Technology

The Monopoly Curse: Bad Management at Google

Dissident artist Sabo’s work

The recent Google news will be reviewed in another post soon. The Damore Google Memo affair, in which management threw a high-level employee under the bus for wrongthink and thereby assisted in damaging Google’s image of political neutrality among a large share of the population, is another sign that their management has been made stupid by the easy profits of its monopoly on search and near-monopoly on advertising. With the initial corporate motto of “Don’t Be Evil,” the company had built its business on the trust of its billions of users, who had came to believe the company would not abuse its power by manipulating its search results or targeting advertising by scanning private email and search terms. That trust is being rapidly eroded by an increasingly careless management.

The story presented in most media:

White male engineer James Damore blasts fellow employees with email alleging females can’t be good software engineers. This makes women and minorities at Google feel unsafe, so in order to support a diverse work environment, management wisely fired him. They should have done it sooner, and should also fire every employee who didn’t condemn him.

The more complicated, true story:

Geeky science guy James Damore, who left a PhD program in evolutionary biology to join Google, wrote a memo circulated internally in a group set up by Google for diversity discussion. He used stats and studies to argue for changes to diversity programs to more effectively recruit women, who he argued were not choosing to be software engineers in large enough numbers to increase their representation at Google. Much internal discussion, then a group of offended — who turned his words into “women are unfit to program at Google” — started emailing management asking that he be fired. When that didn’t work, they leaked his memo to Gizmodo, which ran it without cites and labeled it an “anti-diversity screed” (pre-slandering him because it really wasn’t, it was more tactless but well-meaning.) Outrage and Twitter mobs descended, more leaks revealed managers keeping internal blacklists and employees threatening to leave unless he was fired, employees asking for everyone who supported his memo to be fired as well. Threats and doxxing all around, employees not getting work done while they had emotional breakdowns or spent all day engaged online.

In other words, a really bad week for Google. Meanwhile at Apple, everyone knows taking internal business outside via leaks is a firing offense. This kind of emo firestorm is much less likely where employees haven’t been told over and over again they’re the most perfect snowflakes on the planet and they can do as much online activism as they want since they have no lives outside Google, the free food, the 60-hour weeks, the relentless pressure to conform that comes from having only below-30s on a campus without deeper knowledge.

Why did management abandon their commitment (even restated in the announcement of Damore’s firing) to free expression? Because the company was already under attack by activists for supposed equal pay violations, with the EEOC asking for an unprecedented level of disclosure of employee salary information and data. Stepped-up efforts to increase the ratio of women and minorities had already failed to do much (other than filling the ranks with progressive activists from academia), while straying across the line of illegal discrimination against others, as alleged by Damore’s memo. And meanwhile, a class-action lawsuit seeking damages for Google’s long and well-documented history of discrimination against older applicants continues to make its way through the courts.

Having employees leak internal emails to outside journalists to gain external allies in their disputes had already damaged the company’s image, and the firing doubled down on that by illustrating just how easily management would bow to activists. If they cave so easily, how long before they allow private customer data to be used against their own customers to satisfy governments and intelligence agencies? Many suspect they already have.

The resource curse is the observation that countries blessed with lots of natural resources like oil or minerals have a tendency to waste that endowment, through mediocre and corrupt administration. The politicians of such countries tend to use the easy revenues to maintain repressive regimes while making family and friends incredibly wealthy. The payoffs to residents raise incomes, prices, and currency exchange rates, making it hard for other kinds of economic activity to survive in the territory of the regime. This becomes most noticeable when the resource revenues begin to decrease and the hollowed-out local economy collapses, as in Venezuela or for a less extreme example, Saudi Arabia.

But companies can have the analogous problem. Blessed by a near-monopoly in some market because of network effects or patent protections, the company can lose its competitiveness. Its management can’t easily help or harm the monopoly revenue stream, but can easily create the appearance of activity by investing in many other areas and buying back its own stock, which keeps its value high and avoids stockholder complaints and attacks by dissident investors. When the fountain of monopoly revenues is suddenly reduced by new technology or the appearance of a disruptive competitor, what appeared to be an unassailable position can start to crumble, laying bare the malinvestment of decades of revenues.

The article “Microsoft, Amazon and the ‘Resource Curse'” at Crash/Dev of April 4, 2013, describes the “resource curse” at Microsoft and calls out Google as a likely future sufferer:

Microsoft could be the tech industry poster child for the resource curse — a company seemingly blessed with a massively profitable and “sticky” core franchise (Windows + Office), but that has failed for over a decade to deploy that wealth productively in support of new initiatives.

Even the way the company prosecutes innovation — dumping billions into late-mover attempts to imitate industry leaders (Apple and Google most notably), or grossly overpaying for “strategic” acquisitions that somehow fail to thrive post-deal (e.g., Avenue A / Aquantive, Skype, Yammer) — seems to reflect a misplaced faith in overwhelming force over persistent excellence as the decisive factor in any given strategic battle….

P.S. — Google is the next in line to suffer from the resource curse — their core search advertising franchise is the magic cash machine that feeds their culture of abundance — but so far they’ve done a better job of deploying that cash against genuine innovation that matters (Gmail, Google Maps, Android, Google Docs) than Microsoft. Only time will tell, but the realist in me thinks that the resource curse will eventually erode that culture’s competence from the inside out no matter how well the leaders play their cards.

Steve Jobs was right when he said “stay hungry, stay foolish” — too much of a good thing never turns out well.

Recently this problem has been made worse by what had previously been seen as a European-style abuse, the use of nonvoting stock classes to allow small groups or families to control big companies without holding the majority of equity. This kind of structure concentrates control with insiders, which works well enough and has some advantages when the insiders are especially good managers. The downside, of course, is that insiders rarely stay good for the life of a firm. There’s a reason most growth companies eventually put their founders aside, as long-term, mature businesses need a different set of skills than startups and young growth companies, and the two are rarely combined in the same people. Studies show companies with dual-class shares tend to perform poorly, with many looted by insiders, and that a better arrangement would give insiders nonvoting shares to reduce the corrupt feedback loop of insider control of the board that results when voting shares are mostly held by insiders.

Google’s ownership structure is especially problematic:

The new Class C shares have no voting rights. The Class A shares have one vote each, but collectively those votes are dwarfed by the 10-votes-per-share Class B shares. Those shares, which do not trade in the public market, are owned by Google insiders, who will also get Class C shares in the distribution.

As originally proposed by the company, the move would have made it easy for Google’s founders, Larry Page and Sergey Brin, and the chairman, Eric E. Schmidt, to cash in a large part of their holdings without giving up their voting control. But that ability has been limited after the company settled a class action suit filed by angry (Class A) shareholders, and reached agreements with the three top officials to limit their sales.

In essence, for every share of Class C they sell, they must also convert one Class B share into Class A. Presumably they will sell that share as well. So their voting rights will fall as they would have under the old structure, when they would have converted Class B shares into Class A shares before selling them.

But Google is expected to issue primarily Class C shares in the future, for acquisitions and in grants of share options. So the total number of votes will not be rising, and that will delay the day when the company’s leaders lose voting control of the company. Currently they own less than 16 percent of the company’s shares, and have 61 percent of the votes.

This structure has left Sergey Brin and Larry Page as founders, along with Eric Schmidt the politically-minded CEO, in control of Alphabet, parent of Google and Youtube. It appears from a Recode report on the internal meeting where management decided to fire Damore that Youtube CEO Susan Wojcicki, former sister-in-law of Sergey Brin, was instrumental in arguing for his termination against free speech advocates in management:

It’s a split reflected at the very top of Google’s owner, Alphabet, where its top lawyer, David Drummond, has been one of the most vocal advocates of free speech over the years. As an Alphabet exec, he was not part of Monday’s decision-making meeting.

Meanwhile, another longtime Google leader, YouTube CEO Susan Wojcicki, who was at the meeting, penned her own essay that appeared in Fortune this week, with an opposite take.

