Atlas Shrugged

At long last, after several months, I have finished reading Atlas Shrugged by Ayn Rand. While reading The Fountainhead back in high school, I fell in love with Rand's school of philosophical thought, Objectivism. I always meant to follow up by reading Atlas Shrugged but between college, startups, and the myriad other distractions in my life I just never quite made time for the 1,000+ page novel. Finally, at long last, I have accomplished this task and it was interesting to read it 14 years after I read The Fountainhead - my perspective has changed a lot since then!

The Good

Rand's advocacy of free market capitalism certainly resonates very strongly with me. I'm not anti-government but I do believe that the government has a pretty focused role to play in the maintenance and advancement of society. Capitalism is an efficient system for fostering innovation, advancing ideas that are worthwhile and discarding those that aren't. The capital and where it flows provides an intrinsic metric of success, incenting businesses to evolve, streamline, and innovate.

When the government gets too involved not only does it lead to wonky results due to decision-making by people with little business experience, it also mucks up the entire capitalist system, blurring the incentives and obfuscating the metrics of success - further compounding the wonky results (I have blogged before about such wonky results.). I'm glad to have read this book now, after 11 years as an entrepreneur and business executive, as the government meddling in business affairs (e.g. the Anti-Dog-Eat-Dog Rule and Directive 10-289) evoked much more significant responses in me than they would have back when I was a student!

That said, in this book Rand argues for an extremely laissez-faire, almost anarchist, form of capitalism, which I do not support. The government does have a role to play in business and that is to set the rules of the system in which the market operates. These rules include fair laws and equitable taxes with frequent review and update. After that, businesses should be left free to optimize their operations around those rules.

I also bought into Rand's theme of Sanction of the Victim, the willingness of the successful to suffer at the hands of the "evil" (In this novel, "evil" is done by mooches and looters who have no capacity to achieve in and of their own right.), feeling guilty for the "sin" of their achievement. This corresponds with Transactional Analysis, specifically with the playing of games. It is easy to blame the "evil" person/company/country/organization but it takes two or more actors to play a game and they all are equally complicit in the result.

Rand's "rational egoism" or "ethical selfishness" still resonates with me in many ways but not nearly as much as it did in high school. If "self" is extended to represent collective units such as "family" or "company," I think this position is a good operating principle. However it must not be followed myopically and it must not be considered absolute. Part of what makes us human is that we have the capacity for love and human empathy, not just for maximizing self interest 24/7/365.

The Bad

Rand's philosophy really falls apart, though, on her premise that rationality is every human  being's highest virtue. Here I disagree completely. Human beings are inherently irrational creatures although we spend an enormous amount of time and energy rationalizing irrational decisions we have already made - consciously or subconsciously. Several times in the novel characters are derided for sharing their feelings or instincts. This is flat-out wrong. We can either ignore / suppress our emotions or we can embrace them, even capitalize on them.

Again, our capacity to feel is a critical element of the human experience and, without it, life is less rich, less meaningful. This shows in Rand's characters who never seem to know joy. She writes that they are joyful when they achieve something great but it isn't very convincing. The moments of greatest joy in my life have been almost entirely irrational and they have involved people, not achievements. By condemning irrationality, Rand really misses the boat.

The Ugly

Because of the dogged focus on rationality, the characters in Atlas Shrugged simply aren't believable. Or, even if one believes that humans like them might exist, it is hard to identify with them. There is some dialogue, of course, but the book feels like one preachy monologue after another. Because of this inability to write "human" characters and because of her insistent commitment to rationality, I wonder what Ayn Rand was like - and I suspect that she repressed a significant amount of her own feelings.

More practically, Atlas Shrugged is too long. The story could have been told in 1/3 the pages and without sacrificing any character development (since, as described above, the characters weren't really developed). A prime example is Galt's radio address, which really is the expression of Rand's philosophy packaged up into one monologue - and what a monologue! After three hours of reading, of Galt repeating himself over and over again, of rhetorical questions and allegories, I finally finished his address. There was a lot of great stuff in there but it was way too long - if it had been a real radio address, he would have bored his audience to tears and no one would have followed. In Atlas Shrugged, however, people around the country are inspired by this message - once again exhibiting Rand's inability to grasp how humans really work.

Conclusion


I'm really glad to have read the book and I would recommend it for others as well. My reaction is very mixed: the businessman in me loves it while the human in me rolls his eyes at it. The fact that it evokes such strong and mixed reactions is a good thing and I'm sure I will have many lively conversations about the book. I just wish that Rand would have understood the latter reaction and found a way to reconcile her philosophy with it.

