Reid Gustin's Blog

Freakonomics, by Steven D. Levitt and Stephen J. Dubner

2006-02-27T06:59:00Z

I ripped through Freakonomics : A Rogue Economist Explores the Hidden Side of Everything this weekend. It was written by an economist and a journalist who teamed up to publish some really interesting statistical studies that Levitt (the economist) has done in the past couple of years. The book isn't really about anything specific: it's more a collection of essays, each of which is about a theme of its own.

As an economist, Levitt is highly interested in the behavior of people when their choices are impacted by incentives. For example, if a teacher is given financial incentive for his students performing well on standardized tests, what happens? The book digs into a number of possibilities, from the teacher continuing to teach as he always has to writing the answers to the test on the board. One of the things I loved about the book was that it dug into each problem from a number of different angles, trying to filter each set of data down to what was really significant.

The topics are all over the map economically, socially and politically. So while the first chapter is all about the presence of cheating when individuals (whether teachers or sumo wrestlers) are given the proper incentives, the second is about the asymmetrical access to information as it applies to the Ku Klux Klan and real estate agents. The comparisons seem wild, but they get pulled together nicely in the book. The authors mix history, data and explanations really well, so I was kept interested pretty much straight through.

Levitt is particularly interested in the economics of crime and poverty, so there are three or so chapters in that area. The third chapter is a full-blown financial analysis of the crack-dealing business, the fourth is about what Levitt believes to be the real cause of recent drops in the crime-rate (it's probably not what you think), and so on. One of the things Levitt and Dubner encourage in the epilogue is to think about things from different angles, and I think their book is a great example of the interesting nuggets you can come across if you do.

First, Break All the Rules, by Marcus Buckingham and Curt Coffman

2006-02-26T07:24:00Z

My manager recommended First, Break All the Rules: What the World's Greatest Managers Do Differently to me a couple of months ago. I finally got to it last week (I keep a queue of stuff I'm waiting to read) and finished it this afternoon. The book is a summary of an enormous study done by the Gallup organization into what makes excellent managers excellent. Throughout the book, I found my preconceptions challenged on a regular basis (which I found disconcerting), but then those challenges were backed up with lots of hard data. As an employee who doesn't manage people, the book gave me some great insight into the kinds of things great managers do to generate excellence from their teams.

Buckingham and Coffman have a long list of the traits of great managers, including a number of sections talking about how their results contradict the common wisdom. A good example directly from the book is: You have a mediocre manager and an outstanding manager. You also have a territory performing well, and a territory performing poorly (though neither has reached its potential). Which manager do you put in charge of which territory? My immediate reaction was to put the mediocre manager in charge of the territory performing well and the put the outstanding manager in charge of the territory performing poorly. My reasoning was that the outstanding manager would bring the poorly performing territory up to perform well, leaving me with two good territories. The book suggests the opposite: put the outstanding manager in charge of the good territory, under the assumption that you'll be left with a fantastic territory. Fire the mediocre manager, and then get a turnaround expert to handle the poor performer. Their response to my first instinct was that you'll be left with the higher-performing territory still not performing at its peak, and the lower-performing territory may break the spirit of your excellent manager. At that point, you've set both managers up to fail, and you may lose the excellent manager

The book is packed with examples (backed by hard data) that go against what I think of as the common wisdom. What I was pleasantly surprised to find is that Microsoft actually does many of the things that they suggest companies should do. For example, one common problem in some companies is that people feel they need to move into management to move their career forward. Microsoft (and this book) rejects that, saying you'll just end up with a bunch of managers who shouldn't be managers. Instead, you need to set up career paths that allow people to move forward without moving away from their core talents. Microsoft does this by separating title from level, which allows an individual contributor developer to make more than their manager (or their manager's manager) if they really perform that well as a developer. I love this part of our culture, but it's still nice to see some research backing it up.

The book also spends a lot of time talking about the differences between skils, knowledge and talents. Specifically, these are things that get mixed up in common usage. That's unfortunate, because talents aren't really something that can be taught. So companies that spend time trying to teach their managers to be visionary innovators are really just focusing on their people's weaknesses. Mostly, this made me want to read the next book based on the Gallup study, which is Now, Discover Your Strengths. Hopefully, with a better idea of what I'm good at, and what gives me satisfaction, I can keep working on a career that really makes me happy.

The Automatic Millionaire, by David Bach

2006-02-13T04:56:00Z

I grabbed The Automatic Millionaire : A Powerful One-Step Plan to Live and Finish Rich in the Charlotte airport on the way home, and was done by the time my plane hit Dallas. I've read other books by Bach before, but found this one to suit me better. As some of the comments on Amazon say, the ideas Bach is presenting aren't fundamentally new or radical. In fact, they're the same things you'll find in Rich Dad, Poor Dad or any one of ten other personal finance books. The two things that make this book different are Bach's writing style, and the way he makes applying his ideas so simple.