“While people may have a right to express their beliefs in public, that does not mean companies cannot take action when women are subjected to comments that perpetuate negative stereotypes about them based on their gender,” she wrote. “Every day, companies take action against employees who make unlawful statements about co-workers, or create hostile work environments.” …

Family and friends of the founders, it appears, bring their personal hobbyhorses to work at Google. The investors who have disfavored classes of shares are left holding the bag.

But there’s more evidence of management inattention to business. The same issues were seen at Microsoft, which blew near-monopoly profits in Windows and Office on a series of failures and spent a decade investing unwisely in other areas. Google appears to be similarly failing to invest wisely, and inattention to costs and employee productivity is apparent in the phenomenon of “rest and vest” — engineers given little oversight and delivering little work product when the company fails to manage them effectively or has bureaucratic reasons to keep them idle. In the article “Tech workers are sending this ‘Silicon Valley’ star some surprising pictures from their offices,” by Melia Robinson, Business Insider, Aug. 24, 2016:

Actor Josh Brener, who plays Big Head on “Silicon Valley,” has no doubt there are tech workers living out his character’s storyline. The proof is on his phone.

“Since the show has been on, I’ve actually had a number of people — including today at Google X — I’ve had people send me pictures of themselves on a roof, kicking back doing nothing, with the hashtag ‘unassigned’ or ‘rest and vest,'” Brener told Business Insider. “It’s something that really happens, and apparently, somewhat often.”

Management also seems to not only tolerate but encourage employee political activity and activism during work hours — and since Google intentionally erases the line between work and nonwork hours to as much as possible keep its young employees on campus or doing work remotely, many young employees don’t see any distinction between the professional and personal. Use of hours and company resources in approved political causes is common, and the young activists can be forgiven if they believed their work for social justice allowed them to leak inside communications to recruit outside allies to force the company to fire Damore — how would they know otherwise, since all their internal and external campaigning on behalf of Black Lives Matter, LGBTQ causes, and progressive politicians was accepted without rebuke? The problem is that only some points of view were so tolerated, while others, as pointed out by Damore, were stifled and punished.

And the results of Google’s investment of near-monopoly profits in new business segments aren’t especially promising despite the excellent PR they’ve had. Ventures in phone software (Android) and media sales (Google Play) are inferior and despite great market impact, generate little revenue. Self-driving cars are the wave of the future, but there’s no sign Google will ever make much money from its pioneering investments. The first quarterly income report breaking out business by segments shows the problem:

For the first time in Google’s history, we finally have an idea of how those side projects—self-driving cars, Nest thermostats, attempts at defeating death, etc.—actually perform. And unsurprisingly, they’re bleeding a lot of money.

Alphabet, Google’s new parent company, reported its earnings today (Feb. 1) and revealed that its “Other Bets“—a bucket that includes Google Fiber, Calico, Nest, Verily (formerly Google Life Sciences), Google Ventures, Google Capital, and Google X—had an operating loss of $3.57 billion in 2015. These speculative, “moonshot”-type businesses generated $448 million in annual revenue, up 37% from the previous year, but the reported loss was 83% wider.

https://www.theatlas.com/javascripts/atlas.js

Google’s dominance in search and advertising will most likely continue, but the number of people who question whether that is dangerous to freedom of expression and privacy leaped enormously because of this episode — I was personally happy to trust them with my email and docs until now but will find alternatives where practical.

Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations, in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat…. It is time to turn the tide against this madness and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

More reading:

“High Tech Under Diversity Pressure
Ban the Box, Credit Scores, Current Salaries: The Road to Hiring Blind
HireVue, Video Interviews, and AI Job Searches
“Death by HR” – Diversity Programs Don’t Work

“Death by HR” – High Tech Threatened by Social Justice Activists

Fantasy Gains from Inclusion (Intel Corporation)

But pressure to hire more minorities and women in tech has existed at least since Jesse Jackson’s first run at it in 1999.[1] Why is resistance crumbling almost twenty years later?

First, today’s high tech is more software than hardware, with a new generation of executives more willing to appease the activists. Most people in the industry want to be sure women and minorities are fairly treated and feel welcomed, and the networked activists can quickly trash your public image if you cross them. So appeasing donations and lip service are the most common responses by today’s execs.

Another new factor is the hardcore third-wave feminists and “critical race theory”-trained products of academia that are making activism their life’s work. Many college students are adopting the victim culture and identities as protectors of the weak—women, plus transgender and all the other flavors of other. These newer, mostly upper-class-academic activists are besieging the older engineer-dominated companies as well as the new software giants. The culture wars, where activists infiltrate one cultural area after another then try to demonize and expel any conservatives that remain, have reached the gates of high tech.

“Gamergate” was a skirmish in the culture war; computer gaming companies with corrupt relationships to game-reviewing magazines and sites came under fire from gamers, and a full-scale battle between social justice activists and gamers who wanted their games built for fun and not political correctness began. There were well-publicized nasty trolling tactics on all sides (though the activists had more friends in the media to promote their story), and at one point the gamergaters persuaded many advertisers to cancel ads in the offending publications. Intel cancelled some of their ad support, then was subjected to activist attacks. To defuse the issue, Intel pledged $300 million to activist groups.[2] Shortly thereafter, Intel cancelled its sponsorship of the (merit-based) Science Talent Search and cut budgets in research and administration by… $300 million.[3]

Online swarming now results in censorship of speech disagreeing with these activists. One article was withdrawn by Forbes online after activist swarming because it denied that diversity in high tech was a problem. This was an instance of kafkatrapping, a mechanism for repressing all contrary thought by labelling anyone who speaks it as racist, sexist, or homophobic — your denial of base motives for disagreement with the activist point of view means you are what you deny, and your speech is hate speech to be suppressed.[4] Badthink must be stamped out so that Goodthink will prevail. The article in question was so extreme:

Repeat after me: there is no “diversity crisis” in Silicon Valley. None. In fact, there is no crisis at all in Silicon Valley. Silicon Valley is doing absolutely gangbusters. Apple has $200 billion in cash reserves and equivalents—and a market valuation of about $630 billion. Amazing. Facebook now garners a billion daily users. This is a nearly unfathomable number. Google is worth nearly $450 billion and has $70 billion in cash on hand.

This is not a crisis. Silicon Valley is swimming in money and in success. Uber is valued at around $50 billion. Companies like Airbnb are remaking travel and lodging. Intel is moving forward into the global Internet of Things market. South Korea’s Samsung just opened a giant R&D facility in the heart of Silicon Valley. Google and Facebook are working to connect the entire world. Netflix is re-making how we consume entertainment.

Silicon Valley is home to the next phase of the global auto industry. Fintech and biotech are transforming banking and medicine. The success of Silicon Valley is not due to diversity—or to any bias. Rather, to brilliance, hard work, risk taking, big ideas and money.

Want to be part of this? Great! Follow the example of the millions who came before you. Their parents made school a priority. They took math and science classes, and did their homework every night. They practiced ACT tests over and over. They enrolled in good schools… They took computer programming, engineering, chemistry—hard subjects that demand hard work. They then left their home, their family, their community, and moved to Silicon Valley. They worked hard, staying late night after night. They didn’t blog, they didn’t let their skills go stale, they didn’t blame others when not everything worked out exactly as hoped….

From all over the world, from Brazil and Canada, Nigeria, Pakistan, Russia, Norway, Egypt, fellow humans come to Silicon Valley to work, create, succeed. And they do. Silicon Valley is extremely diverse.

Of course, the iPhone wasn’t created because of diversity. Nor was Google. Nor Facebook, nor the computer chip, nor the touchscreen. They were created because a small band of super-smart people who worked very hard to create something better than existed before….

Silicon Valley doesn’t just create greatness, it’s probably the most open, welcoming, meritocratic-based region on the planet. Anecdotal evidence strongly suggests that disproportionately more Chinese, Indians, and LGBQT succeed in Silicon Valley than just about any place in America. Guess what? Everyone earned their job because of their big brains and ability to contribute.

