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The CrowdStrike Outage and Market-Driven Brittleness
The CrowdStrike Outage and Market-Driven Brittleness
Redundancies are unprofitable. Being slow and careful is unprofitable. Being less embedded in and less essential and having less access to the customers’ networks and machines is unprofitable—at least in the short term, by which these companies are measured. This is true for companies like CrowdStrike. It’s also true for CrowdStrike’s customers, who also didn’t have resilience, redundancy, or backup systems in place for failures such as this because they are also an expense that affects short-term profitability.
The market rewards short-term profit-maximizing systems, and doesn’t sufficiently penalize such companies for the impact their mistakes can have. (Stock prices depress only temporarily. Regulatory penalties are minor. Class-action lawsuits settle. Insurance blunts financial losses.) It’s not even clear that the information technology industry could exist in its current form if it had to take into account all the risks such brittleness causes.
The asymmetry of costs is largely due to our complex interdependency on so many systems and technologies, any one of which can cause major failures. Each piece of software depends on dozens of others, typically written by other engineering teams sometimes years earlier on the other side of the planet. Some software systems have not been properly designed to contain the damage caused by a bug or a hack of some key software dependency.
This market force has led to the current global interdependence of systems, far and wide beyond their industry and original scope. It’s why flying planes depends on software that has nothing to do with the avionics. It’s why, in our connected internet-of-things world, we can imagine a similar bad software update resulting in our cars not starting one morning or our refrigerators failing.
Right now, the market incentives in tech are to focus on how things succeed: A company like CrowdStrike provides a key service that checks off required functionality on a compliance checklist, which makes it all about the features that they will deliver when everything is working. That’s exactly backward. We want our technological infrastructure to mimic nature in the way things fail. That will give us deep complexity rather than just surface complexity, and resilience rather than brittleness.
Netflix is famous for its Chaos Monkey tool, which intentionally causes failures to force the systems (and, really, the engineers) to be more resilient. The incentives don’t line up in the short term: It makes it harder for Netflix engineers to do their jobs and more expensive for them to run their systems. Over years, this kind of testing generates more stable systems. But it requires corporate leadership with foresight and a willingness to spend in the short term for possible long-term benefits.
The National Highway Traffic Safety Administration crashes cars to learn what happens to the people inside. But cars are relatively simple, and keeping people safe is straightforward. Software is different. It is diverse, is constantly changing, and has to continually adapt to novel circumstances. We can’t expect that a regulation that mandates a specific list of software crash tests would suffice. Again, security and resilience are achieved through the process by which we fail and fix, not through any specific checklist. Regulation has to codify that process.
·lawfaremedia.org·
The CrowdStrike Outage and Market-Driven Brittleness
How McKinsey Destroyed the Middle Class - The Atlantic
How McKinsey Destroyed the Middle Class - The Atlantic

The rise of management consulting firms like McKinsey played a pivotal role in disempowering the American middle class by promoting corporate restructuring that concentrated power and wealth in the hands of elite managers while stripping middle managers and workers of their decision-making roles, job security, and opportunities for career advancement.

Key topics:

  • Management consulting's role in reshaping corporate America
  • The decline of the middle class and the rise of corporate elitism
  • McKinsey's influence on corporate restructuring and inequality
  • The shift from lifetime employment to precarious jobs
  • The erosion of corporate social responsibility
  • The role of management consulting in perpetuating economic inequality
what consequences has the rise of management consulting had for the organization of American business and the lives of American workers? The answers to these questions put management consultants at the epicenter of economic inequality and the destruction of the American middle class.
Managers do not produce goods or deliver services. Instead, they plan what goods and services a company will provide, and they coordinate the production workers who make the output. Because complex goods and services require much planning and coordination, management (even though it is only indirectly productive) adds a great deal of value. And managers as a class capture much of this value as pay. This makes the question of who gets to be a manager extremely consequential.
In the middle of the last century, management saturated American corporations. Every worker, from the CEO down to production personnel, served partly as a manager, participating in planning and coordination along an unbroken continuum in which each job closely resembled its nearest neighbor.