Computer Science and IMD

A prospective applicant to the IMD MBA program recently contacted me to ask about how my computer science (CS) background affected my IMD experience and whether or not IMD was a good fit for him. It got me thinking, especially since I had just received an invitation to talk to the current crop of Rice undergrad CS majors. Following is an abbreviated version of my response:

No one else can answer whether or not IMD is a good fit for you - only you can. And in fact, you probably can't truly answer that question until after you've completed the program! For example, I thought IMD might be a good fit for me before I applied. After my second round, onsite interview day, I thought IMD would be a great fit for me. After completing the program, I knew it had been a great fit for me--but for very different reasons than I originally thought! 

Still, I'm glad to provide some contextual information about my experience in the hope that it helps you better anticipate what the program is like.

To answer your practical question first, yes, the international organizations you have mentioned recruit very heavily at IMD. The World Economic Forum is probably the most prodigious; 4 of my 89 classmates took a job there after graduation. Something I didn't realize until I was already in business school is that your location has a significant impact on the job opportunities that just come your way. If you're looking to work in San Francisco after business school, Stanford is your best choice hands-down. If you're looking to work in Geneva, there is no better pedigree than IMD. Can you go to Stanford and then take a job in Geneva or go to IMD and then take a job in San Fran? Of course, but it's more of an uphill battle.

As for my CS degree, I didn't find that I used it much at all during the program. Certainly my engineering-driven problem-solving approach came into play every day. Certainly my experience pulling all nighters to study/do problem sets/build software helped prepare me for the intense IMD work load. Certainly my skill with software programs like Excel was very useful, but I would guess that your career in the Finance world has imbued you with more of those skills than did your CS studies.

Honestly some of my greatest take-aways from the IMD program were really the result of unlearning my CS education. In studying CS I was taught that everything is rational/logical and that everything can be modeled with deterministic formulae. However, at IMD I learned that actually most people--myself included--behave quite irrationally. Recognizing that and learning to identify "what's really going on" in intra- and interpersonal dynamics has been one of the most useful skills I have ever developed.

Is this helpful background information for you? Again, only you can decide whether or not it's a good fit (although the Admissions team is pretty good at gauging that too!) but I applaud you for seeking out some more data. In the end you'll just have to do something that you probably didn't learn in CS class (but that you might learn at IMD): trust your feelings.

The Irrationalities of Negotiation

Today we conducted another acquisition simulation, for Finance this time. Our last simulation, for Strategy, was computerized and was built around realizing synergies between the two organizations and generating buy-in from stakeholders on both sides (and external). Today's simulation was a negotiation between Nestle and Rowntree, a UK-based chocolatier. Our 12 study groups were divided up evenly, half representing the acquiror and half the acquiree.

Last night we submitted our position to a neutral party: which operational/organizational issues were important for us, who we thought had the most bargaining leverage, what our target price was, and what our walk-away price was. The objective was to propose a win-win deal in which both sides ceded some points and came out better in the long run. My group represented Rowntree.

This morning we met with our paired Nestle group and got down to business. We both agreed that we were working toward the same goal and the meeting began very congenially. We compromised and came to agreements on layoffs, organizational structure, branding, and distribution with no problem. However, once the discussion turned to price, the attitudes of both sides soured.

It has been impressive to me how consistently, in every negotiation we have done, no matter how genuine the desire for collaboration is, irrationality and defensiveness play strong roles. Someone will invariably say something inflammatory. This causes the other group to put up its defenses and soon the two groups are "at war" with each other. In this case it came down to the last minute for us. We were bickering over a gap of 25 pence per share. The price was well above my group's walk-away price and below the other group's walk-away price. We had agreed on every other aspect of the deal. In short, rationally everyone in the room was prepared to accept the terms on the table but no one's ego wanted to give up that final 25 pence--or even meet in the middle.

At the last second, as we were being called into class and it looked like no deal would happen. I offered my hand to the other group's chief negotiator and accepted their terms. I had no authority to do so, but my group went along with it because rationally they knew it was the smart choice. I couldn't believe how emotions had almost killed a good deal over 25 pence!

The real learning came in class during the debrief. Only half of our groups had reached agreements despite every single one of them having entered negotiations with enough common ground (as illustrated by the positions they submitted last night) to do a deal. One group failed to close based on a difference of 10 pence even though all their other terms were in place--and I thought our 25-pence difference seemed trivial!

The exercise and the debrief were valuable. If there is one thing we have learned at IMD it is that human beings behave irrationally, especially when under stress. Human beings lead and represent organizations (companies, departments, even countries), giving these organizations a sort of collective irrationality. Slowly but surely we are learning to anticipate and identify irrational behavior in ourselves and in others, enabling us to detach from strong situations and make rational decisions. Here at IMD we have the opportunity to test out such skills in a consequence-free environment such that we are more prepared to do the right thing when billions of dollars, the future of an organization, or even human lives are on the line. Real world, real learning.