Is that you? Then come here! It’s an amazingly inclusive place.

But be sure to bring your computer science degree, your engineering degree, your proven set of accomplishments. Be sure you are prepared to sacrifice “fun” for long hours and hard work. Offer proof of how well you did in school, in math, in physics. These matter dearly as they are fundamental to what makes Silicon Valley succeed.

Silicon Valley is not perfect. It’s certainly no utopia. But if you aren’t able to make it here, it’s almost certainly not because of any bias. Rather, on your refusal to put in the hard work in the hard classes, and to accept all the failures that happen before you achieve any amazing success….[5]

The coiner of the term kafkatrapping, Eric S. Raymond, was a pioneer in open-source development, where widely-dispersed programmers working together build a software project which is free to use, change, or incorporate into larger systems. One of the earliest and most famous of such projects was Linux, an open-source version of Unix originated by Linus Torvalds. Open-source projects have been infiltrated by online activists and “codes of conduct” that let them expel less politically-sensitive participants have been added. Linus himself was threatened by the activists.[6]

Another example of the activist entryists’ pressure tactics from Raymond’s blog (emphasis added):

The hacker culture, and STEM in general, are under ideological attack. Recently I blogged a safety warning that according to a source I consider reliable, a “women in tech” pressure group has made multiple efforts to set Linus Torvalds up for a sexual assault accusation. I interpreted this as an attempt to beat the hacker culture into political pliability, and advised anyone in a leadership position to beware of similar attempts.

Now comes Roberto Rosario of the Django Software Foundation. Django is a web development framework that is a flourishing and well-respected part of the ecology around the of the Python language. On October 29th 2015 he reported that someone posting as ‘djangoconcardiff’ opened an issue against pull request #176 on ‘awesome-django’, addressing it to Rosario. This was the first paragraph.

Hi, great project!! I have one observation and a suggestion. I noticed that you have rejected some pull requests to add some good django libraries and that the people submitting thsoe pull requests are POCs (People of Colour). As a suggestion I recommend adopting the Contributor Code of Conduct (http://contributor-covenant.org) to ensure everyone’s contributions are accepted regarless [sic] of their sex, sexual orientation, skin color, religion, height, place of origin, etc. etc. etc. As a white straight male and lead of this trending repository, your adoption of this Code of Conduct will send a loud and clear message that inclusion is a primary objective of the Django community and of the software development community in general. D.

The slippery, Newspeak-like quality of djangoconcardiff’s “suggestion” makes it hard to pin down from the text itself whether he/she is merely stumping for inclusiveness or insinuating that rejection of pull requests by “persons of color” is itself evidence of racism and thoughtcrime.

But, if you think you’re reading that ‘djangoconcardiff’ considers acceptance of pull requests putatively from “persons of color” to be politically mandatory, a look at the Contributor Covenant he/she advocates will do nothing to dissuade you. Paragraph 2 denounces the “pervasive cult of meritocracy”. [Update: The explicit language has since been removed. The intention rather obviously remains]

It is clear that djangoconcardiff and the author of the Covenant (self-described transgender feminist Coraline Ada Ehmke) want to replace the “cult of meritocracy” with something else. And equally clear that what they want to replace it with is racial and sexual identity politics.

Rosario tagged his Twitter report “Social Justice in action!” He knows who these people are: SJWs, “Social Justice Warriors”. And, unless you have been living under a rock, so do you. These are the people – the political and doctrinal tendency, united if in no other way by an elaborate shared jargon and a seething hatred of [the]“white straight male”, who recently hounded Nobel laureate Tim Hunt out of his job with a fraudulent accusation of sexist remarks.

I’m not going to analyze SJW ideology here except to point out, again, why the hacker culture must consider anyone who holds it an enemy. This is because we must be a cult of meritocracy. We must constantly demand merit – performance, intelligence, dedication, and technical excellence – of ourselves and each other.

Now that the Internet—the hacker culture’s creation!—is everywhere, and civilization is increasingly software-dependent, we have a duty, the duty I wrote about in Holding Up The Sky. The invisible gears have to turn. The shared software infrastructure of civilization has to work, or economies will seize up and people will die. And for large sections of that infrastructure, it’s on us—us!—to keep it working. Because nobody else is going to step up.

We dare not give less than our best. If we fall away from meritocracy—if we allow the SJWs to remake us as they wish, into a hell-pit of competitive grievance-mongering and political favoritism for the designated victim group of the week—we will betray not only what is best in our own traditions but the entire civilization that we serve.

This isn’t about women in tech, or minorities in tech, or gays in tech. The hacker culture’s norm about inclusion is clear: anybody who can pull the freight is welcome, and twitching about things like skin color or shape of genitalia or what thing you like to stick into what thing is beyond wrong into silly. This is about whether we will allow “diversity” issues to be used as wedges to fracture our community, degrade the quality of our work, and draw us away from our duty.

When hackers fail our own standards of meritocracy, as we sometimes do, it’s up to us to fix it from within our own tradition: judge by the work alone, you are what you do, shut up and show us the code. A movement whose favored tools include the rage mob, the dox, and faked incidents of bigotry is not morally competent to judge us or instruct us.

I have been participating in and running open-source projects for a quarter-century. In all that time I never had to know or care whether my fellow contributors were white, black, male, female, straight, gay, or from the planet Mars, only whether their code was good. The SJWs want to make me care; they want to make all of us obsess about this, to the point of having quotas and struggle sessions and what amounts to political officers threatening us if we are insufficiently “diverse”.

Think I’m exaggerating? Read the whole djangoconcardiff thread. What’s there is totalitarianism in miniature: ideology is everything, merit counts for nothing against the suppression of thoughtcrime, and politics is conducted by naked intimidation against any who refuse to conform. Near the end of the conversation djangoconcardiff threatens to denounce Rosario to the board of the Django Software Foundation in the confused, illiterate, vicious idiom of an orc or a stormtrooper.

It has been suggested that djangoconcardiff might be a troll emulating an SJW, and we should thus take him less seriously. The problem with this idea is that no SJW disclaimed him–more generally, that “Social Justice” has reached a sort of Poe’s Law singularity at which the behavior of trolls and true believers becomes indistinguishable even to each other, and has the same emergent effects.

In the future, the hacker whose community standing the SJWs threaten could be you. The SJWs talk ‘diversity’ but like all totalitarians they measure success only by total ideological surrender – repeating their duckspeak, denouncing others for insufficient political correctness, loving Big Brother. Not being a straight white male won’t save you either – Roberto Rosario is an Afro-Hispanic Puerto Rican.

We must cast these would-be totalitarians out–refuse to admit them on any level except by evaluating on pure technical merit whatever code patches they submit. We must refuse to let them judge us, and learn to recognize their thought-stopping jargon and kafkatraps as a clue that there is no point in arguing with them and the only sane course is to disengage. We can’t fix what’s broken about the SJWs; we can, and must, refuse to let them break us.[7]

Raymond’s post is the distilled essence of commitment to engineering excellence and equal opportunity. His opponents are the people trying to tear down standards and replace them with identity politics, tribalists who don’t understand how to make the pie but want to get pieces for their friends.

Victim culture identity politics is a US-centric movement promoting narrower and narrower minorities as victims. The earlier Jesse Jackson-style affirmative action movement was supposed to get blacks and women into higher-paying, powerful positions in tech — but most tech companies are worldwide in scope and hiring, and it makes little sense for them to represent local population distributions. Silicon Valley is much more top-heavy with Asians than with white males:

[Most articles on tech diversity say] the biggest tech companies in Silicon Valley are overwhelmingly white and male. While blacks and Latinos comprise 28 percent of the US workforce, they make up just 6 percent of Twitter’s total US workforce and six percent of Facebook employees.