Even production workers became, on account of lifetime employment and workplace training, functionally the lowest-level managers. They were charged with planning and coordinating the development of their own skills to serve the long-run interests of their employers.
At McDonald’s, Ed Rensi worked his way up from flipping burgers in the 1960s to become CEO. More broadly, a 1952 report by Fortune magazine found that two-thirds of senior executives had more than 20 years’ service at their current companies.
Top executives enjoyed commensurately less control and captured lower incomes. This democratic approach to management compressed the distribution of income and status. In fact, a mid-century study of General Motors published in the Harvard Business Review—completed, in a portent of what was to come, by McKinsey’s Arch Patton—found that from 1939 to 1950, hourly workers’ wages rose roughly three times faster than elite executives’ pay. The management function’s wide diffusion throughout the workforce substantially built the mid-century middle class.
The earliest consultants were engineers who advised factory owners on measuring and improving efficiency at the complex factories required for industrial production. The then-leading firm, Booz Allen, did not achieve annual revenues of $2 million until after the Second World War. McKinsey, which didn’t hire its first Harvard M.B.A. until 1953, retained a diffident and traditional ethos
A new ideal of shareholder primacy, powerfully championed by Milton Friedman in a 1970 New York Times Magazine article entitled “The Social Responsibility of Business is to Increase its Profits,” gave the newly ambitious management consultants a guiding purpose. According to this ideal, in language eventually adopted by the Business Roundtable, “the paramount duty of management and of boards of directors is to the corporation’s stockholders.” During the 1970s, and accelerating into the ’80s and ’90s, the upgraded management consultants pursued this duty by expressly and relentlessly taking aim at the middle managers who had dominated mid-century firms, and whose wages weighed down the bottom line.
Management consultants thus implemented and rationalized a transformation in the American corporation. Companies that had long affirmed express “no layoff” policies now took aim at what the corporate raider Carl Icahn, writing in the The New York Times in the late 1980s, called “corporate bureaucracies” run by “incompetent” and “inbred” middle managers. They downsized in response not to particular business problems but rather to a new managerial ethos and methods; they downsized when profitable as well as when struggling, and during booms as well as busts.
Downsizing was indeed wrenching. When IBM abandoned lifetime employment in the 1990s, local officials asked gun-shop owners around its headquarters to close their stores while employees absorbed the shock.
In some cases, downsized employees have been hired back as subcontractors, with no long-term claim on the companies and no role in running them. When IBM laid off masses of workers in the 1990s, for example, it hired back one in five as consultants. Other corporations were built from scratch on a subcontracting model. The clothing brand United Colors of Benetton has only 1,500 employees but uses 25,000 workers through subcontractors.
Shift from lifetime employment to reliance on outsourced labor; decline in unions
The shift from permanent to precarious jobs continues apace. Buttigieg’s work at McKinsey included an engagement for Blue Cross Blue Shield of Michigan, during a period when it considered cutting up to 1,000 jobs (or 10 percent of its workforce). And the gig economy is just a high-tech generalization of the sub-contractor model. Uber is a more extreme Benetton; it deprives drivers of any role in planning and coordination, and it has literally no corporate hierarchy through which drivers can rise up to join management.
In effect, management consulting is a tool that allows corporations to replace lifetime employees with short-term, part-time, and even subcontracted workers, hired under ever more tightly controlled arrangements, who sell particular skills and even specified outputs, and who manage nothing at all.
the managerial control stripped from middle managers and production workers has been concentrated in a narrow cadre of executives who monopolize planning and coordination. Mid-century, democratic management empowered ordinary workers and disempowered elite executives, so that a bad CEO could do little to harm a company and a good one little to help it.
