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Sunday, 15 June 2014

Talent Wants to be Free

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.

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