Of course this is just a lie. Very few people would say a workforce that is 50 to 60 percent white, true of both Google and Microsoft, is “overwhelmingly white.” In fact, it’s less non-Hispanic white than the US labor force as a whole. I’ve linked to statistics in this very piece. They take about 10 seconds of browsing search queries to understand this.

But you don’t need to know statistics. Eat at a Google cafeteria. Or walk around the streets of Cupertino. There is no way that one can characterize Silicon Valley as overwhelmingly white with a straight face. Silicon Valley is quite diverse. The diversity just happens to represent the half of the human race with origins in the swath of territory between India and then east and north up to Korea.

The diversity problem isn’t about lack of diversity. It is about the right kind of diversity for a particular socio-political narrative. That’s fine, but I really wish there wasn’t this tendency to lie about the major obstacle here: people of Asian origin are 5% of the American work force, but north of 30% in much of the Valley. If you want more underrepresented minorities hiring fewer of these people would certainly help. In particular the inflow of numerous international talent coming from India and China could be staunched by changes to immigration law.

But these are international companies. Though they genuflect to diversity in the American sense (blacks and Latinos), ultimately they’ll engage in nominal symbolic tokenism while they continue on with business, with an increasingly ethnically Asian workforce and and increasingly Asian economic focus. Meanwhile, the press will continue to present a false caricature of a white workforce because that’s a lot more of a palatable bogeyman than Asian Americans and international tech migrants, and the liberal reading public seems to prefer the false narrative to engaging with reality.[8]

Money and power are being created by disciplined, organized hard work in one of the few US-based growth industries left, the connected computers that make up the Internet and allow cellphone apps to do the world’s business. Political parasites are trying very hard to gain entry and position themselves to feed from the resources others generated. While it may seem harmless to throw activists a bone—and Silicon Valley really does want more excellent minorities and women!—feeding the activists only lets them gather more allies to return to demand more. And when they gain power, all of us lose.

[1] “Jesse’s New Target: Silicon Valley,” by Roger O Crockett, Bloomberg, July 11, 1999. http://www.bloomberg.com/news/articles/1999-07-11/jesses-new-target-silicon-valley
[2] “Intel pledges $300 million to improve diversity in tech,” by Andrew Cunningham, January 6, 2015. http://arstechnica.com/business/2015/01/intel-pledges-300-million-to-improve-diversity-in-tech/
[3] “Intel plans job cuts across the company, internal memo says,” by Mike Rogoway, The Oregonian, June 4, 2015. http://www.oregonlive.com/silicon-forest/index.ssf/2015/06/intel_facing_disappointing_sal.html
[4] “Kafkatrapping,” by Eric Raymond, Armed and Dangerous, July 18, 2010. ““Your refusal to acknowledge that you are guilty of {sin, racism, sexism, homophobia, oppression…} confirms that you are guilty of {sin, racism, sexism, homophobia, oppression…}.” http://esr.ibiblio.org/?p=2122
[5] “There Is No Diversity Crisis in Tech,” by Brian Hall, censored at Forbes online but republished by Techraptor.net, October 7, 2015. https://techraptor.net/content/there-is-no-diversity-crisis-in-tech-by-brian-hall
[6] “From kafkatrap to honeytrap,” by Eric Raymond, Armed and Dangerous, November 3, 2015. http://esr.ibiblio.org/?p=6907
[7] “Why Hackers Must Eject the SJWs,” by Eric S. Raymond, Armed and Dangerous, November 13, 2015. http://esr.ibiblio.org/?p=6918
[8] “Silicon Valley Has an Asian-people Problem,” by Razib Khan, The Unz Review, February 6, 2016. http://www.unz.com/gnxp/silicon-valley-has-an-asian-people-problem/

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

More reading on other topics:

The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

“Death by HR” – High Tech Under Diversity Pressure

Jesse Jackson at Intel – photo Recode/PushTECH2020

[An abridged chapter from Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The culture difference between HR staff and the rest of the workforce causes problems in many industries, but it’s worst in high tech. While successful companies like Apple, Google, and Facebook started their HR departments with technology-savvy people, even they eventually succumbed to the bureaucratic disease — with newer HR staff more similar to the risk-averse, non-business-oriented sorts seen elsewhere. It takes constant CEO attention to keep HR from drifting toward bureaucratic focus on process and not results.

Bob Cringely has been observing and writing about the PC world since early days, with his “Notes From the Field” column in InfoWorld from 1987 to 1995, and a now-dated but still historically interesting book, Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date. His article “The Enemy in HR” gets directly to the heart of the problem of HR in Silicon Valley. He starts off wondering why companies claim there’s a shortage of IT workers requiring large numbers of foreign workers to be admitted under H1-B visas to fill the need, while at the same time hundreds of thousands of (mostly male, mostly older, experienced) unemployed IT workers can’t get an interview. What could it be? He states the basic thesis of this book in a few paragraphs:

…we can start by blaming the Human Resources (HR) departments at big and even medium-sized companies. HR does the hiring and firing or at least handles the paperwork for hiring and firing. HR hires headhunters to find IT talent or advertises and finds that talent itself. If you are an IT professional in a company of almost any size that has an HR department, go down there sometime and ask about their professional qualifications. What made them qualified to hire you?

You’ll find the departments are predominantly staffed with women and few, if any, of those women have technical degrees. They are hiring predominantly male candidates for positions whose duties they typically don’t understand. Those HR folks, if put on the spot, will point out that the final decision on all technical hires comes from the IT department, itself. All HR does is facilitate.

Not really. What HR does is filter. They see as an important part of their job finding the very best candidates for every technical position. But how do you qualify candidates if you don’t know what you are talking about? They use heuristics—sorting techniques designed to get good candidates without really knowing good from bad.

Common heuristic techniques for hiring IT professionals include looking for graduates of top university programs and for people currently working in similar positions at comparable companies including competitors. The flip side of these techniques also applies—not looking for graduates of less prestigious universities or the unemployed.[1]

Software and hardware engineering work is as far from liberal arts-communications-psychology as it is possible to be, revolving around hard math, heavy-duty abstract reasoning, and specialized language often impenetrable to outsiders. So typical HR staff don’t understand the work or the distinguishing characteristics of the most productive workers in the field. A software genius may be inattentive to details of personal hygiene — and the HR staffer who interviews him may conclude from his smell that he’s sloppy and undisciplined, and will cause interpersonal issues. Many of the best have Asperger’s Syndrome, which could be summed up as deep focus on order and details of problem domains while lacking abilities to communicate or sense the feeling of others through the normal signalling.[2] These are the people who get into trouble with modern feminists because they are clumsy and will continue to crudely pursue sexual come-ons when a woman has signalled disinterest; they are no more likely than anyone else to sexually assault a woman, but modern feminists believe unwanted attention from a male is tantamount to sexual assault — if it makes someone uncomfortable, it should be a firing offense. Female HR staff are likely to find such men unattractive and screen them out as not fitting in.

Meanwhile, hiring managers are more likely to understand the type, and that careful management — hiding the socially-inept from customers and outsiders, and feeding them the hardest problems to solve — can make these people a key strength for the organization. It may become necessary for executive management to make it clear to HR that Asperger’s (under the current DSM-5 terminology, a form of Autism Spectrum Disorder[3]) is a recognized disability and that the Americans with Disabilities Act (ADA) requires employers to provide these disabled men with “reasonable accommodations” — special treatment recognizing that they need support to be effective workers with their disability. This puts HR staff on notice that they would be violating the law if they continue to discriminate against the apparently insensitive, overly-focused males the company badly needs to do the most difficult programming jobs!

That warning in place, HR staff will come to see both easily-offended women and socially-obtuse men as victims to be protected. Which would be an improvement over current practice, where a few complaints of bad behavior can get a man fired when no actual malice or assault was intended. Everyone in the workplace should feel safe from sexual pressure and physical assault, but not to the point where perceived rudeness or insensitivity gets you fired, or some of the industry’s best workers will be exiled.