Whereas at mid-century a typical large-company CEO made 20 times a production worker’s income, today’s CEOs make nearly 300 times as much. In a recent year, the five highest-paid employees of the S&P 1500 (7,500 elite executives overall), obtained income equal to about 10 percent of the total profits of the entire S&P 1500.
as Kiechel put it dryly, “we are not all in this together; some pigs are smarter than other pigs and deserve more money.” Consultants seek, in this way, to legitimate both the job cuts and the explosion of elite pay. Properly understood, the corporate reorganizations were, then, not merely technocratic but ideological.
corporate reorganizations have deprived companies of an internal supply of managerial workers. When restructurings eradicated workplace training and purged the middle rungs of the corporate ladder, they also forced companies to look beyond their walls for managerial talent—to elite colleges, business schools, and (of course) to management-consulting firms. That is to say: The administrative techniques that management consultants invented created a huge demand for precisely the services that the consultants supply.
Consulting, like law school, is an all-purpose status giver—“low in risk and high in reward,” according to the Harvard Crimson. McKinsey also hopes that its meritocratic excellence will legitimate its activities in the eyes of the broader world. Management consulting, Kiechel observed, acquired its power and authority not from “silver-haired industry experience but rather from the brilliance of its ideas and the obvious candlepower of the people explaining them, even if those people were twenty-eight years old.”
A deeper objection to Buttigieg’s association with McKinsey concerns not whom the firm represents but the central role the consulting revolution has played in fueling the enormous economic inequalities that now threaten to turn the United States into a caste society.
Meritocrats like Buttigieg changed not just corporate strategies but also corporate values.
GM may aspire to build good cars; IBM, to make typewriters, computers, and other business machines; and AT&T, to improve communications. Executives who rose up through these companies, on the mid-century model, were embedded in their firms and embraced these values, so that they might even have come to view profits as a salutary side effect of running their businesses well.
When management consulting untethered executives from particular industries or firms and tied them instead to management in general, it also led them to embrace the one thing common to all corporations: making money for shareholders. Executives raised on the new, untethered model of management aim exclusively and directly at profit: their education, their career arc, and their professional role conspire to isolate them from other workers and train them single-mindedly on the bottom line.
American democracy, the left believes, cannot be rejuvenated by persuading elites to deploy their excessive power somehow more benevolently. Instead, it requires breaking the stranglehold that elites have on our economics and politics, and reempowering everyone else.
·archive.is·
How McKinsey Destroyed the Middle Class - The Atlantic
The Man Who Killed Google Search
The Man Who Killed Google Search
The relentless pursuit of growth and revenue by Google's ads and finance teams, led by Prabhakar Raghavan, has compromised the quality and integrity of Google Search, leading to the ouster of Ben Gomes, who prioritized user experience over profits
Under Raghavan, Google has become less reliable, less transparent, and is dominated by search engine optimized aggregators, advertising, and outright spam.
Google is the ultimate essential piece of online infrastructure, just like power lines and water mains are in the physical realm.
In April 2011, the Guardian ran an interview with Raghavan that called him “Yahoo’s secret weapon,” describing his plan to make “rigorous scientific research and practice… to inform Yahoo's business from email to advertising,” and how under then-CEO Carol Bartz, “the focus has shifted to the direct development of new products.” It speaks of Raghavan’s “scientific approach” and his “steady, process-based logic to innovation that is very different to the common perception that ideas and development are more about luck and spontaneity,” a sentence I am only sharing with you because I need you to see how stupid it is, and how specious the tech press’ accolades used to be. This entire article is ridiculous, so utterly vacuous that I’m actually astonished. What about Raghavan’s career made this feel right? How has nobody connected these dots before and said something? Am I insane?
Sundar Pichai, who previously worked at McKinsey — arguably the most morally abhorrent company that has ever existed, having played roles both in the 2008 financial crisis (where it encouraged banks to load up on debt and flawed mortgage-backed securities) and the ongoing opioid crisis, where it effectively advised Purdue Pharma on how to “growth hack” sales of Oxycontin. McKinsey has paid nearly $1bn over several settlements due to its work with Purdue. I’m getting sidetracked, but one last point. McKinsey is actively anti-labor.
