of it, and that this also involves sharing with
others and also giving some of it away! And all this I discovered in the early
1990s, and so did many others.