Silicon Valley is a magnet for technologists from around the world, and the resulting engineering workforce is skewed toward men, Asians, Indians, and a scattering of Europeans all attracted by the prospect of working with the world’s best people for some of the world’s highest rewards. Early on, PC and microprocessor companies resembled the defense contractors of the Valley, mostly white male engineering staff and more diverse support staff. As engineers from elsewhere moved to take jobs in the Valley, they brought wives and family, and many of the wives began work in support positions like accounting and HR. Today, despite all their efforts to recruit more women and minorities, an exemplary company like Apple reports their engineering staff is still 77% male[4], and that includes a lot of less focused, more routine positions like release management and QA testing support which usually have more women. Meanwhile, overall diversity numbers have been improved by hiring more women and minorities in support, sales, and HR.

Silicon Valley continues to passively resist pressures to hire based on diversity goals rather than competence. Management understands that engineering excellence can’t be compromised away without destroying their company’s competitive edge, and promotes diversity recruitment efforts to find capable minorities for core engineering work as well as secondary roles like testing and maintenance the best engineers find unexciting. And still the resulting numbers fail to come close to the US population’s minority percentages, with Asians, whites, and males over-represented. So the pressure continues:

Two years ago, the Rev. Jesse Jackson set his sights on Silicon Valley. He promised to push tech companies and venture capital firms to prioritize diversity and inclusion, and to add more employees from historically underrepresented groups like women and people of color.

But the progress he’d hoped for hasn’t happened yet, and Jackson is growing restless. On Friday, as Jackson’s Rainbow Push Coalition held a conference in San Francisco where industry leaders joined local groups and activists to discuss diversity, Silicon Valley and what new initiatives may help close the gap. The Rainbow Push Coalition also introduced several programs of its own. Hire and Invest Oakland, aimed at engaging tech companies based in or moving into the East Bay, would encourage companies like Pandora and Uber to work with local organizations when hiring workers and looking for merchants. Several such Oakland organizations were on hand Friday to make their presence known to tech leaders.

“You would think companies that have been around for a while, since the 1990s, would not be where they are when it comes to diversity because they’ve had time to catch up,” Jackson said. “But the good news is there’s time now to catch up, and it will open up a whole new world of opportunity.”

…Pressure to boost diversity at tech companies and remain publicly accountable by disclosure of companies’ personnel data has grown over the past several years. Several firms—including Airbnb, Dropbox, Pinterest, Twitter and Yelp—even hired individuals to oversee and coordinate diversity efforts. Others have begun offering implicit-bias training to their employees or broadening their corporate definition of diversity to include intersectional identities—how various attributes combine to create unique experiences for certain people. Earlier this year, group-chat company Slack updated its diversity report to include more intersectional data on women of color and LGBT people.

Intel CEO Brian Krzanich, who announced last year that the company would improve its diversity to reflect the percentage of women and underrepresented minorities in the United States by 2020, and pledged $300 million to aid in the effort, acknowledged at the Rainbow Push conference Friday that the company has received criticism for its outspoken commitment to diversity, according to reports.

“There’s no reason why there cannot be a change now,” Jackson said. “When I think about this culture of exclusion and how unchallenged it has been for so long—we need to end that. There’s responsibility at every level, and we all need to apply social pressure to change things because this is the future: America cannot improve without fully realizing its assets. Imagine baseball without Jackie Robinson. That’s where we are.”[5]

Or imagine fashion design firms required to recruit straight men, or basketball teams required to include more Asians. There are many excellent female and minority engineers, but for a wide variety of cultural and possibly innate reasons, there are not as many as you would expect if talent and interest in the field was uniformly distributed through the population. Decades of special efforts to promote STEM studies and careers for women and minorities has done about as much as is possible to encourage those who want to succeed in it. Forcing equal representation means forcing less qualified, less accomplished employees on some of our key technology leaders, damaging their ability to stay ahead of overseas competition.

Note in the story quoted above the payoffs made to affiliates of Jesse Jackson’s PUSH and minority nonprofit organizations. Activists have learned to make their daily bread by threatening boycotts and lawsuits, then accepting instead payoffs to keep their paychecks going while they pretend to work on the never-ending problems they claim they want to fix. The extortionate style relies on threats of public shaming and political difficulties if targeted companies don’t meet his demands:

The responses [to Jesse Jackson’s PUSH efforts] by these information technology leaders could have been predicted. Management at eBay had nothing overt to say, which amounts to tacit agreement. More telling was the response by Google. In exchange for Jackson’s demand for the company to release employee demographic data on its U.S. work force, David Drummond, chief legal officer (who, like Jackson, is black), promised that his company would release the numbers. He didn’t take very long to deliver. Yesterday, the company issued a report on workforce diversity showing about 60 percent of Google employees are white and 30 percent are Asian (apparently not all racial minorities arouse Jackson’s sympathies). Laszlo Bock, Google’s senior vice president for public relations, also wrote in a blog: “Put simply, Google is not where we want to be when it comes to diversity, and it’s hard to address these kinds of challenges if you’re not prepared to discuss them openly, and with the facts.” Facebook also gave in, adopting a feckless “we’re really, really trying” line. COO Sheryl Sandberg explained in writing: “We have built a number of great partnerships, groups like the National Society of Black Engineers, the Hispanic Alumni of Georgia Tech, Grace Hopper Celebration of Women in Computing, and Management Leadership of Tomorrow. And these partnerships have been great because they are really helping us get great candidates and reach out.”

Jackson’s IT gambit has been all over the map this year. Earlier this year, he wrote a letter to tech companies, including Apple, Facebook, Google, Hewlett-Packard, and Twitter, replete with his familiar hectoring style. On March 19, he showed up at the Hewlett-Packard shareholders meeting at the Santa Clara Convention Center to skewer CEO Meg Whitman and her company’s record on minority hiring. And just two days ago, appearing on CNBC, Jackson denounced information technology firms for their lack of “diversity.”[6]

It is far safer and easier to pay off the diversity blackmailers rather than meeting their hiring demands, and such donations to educational and recruitment efforts for minorities are socially positive and build goodwill. It’s better to pay this “diversity tax” outright than to compromise your core engineering, sales, and marketing teams with deadwood employees. If the pressure increases, managements may place more diverse hires in less critical areas, judging this to be the least harmful way of making their numbers look better. But employees that aren’t the best you can find for the position impose a greater cost than just their salaries—their presence signals to everyone in the company that excellence has been subordinated to political pressure, and that appeasing the diversity activists is more important than customers or markets. And this damages the morale of those who are working hardest and have sacrificed the most to be at the center of the company’s production.

One curmudgeon who openly resisted these kinds of demands, T.J. Rodgers of Cypress Semiconductors, famously wrote a letter to crusading nuns who had pressed for women and minority board members:

The semiconductor business is a tough one with significant competition from the Japanese, Taiwanese, and Koreans. There have been more corporate casualties than survivors. For that reason, our Board of Directors is not a ceremonial watchdog, but a critical management function. The essential criteria for Cypress board membership are as follows:

◆ Experience as a CEO of an important technology company.

◆ Direct expertise in the semiconductor business based on education and management experience.

◆ Direct experience in the management of a company that buys from the semiconductor industry.

A search based on these criteria usually yields a male who is 50-plus years old, has a Masters degree in an engineering science, and has moved up the managerial ladder to the top spot in one or more corporations. Unfortunately, there are currently few minorities and almost no women who chose to be engineering graduate students 30 years ago. (That picture will be dramatically different in 10 years, due to the greater diversification of graduate students in the ’80s.) Bluntly stated, a “woman’s view” on how to run our semiconductor company does not help us, unless that woman has an advanced technical degree and experience as a CEO. I do realize there are other industries in which the last statement does not hold true. We would quickly embrace the opportunity to include any woman or minority person who could help us as a director, because we pursue talent—and we don’t care in what package that talent comes.