·wheresyoured.at·
The Man Who Killed Google Search
Interview with Leo Chang, Staff Designer at Darkroom Studios, on Visual Design
Interview with Leo Chang, Staff Designer at Darkroom Studios, on Visual Design
There are certain design principles you can apply to this like composition, hierarchy, color theory, and so on, but to the regular consumer, it’s the gestalt of all your design decisions that ultimately makes an emotional connection. We know emotion is so much of what drives purchasing behavior so the more nebulous goal of visual design is often pulling those levers in just the right ratio to elicit a desired connection to your product.
ven something as foundational as increasing white space in your design can instantly improve a customer’s perception of your brand’s worth when it’s done intentionally.
almost all clients agree that they need better look and feel in their digital experience, that they are looking to add some type of emotional signal that’s missing. But when it comes time to accept changes that address those problems, I’ve had several instances where clients are resistant to solutions that depart too significantly from what they’re already comfortable with. Usually that reservation is overcome when I correlate the visual changes to the ways in which the user experience is improved and the resulting impact on business performance. There will be also times when a client expresses to us that they’ve never been satisfied with their brand or website and they point to competitors that evoke certain emotional qualities that they are aspiring to capture. In those cases it’s quite rewarding to be able to translate those more nebulous feelings into concrete terminology that gives us specific visual principles to bring in or improve on.
·anthonyhobday.com·
Interview with Leo Chang, Staff Designer at Darkroom Studios, on Visual Design
Reddit API AMA and User Revolt
Reddit API AMA and User Revolt
good roundup of comments about the Reddit API debacle caused by CEO Steve Huffman
Reddit is rumored to have plans to go public, but they need better leadership than the current team. Huffman has shown no leadership skills. He doesn’t know how to read the room. Most importantly, he lacks the social empathy to lead a social platform. Even more disappointing is the lack of comments or intervention from Reddit co-founder Alexis Ohanian, the always chatty — who seems to have advice for every other founder, except for his co-founder. […] In an attempt to monetize the content generated by the community, Huffman forgot that it is the people who make the platform. The community is the platform. It is something the owners of social media platforms forget. […] It happened with MySpace. It has happened with Twitter. It is now happening with Reddit. They never learn from past mistakes. They assume that because they own the platform, they own the community. Every time they forget that important thing, they erode the community’s trust. And once that trust goes, so does the unfettered loyalty. People start looking for options.
I have zero faith in Steve Huffman’s ability to lead Reddit. What kind of chief executive officer posts this comment after a massive community backlash?
closing off 3rd party API access mostly serves an IPO, not OpenAI. If Reddit merely wanted to restrict the ability to scrape its data, they could have done so without killing off clients – e.g. via licensing deals. However, perhaps if access to training data is seen as an elbows-out brawl, I could see how Reddit would be extremely protective of its data. I mean, lyrics websites, map makers, and dictionaries go to great lengths to protect their data. It would not be a giant stretch for Reddit to do so as well.
Huffman is right that, in the end, the whole situation reflects a product problem: the native Reddit apps, both on desktop and on mobile, are ugly and difficult to use. (In particular, I find the nested comments under each post bizarrely difficult to expand or collapse; the tap targets for your fingers are microscopic.) Reddit didn’t really navigate the transition to mobile devices so much as it endured it; it’s little wonder that millions of the service’s power users have sought refuge in third-party apps with more modern designs.
·mjtsai.com·
Reddit API AMA and User Revolt
“I can’t make products just for 41-year-old tech founders”: Airbnb CEO Brian Chesky is taking it back to basics
“I can’t make products just for 41-year-old tech founders”: Airbnb CEO Brian Chesky is taking it back to basics
Of course, you shouldn’t discriminate, but when we say belonging, it has to be more than just inclusion. It has to actually be the proactive manifestation of meeting people, creating connections in friendships. And Jony Ive said, “Well, you need to reframe it. It’s not just about belonging, it’s about human connection and belonging.”And that was, I think, a really big unlock. The next thing Jony Ive said is he created this book for me, a book of his ideas, and the book was called “Beyond Where and When,” and he basically said that Airbnb should shift from beyond where and when to who and what?Who are you and what do you want in your life? And that was a part of the inspiration behind Airbnb categories, that we wanted people to come to Airbnb without a destination in mind and that we could categorize properties not just by location but by what makes them unique, and that really influenced Airbnb categories and some of the stuff we’re doing now.