The writing style was extremely effective for me. It's not fancy, it's not complicated, it just gets the point across. In the fine tradition of personal finance books, Bach starts out with some real examples of people applying the ideas. He uses people who didn't want to put ads in newspapers, didn't want to quit their jobs, and didn't want to start their own businesses, but did want to be able to retire early. That resonates pretty well with me.

From examples, Bach gets into very specific ideas (which, like I said, have been covered in lots of other books) about how to save for retirement. The big point is to "Pay Yourself First", making sure to take a slice out of your paycheck before the government does (as with a 401k account), to make sure you're saving in the most effective way possible. After that, he talks about how much you should save for a given target at retirement.

But the main point he's trying to get across is that nobody does these things if it's not easy. It's one thing to say you're going to save $1000 each year, it's another thing to have to remember to write the checks. So Bach's main point is that if you can't set your saving up to be completely automatic, you'll never do it. So he walks through a number of ways to automate your saving and investing, with some very concrete examples of places to go for help.

The whole book only takes three or four hours to read, and if you've never read a personal finance book, I highly recommend it. As someone who reads a lot of books like this, I loved it. The style is effective, the points are good, and his plan for making things concrete are extremely realistic.

The World Is Flat, by Thomas L. Friedman

2006-02-13T04:33:00Z

I've been reading The World Is Flat: A Brief History of the Twenty-first Century for a couple of weeks now (it was a Christmas present from my mom). I finished on my trip to Charlotte last week. Overall, I think it's an outstanding book, with a lot of information about globalization and the impact it is having on the business world of today. As someone in a field that has been hit by outsourcing, offshoring, and so on, I enjoyed reading an account of how those things came about.

Friedman's main tenet is that the world is getting smaller and flatter. Not in a pre-Columbus European cosmological sense, but rather in the sense of leveling the playing field. The impact of that flattening is that those of us in professions that can be moved around the globe will have to move quickly to stay relevant. Personally, this rings true to me, and isn't as scary as I initially thought. It basically says that if you want to keep a job in (for example) software programming, you need to keep your skills up to date, be willing to be entrepreneurial about finding a competitive niche into which you fit, and stay flexible.

The factors that Friedman sees as flatteners are the things that bring information workers around the world closer together. Things like internet connectivity, an improved political environment, and workflow software. The book is effective at describing the state of the business world for international companies, and gave some interesting insights into how things might change in the next decade.

The end of the book gets a bit preachy about the need to let this process happen, but overall I liked it very much.

You're Who?

2006-01-03T09:02:00Z

As you can tell from the title of the blog, my name is Reid Gustin. I'm a software developer at Microsoft, working on the System Definition Model (SDM). SDM is part of the Dynamic Systems Initiative, working on making IT systems self-managing, and reducing the complexity of everything from datacenters to individual PCs. It's wonderful stuff, and I think in the next five to ten years, the output of our group is going to make its way into most of what Microsoft does.

In my spare time, I work on the Windows Installer XML (WiX) project, which was Microsoft's first Open Source project. It's basically five to ten of us who get together on Tuesday nights and write code. WiX is a toolset for building Windows Installer packages (MSIs), and is used by Office, SQL Server, parts of MSN, and lots of other groups around Microsoft.

I've been playing the guitar since I was nine (I'm 25 now... yikes!), love movies, and like playing video games. It seems likely that in addition to the books I'm reading, movies and video games are going to make their way into posts. So this is more likely to be "Reid's Distractions" than "Reid's Books".

If you want to know more, you'll need to ask for it.

First Post

2006-01-03T01:47:00Z

It seems like everyone else out there has a blog, but I've been resisting. Partially because I feel like many blogs are just a place for the author to dump their diary, and I didn't want my blog to be that. So, when a coworker left Microsoft a little while back and asked that I blog the books that I read, I spent a while deciding whether I could contribute something useful. I'm still not sure about that, but figure that even if this becomes nothing more than a listing of the books I'm reading, it could conceivably have value for someone.

So, that's what this blog is going to be about. The books I read, how I feel about them, things like that. If all goes well, I can talk a couple of people out there into giving me pointers toward other books I might like. I love Amazon for giving me other books like the ones I'm buying, but that doesn't give much hope for finding something fundamentally new.

I'm told that talking about yourself and what you do is absolutely required for the first posting. I understand that, but I've never liked requirements being placed on me, so that can wait for the second. No books are likely to show up until the third or fourth. Fortunately, neither are any readers.