I believe that placing arbitrary racial or gender quotas on corporate boards is fundamentally wrong. Therefore, not only does Cypress not meet your requirements for boardroom diversification, but we are unlikely to, because it is very difficult to find qualified directors, let alone directors that also meet investors’ racial and gender preferences.

I infer that your concept of corporate “morality” contains in it the requirement to appoint a Board of Directors with, in your words, “equality of sexes, races, and ethnic groups.” I am unaware of any Christian requirements for corporate boards; your views seem more accurately described as “politically correct,” than “Christian.”

My views aside, your requirements are—in effect—immoral. By “immoral,” I mean “causing harm to people,” a fundamental wrong. Here’s why:

I presume you believe your organization does good work and that the people who spend their careers in its service deserve to retire with the necessities of life assured. If your investment in Cypress is intended for that purpose, I can tell you that each of the retired Sisters of St. Francis would suffer if I were forced to run Cypress on anything but a profit-making basis. The retirement plans of thousands of other people also depend on Cypress stock—$1.2 billion worth of stock—owned directly by investors or through mutual funds, pension funds, 401k programs, and insurance companies…. Any choice I would make to jeopardize retirees and other investors from achieving their lifetime goals would be fundamentally wrong.[7]

Rodgers was expressing the belief shared by essentially all advanced technologists that the “package” workers come in — the skin color, sex, and body type containing the most critical component, the brain — doesn’t matter. Finding the solutions to problems matters. Building a great product matters. Getting that product sold and dominating the market matters. Making a good profit matters, so you can do it all again in our capitalist system and pay your investors back for their foresight in entrusting their hard-earned resources and future wellbeing to you. And anyone who can contribute to the project is accepted and rewarded, and anyone who does not, is not. There are many roles in society, many industries and types of work, and it would be strange if various types of people — races, sexes, and cultures –were equally motivated to work in all of them. And so it is not racism or sexism that holds back women and minorities in STEM fields, but cultural factors and motivation. And this diversity is to be celebrated, not artificially eliminated.

There is some pushback from the newer software companies as well. Leslie Miley, (black) head of engineering at the cloud-based team collaboration tool builder Slack,[8] opposed hiring quotas at a recent tech conference:

“I don’t think they work, in particular in think it’s another way saying we won’t lower the bar,” Miley said on stage at TechCrunch Disrupt SF. “What I’m saying is we want a level playing field, you need to have a level playing field. How you level it is, you don’t [just] go to places like MIT and [University of California—Berkeley] and Stanford and focus on those places. I don’t want to have to talk about this again, I don’t believe in quotas, I think they’re inherently wrong and I think there are realistic solutions that don’t have quotas attached to [them].”…

[Slack] has made a lot of effort to branch out into regions outside of Silicon Valley in order to attract talent in regions that are outside the traditional Silicon Valley mold. And it’s looking outside the traditional places that Silicon Valley giants, startups and venture capitalists may be pattern-matching into the best candidates.

That includes looking in unexpected areas in the United States, too, including cities like Detroit, Richmond or even Nashville, Miley said. Those cities are plenty diverse and also have a large pool of highly diverse and talented candidates, and Slack is doing what it can to expand into those areas. And larger tech companies should be doing the same thing, he said.

“[Large tech companies] don’t need to set up shop at the same scale,” Miley said. “Could you put 200 people, definitely, it’s a drop in the hat for Google or Facebook, it’s actually cost competitive to areas in India and China. I’ve had teams, managed over 100 people in India, I know what the cost structure looks like… [Then] people who want advancement know they have to come to HQ, you have people coming to Cupertino, Mountain View. What happens when you hire diverse people—they talk to their friends, their network looks like them. They’re gonna hire friends, associates, you start to make inroads in this company.”

A big part of the issue is that networks within companies tend to self-select within their own networks, keeping diverse candidates from coming into the company. That leads to a reinforcing cycle where diverse candidates from different regions and backgrounds, which might bring in their own friends to the companies, might not feel welcome in those companies….[9]

Outstanding — a networked company can operate in a distributed fashion in many sites around the world, giving HQ a less central role and encouraging geographic diversity that will increase other kinds of cultural diversity. With the goal being cost-effective excellence by going to where the talent is.

[1] “The Enemy in HR,” by Robert X. Cringely, I, Cringely, September 28th, 2014. http://www.cringely.com/2014/09/28/enemy-hr/
[2] Scott Aaronson, an associate professor of EE&CS at MIT, wrote a famous blog comment about his fear of being perceived as a nerdy heterosexual male found gross by females, which triggered a lot of online discussion. Overview: http://www.chronicle.com/blogs/wiredcampus/mit-professors-blog-comment-sets-off-debate-over-nerds-and-male-privilege/55461, then read the invaluable Scott Alexander’s commentary on the incident: http://slatestarcodex.com/2015/01/01/untitled/, and then read http://slatestarcodex.com/2014/08/31/radicalizing-the-romanceless/.
[3] http://www.asw4autism.org/pdf/Changes_to_ASD_Criteria_in_the_DSM_5.pdf
[4] See Apple’s EEO-1 Form for 2015: http://images.apple.com/diversity/pdf/2015-EEO-1-Consolidated-Report.pdf
[5] “Rev. Jesse Jackson continues push for diversity in tech industry,” by Marissa Lang, San Francisco Chronicle/SFGate, April 22, 2016. http://www.sfgate.com/business/article/Rev-Jesse-Jackson-continues-push-for-diversity-7304554.php
[6] “Silicon Valley Capitulates to Jesse Jackson Shakedown,” by Carl Horowitz, National Legal and Policy Center, May 30, 2014. http://nlpc.org/2014/05/30/jesse-jackson-takes-shakedown-campaign-silicon-valley-extracts-concessions-timid/
[7] “Cypress CEO Responds to Nun’s Urging a ‘Politically Correct’ Board Make-up,” by Cypress Semiconductor CEO T. J. Rodgers, May 23, 1996. http://www.cypress.com/documentation/ceo-articles/cypress-ceo-responds-nuns-urging-politically-correct-board-make
[8] “Slack Is Our Company of the Year. Here’s Why Everybody’s Talking About It,” by Jeff Bercovici, Inc. Magazine, December 2015. http://www.inc.com/magazine/201512/jeff-bercovici/slack-company-of-the-year-2015.html
[9] “Slack’s director of engineering, Leslie Miley, doesn’t believe in diversity quotas,” by Matthew Lynley, TechCrunch, September 12, 2016. https://techcrunch.com/2016/09/12/slacks-director-of-engineering-leslie-miley-doesnt-believe-in-diversity-quotas/

Death by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness and Death by HR is an important research tool… to craft counter-revolutionary tactics for dealing with the HR parasites our government has empowered to destroy us. All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

More reading on other topics:

The Justice is Too Damn High! – Gawker, the High Cost of Litigation, and the Weapon Shops of Isher
Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Captain America and Progressive Infantilization
FDA Wants More Lung Cancer
Corrupt Feedback Loops: Public Employee Unions
Sons of Liberty vs. National Front

“Death by HR” – HireVue, Video Interviews, and AI Job Searches

We’ve seen how HR is already mismanaging hiring by using primitive automation tools for screening, and how future progressive regulations may make the situation even worse. Meanwhile, social media and online profiles are providing more honest data on candidates than ever before, but HR is warning hiring managers not to look at it.

The good news may be that AI in smarter screening programs may be able to use online searches and carefully-designed online questionnaires to do a much better job of identifying possible great hires and screening out the deadwood. Meanwhile, leading-edge employers like Google have discovered overly-specific degree and experience qualifications can actually screen out some of the most productive people in the applicant pool. If any company can apply data analytics and AI to hiring and performance management, it would be Google. How did Google do when they tried? The New York Times interviewed senior VP of people operations (Google’s name for HR, apparently) Laszlo Bock in 2013:

Years ago, we did a study to determine whether anyone at Google is particularly good at hiring. We looked at tens of thousands of interviews, and everyone who had done the interviews and what they scored the candidate, and how that person ultimately performed in their job. We found zero relationship. It’s a complete random mess, except for one guy who was highly predictive because he only interviewed people for a very specialized area, where he happened to be the world’s leading expert….