·theverge.com·
“I can’t make products just for 41-year-old tech founders”: Airbnb CEO Brian Chesky is taking it back to basics
Scaling vs Growth
Scaling vs Growth
We humans are so interconnected to our jobs, admittedly more than we should be. We identify our job with who we are as people. This means that if we are not growing at work or in our business, we feel like we are not growing as people. Growth can, and should be divided. We can both be growing as people and growing as workers or business owners.
Growth at the group level and specifically scaling growth is not good for us as people. The amount of stress and pressure that is undertaken while trying to scale is unhealthy and unsustainable – regardless of what your favorite hustle culture influencer says.We need time, space, and agency to grow at our own paces. We need to be able to get better and worse at things, without being vilified for it.
·tscreativ.substack.com·
Scaling vs Growth
Be good-argument-driven, not data-driven
Be good-argument-driven, not data-driven
An overemphasis on data can harm your culture through two different channels. One is the suspension of disbelief. Metrics are important, says your organization, so you just proceed to introduce metrics in areas where they don’t belong and everybody just ignores the fact that they are meaningless. Two is the streetlight effect. Metrics are important, says the organization, so you encourage your engineers to focus disproportionately on improvements that are easy to measure through metrics - i.e. you focus too much on engagement, growth hacks, small, superficial changes that can be A/B tested, vs. sophisticated, more nuanced improvements whose impact is more meaningful but harder or impossible to measure.
·twitchard.github.io·
Be good-argument-driven, not data-driven
Julianne Moore On Importance Of Art (Vs Business) When Looking To Cinema’s Future – Venice
Julianne Moore On Importance Of Art (Vs Business) When Looking To Cinema’s Future – Venice
Mixed in with seeing Disney movies, at age 10, she discovered John Cassavetes’ Minnie And Moskowitz and thought, “To see that and to say, ‘What’s this world out there and how do I fit in it?’ that to me is the most important part of filmmaking and being in films.
·deadline.com·
Julianne Moore On Importance Of Art (Vs Business) When Looking To Cinema’s Future – Venice
HBO Max And Sesame Street Highlight The Stupidity Of Mindless Media Megamergers
HBO Max And Sesame Street Highlight The Stupidity Of Mindless Media Megamergers
Again, this is just another example of the U.S.’ harmful obsession with megamergers, consolidation, purposeless (outside of stock fluffing) deal making, and growth for growth’s sake. All of these deals make perfect sense to the executives, lawyers, and accounting magicians exploiting them for tax breaks and various financial benefits, but that doesn’t make this whole saga any less preposterously pointless.
·techdirt.com·
HBO Max And Sesame Street Highlight The Stupidity Of Mindless Media Megamergers
A ★½ review of Jurassic World Dominion (2022)
A ★½ review of Jurassic World Dominion (2022)
Whoever is behind the scenes of these movies fails to understand that you can actually make more money by making something that is "good". That making a "good" movie means people will want to watch your movie multiple times and then purchase it again later, and purchase more tickets, and purchase the streaming service with your movie, and purchase the box-set with your movie.
There are three ways you could make a film like this, and make it somewhat "good", whatever that term may mean. You could:A) Make a good movie. Make a movie that is artistically fulfilling, filled to the brim with interesting themes and ideas, passionate craftwork, talented artistry. Something that makes people proud that they went to the movies.B) Make a good Jurassic Park/World movie. Make something that builds on the source material before it in an interesting way and gives itself a purpose to exist in the first place outside of being just a cash cow. Something that makes people proud to be a fan of the franchise.C) Make a good dinosaur movie. Just show a bunch of fucking dinosaurs crashing into each other. Something stupid but ultimately fun. Something that makes people proud to have eyes and ears so that they can see something cool.
·letterboxd.com·
A ★½ review of Jurassic World Dominion (2022)