On the hiring side, we found that brainteasers are a complete waste of time. How many golf balls can you fit into an airplane? How many gas stations in Manhattan? A complete waste of time. They don’t predict anything. They serve primarily to make the interviewer feel smart.

Instead, what works well are structured behavioral interviews, where you have a consistent rubric for how you assess people, rather than having each interviewer just make stuff up.

Behavioral interviewing also works—where you’re not giving someone a hypothetical, but you’re starting with a question like, “Give me an example of a time when you solved an analytically difficult problem.” The interesting thing about the behavioral interview is that when you ask somebody to speak to their own experience, and you drill into that, you get two kinds of information. One is you get to see how they actually interacted in a real-world situation, and the valuable “meta” information you get about the candidate is a sense of what they consider to be difficult.[1]

Google used to be known for hiring only people under 30, using those brainteasers to identify top programming talent and relying on academic qualifications, favoring degrees from prestigious universities. That’s no longer true:

One of the things we’ve seen from all our data crunching is that G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless—no correlation at all except for brand-new college grads, where there’s a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything.

What’s interesting is the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college…. academic environments are artificial environments. People who succeed there are sort of finely trained, they’re conditioned to succeed in that environment. One of my own frustrations when I was in college and grad school is that you knew the professor was looking for a specific answer. You could figure that out, but it’s much more interesting to solve problems where there isn’t an obvious answer. You want people who like figuring out stuff where there is no obvious answer.

So how are they applying their famous data analytics to hiring for Google? Very methodically, as you would expect. According to an Atlantic story:

In the summer of 2006, Todd Carlisle, a Google analyst with a doctorate in organizational psychology, designed a 300-question survey for every Google employee to fill out… Some questions were straightforward: Have you ever set a world record? Other queries had employees plot themselves on a spectrum: Please indicate your working style preference on a scale of 1 (work alone) to 5 (work in a team). Other questions were frivolous: What kind of pets do you own?

Carlisle crunched the data and compared it to measures of employee performance. He was looking for patterns to understand what attributes made a good Google worker. This was strongly related to another question that interested his boss, Laszlo Bock, senior vice president of People Operations: What attributes could predict the perfect Google hire?

…Google was essentially trying to Google the human-resources process: It wanted a search algorithm that could sift through tens of thousands of people—Google’s acceptance rate is about 0.2 percent, or 1/25th that of Harvard University—and return a list of the top candidates. But after a great deal of question-asking and number-crunching, it turned out that the best performance predictor wasn’t grade-point average, or type of pets, or an answer to the question, “How many times a day does a clock’s hands overlap?” The single best predictor was: absolutely nothing.[2]

Much research shows referrals to be the most reliable source of better hires, so Google’s early emphasis on ties to computer science professors to recruit the best students for their early programming teams was a good if limited strategy. Referrals are more likely to be “good fits” because the skills needed for good teamwork are more likely to get someone referred:

The study found that referrals produce “substantially higher profits per worker” who are “less likely to quit,” “more innovative,” and “have fewer accidents”—all this, even after controlling for factors like college, SAT scores, and IQ. Team-based companies require openness, compatibility, and a willingness to cooperate. Referral programs work because great employees pass along workers who similarly match the company culture.

Although they account for only six percent of total applications, referrals now result in more than a quarter of all hires at large companies, according to a recent paper from the Federal Reserve Bank of New York and MIT….

Google, which depends on referrals, once administered up to 25 interviews for each job candidate. Todd Carlisle, the organizational psychology doctorate who administered the company’s surveys in 2006, thought this might be overkill. He tested exactly how many interviews were necessary to be confident about a new hire. The right number of interviews per candidate, he discovered, was four. This new policy, which Google calls the Rule of Four, “shaved median time to hire to 47 days, compared to 90 to 180 days,” Laszlo Bock wrote in his book Work Rules.

But Carlisle’s research revealed something deeper about the hiring process, which has resonance for every industry: No one manager at Google was very good, alone, at predicting who would make a good worker.

Four meticulously orchestrated Google interviews could identify successful hires with 86 percent confidence, and nobody at the company—no matter how long they had been at the company or how many candidates they had interviewed—could do any better than the aggregated wisdom of four interviewers.

It turns out that a single Google hiring manager, at least, is often not that good at judging candidates — but when four of their judgments are combined, the result is as good as it’s going to get. This convinced the company to drop their over-interviewing policies, which took much candidate and staff time and delayed hiring by months.

So what are the prospects for automating hiring? Aptitude test scores have considerable predictive value in many cognitive jobs, but could one automate the emotional intelligence and teamwork skills testing needed to find good team workers? Google has tried and (at least as far as they’ve disclosed their practices) failed to find anything better than referrals and face-to-face interviews.

But software companies keep trying to improve ATS (Applicant Tracking Systems) functions to do a better job:

Companies such as Facebook, GE, IBM, Hilton Worldwide, SAP and many others have been slowly adding data analytics into their recruitment practices. A few years ago, it was unheard of to scan candidate resumes for data, but now it’s commonplace. Machine intelligence is being used to scan through other aspects of candidate information, such as their social media content, their facial expressions, even their work samples to identify top candidates – and weed out the undesirables.

“Such practices raise questions about accuracy and privacy, but proponents argue that harnessing AI for hiring could lead to more diverse, empathetic, and dynamic workplaces,” says Sean Captain, a journalist with Fast Company.

…“corporate recruiting is broken” as a system. It’s filled with inaccuracies and black holes where candidates disappear…. “85% of job applicants never hear back after submitting an application.” This indicates that some recruiters are still not able to stay on top of recruitment processes, and the candidate experience has a long way to go towards being a positive one.

Perhaps there is room for more automation and AI in recruitment if it can restore better recruitment practices from the human side of things. Kibben mentions that AI will improve the candidate experience and is a winning proposition for recruiters who will be able to strategically partner with hiring managers instead of simply filling job requests.[3]

Lots of buzzwords and promises, few real advances. One semi-useful tool now becoming popular is the automated interview system — imagine an online interviewing system where the applicant answers preset questions in front of their PC, laptop, or phone camera, with the video uploaded for later replay by HR staff and hiring managers. This certainly cuts down the overhead of doing interviews — no more paying to fly candidates out and take them to dinner, just video dating-style files to pick up those subtle clues about the candidate normally gleaned from a face-to-face interview.

How does that work out in practice? A company called HireVue claims to analyze video interviews using AI tools:

The deep dive into a candidate’s mind isn’t a new idea, says Mark Newman, founder and CEO of HireVue. Founded in 2004, it was one of the pioneers in using AI for hiring. Its specialty is analyzing video interviews for personal attributes including engagement, motivation, and empathy. (Although it also uses written evaluations.) The company analyzes data such as word choice, rate of speech, and even microexpressions (fleeting facial expressions).[4]

But most users of their systems are just looking for a cost-effective substitute for face-to-face interviews, with only a few using “AI” to evaluate the candidate videos. HireVue is increasingly important:

HireVue Inc., which provides video interviewing software for Goldman Sachs and 600 other firms, said it hosted nearly three million video interviews last year, up from 13,000 five years ago….

Most video-interviewing programs require applicants to click a link or install an app. Interviews begin with a prompt such as “Tell us about a time you had to deal with a conflict” that stays on-screen for about 30 seconds. Then, the camera turns on and the candidate has anywhere from 30 seconds to 5 minutes to respond before the next question pops up.

Human-resources staff then review the videos and pass along promising applicants to managers for consideration. Applicants who make the cut are typically invited to a one-on-one interview. That doesn’t always mean it will be in-person, though. Varsha Paidi, a software engineer hired by IBM last year, had subsequent online interviews and eventually received her job offer via text message.

Speeding up the hiring process allows recruiters to look at more applicants than before, giving companies wider reach, said Obed Louissaint, the human-resources lead for IBM’s Watson division.

Applicants, however, say that computer-guided interviews take some getting used to. Amy Hall was never the type to get nervous during job interviews, but when the 29-year-old had to complete a video interview last year for an internal job switch at Cigna-Healthspring, she recalled feeling apprehensive and camera-shy. She waited until after work hours and used a computer in the IT department. With the door closed, she clicked a link to Cigna’s video-interviewing site….

Companies say they seek similar traits in video interviews as they do in traditional interviews. Recruiters at IBM and Cigna said they evaluate candidates based on how well the person communicates his/her thought process, whether the person answers all parts of the question—and whether he/she makes eye contact…

Video interviews might also present some problems because managers cannot ask follow-up questions or engage candidates further on a point, said Carol Miaskoff, assistant legal counsel for the Equal Employment Opportunity Commission. In letters to vendors, Ms. Miaskoff has suggested that companies assign more than one person to review individual videos to ensure hiring decisions aren’t made hastily.

Taking robo-recruiting one step further, some HireVue customers have an algorithm review the video interviews for them. Using data about the skills and attributes companies are seeking for a given role, a program called HireVue Insights scans videos for verbal and facial cues that match those skills then ranks the top 100 applicants.[5]

Given that in-person interviews by staff tend to wander and often turn into staff evaluations of whether the candidate will be enjoyable company or not, a fixed format with questions set in advance does actually promise to reduce the element of good-old-boyism. Everyone has experienced the job interview that turns quickly to discussion of sports or hobbies in common — the interviewer pays less attention to skills and attitudes than shared cultural enthusiasms, tending to favor cultural clones of themselves whose company they will enjoy. But notice that most companies still rely on human HR staff judgement to screen the resulting videos, which saves time for hiring managers but still introduces an element of HR prejudice. If your HR staff are primarily left-leaning New England-educated feminists, a white male candidate with a Southern accent and stereotypically male mannerisms will likely be screened out. For once the EEOC advice is reasonable — this type of screening will be more effective if more than one person reviews each video, making it more difficult for prejudice to prevail.

Giving HR staff veto power over candidates seems unwise. Practical considerations require obviously unqualified candidates to be weeded out early when a position attracts large numbers of applicants, but hiring managers and team members should invest the relatively minor time it takes to review these types of video responses themselves, as they are likely to be the best judges of culture fit and attitudes revealed by video.

Applicants encounter HireVue and similar video interviewing systems frequently now, and not everyone is happy—they find the idea insulting and intrusive. One question at Ask the Headhunter:

[The questioner’s wife] landed two job interviews with hiring managers within three weeks. Suddenly, a personnel jockey injected himself into the ongoing discussions with the hiring manager. The recruiter insisted that my wife submit herself to a one-way, online digital video taping, answer a series of pre-selected “screening questions,” and upload it to who knows where for “further review and screening” by who knows whom.

She found the request creepy, impersonal, presumptuous, Orwellian, exploitative, voyeuristic, unprofessional, and perhaps even unethical. She declined, instantly prompting an automated “Do Not Reply” rejection e-mail. She was not worthy because she wouldn’t subject herself to a dehumanizing “HireVue Digital Video Interview.”

This new wrinkle in HR practices seems like the most unsettling and counterproductive yet. It not only removes access to the hiring manager, but also live, human interaction. It sounds like “HR pornography,” where perverted personnel jockeys huddle around a monitor to gawk at videos of “virtual job candidates,” picking apart perceived blunders while they screen you out.[6]

The Headhunter, Nick Corcodillos, suggested the candidate respond in this situation by expressing a willingness to do a Skype interview with the hiring manager, cheaper (no payment to HireVue) and more personal. He suggests HR has an agenda in using such impersonal services: “What they mean is, we don’t want you to see the personalities of our personnel jockeys because, face it, they’re a bunch of data diddlers that we don’t want talking to anyone.” I’d say that is correct. In this case the applicant already spoke to the hiring manager, but HR is trying to force use of its process using HireVue for bureaucratic control reasons. If it should come to an EEOC complaint, having anyone escape their uniform process would be seen as evidence of favoritism having disparate impact on minorities.

There’s nothing wrong with these video interviewing services — ideally they substitute for expensive and time-consuming travel to meet with HR staff and hiring managers. But in practice, some companies now use them along with ATS screening techniques to completely depersonalize all but the last stages of hiring — the candidate does a lot of work, but no one at the company spends any time on their application at all until pre-screened and pre-interviewed. Meanwhile, candidates who contact hiring managers directly or run into them at professional functions or through work at companies in the same industry get the further advantage of being personally known in advance.

It does cost a lot to hire through HR — the arms race of HR automation leads to candidates using automation to contact far more potential employers, leading to avalanches of applications, leading to more ineffective automation. Hopeful noises about AI assisting are so far just that. In principle, AI could do a good job of analyzing resumes and interview videos and deliver the best candidates to hiring managers. In practice, no one is delivering anything more than hype.

Typical of the hype: HiringSolved, a startup promising Siri-like hiring assistance:

HiringSolved will soon unveil what it considers “Siri for recruiting,” an artificial intelligence assistant for recruiters. His name will be RAI, pronounced like the name Ray, and standing for “Recruiting Artificial Intelligence.”

The company has been working on it for five years, and is still perfecting it. The gist of it is you’d ask recruiting questions to a Chatbot-like system. So, instead of checking off a bunch of boxes, you’d type something like, “I need to find 10 female developers with experience using WordPress, within 10 miles of Milwaukee.” Or, perhaps, “What was the most common previous title of a systems engineer at Raytheon?”

Perhaps later, like with Siri, you’d use voice, not typed, commands.

HiringSolved’s RAI tool could also ask you follow-up questions, not unlike a conversation between a recruiter and a manager. If you, say, want a mechanical engineer, it might ask you to narrow your searches. Nuclear? Petroleum? Aerospace?

The idea is that the artificial intelligence will make you a better recruiter/sourcer, guiding you through questions that very experienced sourcers ask themselves in order to chop through a database and hone in on who they want.[7]

Chatbots and Siri, soon to save the day! Smart employers will pay the price to hire good, connected recruiters who have personal contacts in the industry. AI may one day allow applicants to prove themselves worthy without human intervention, but that day is a long way off.

[1] “In Head-Hunting, Big Data May Not Be Such a Big Deal,” by Adam Bryant, New York Times, June 19, 2013. http://www.nytimes.com/2013/06/20/business/in-head-hunting-big-data-may-not-be-such-a-big-deal.html
[2] “The Science of Smart Hiring,” by Derek Thompson, The Atlantic, April 10, 2016: http://www.theatlantic.com/business/archive/2016/04/the-science-of-smart-hiring/477561/
[3] “How AI and recruiters will work together in the near future,” by Tess Taylor, HRDive, September 15, 2016. http://www.hrdive.com/news/how-ai-and-recruiters-will-work-together-in-the-near-future/426291/
[4] “Can Using Artificial Intelligence Make Hiring Less Biased?” by Sean Captain, Fast Company, May 18, 2016. https://www.fastcompany.com/3059773/the-future-of-work/we-tested-artificial-intelligence-platforms-to-see-if-theyre-really-less-
[5] “Video Job Interviews: Hiring for the Selfie Age,” by Dahlia Bazzaz, Wall Street Journal, August 16,2016. http://www.wsj.com/articles/video-job-interviews-hiring-for-the-selfie-age-1471366013
[6] “HR Pornography: Interview videos,” by Nick Corcodillos, Ask the Headhunter®, October 14, 2014. http://www.asktheheadhunter.com/7537/hr-pornography-interview-videos
[7] “A Cousin Of Siri Is Coming To The Recruiting Field,” by Todd Raphael, ERE Recruiting Intelligence, September 8, 2016. http://www.eremedia.com/ere/a-cousin-of-siri-is-coming-to-the-recruiting-field/

Death by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits… HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

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