prove their assertion right In response to a fact-checking email, Baron wrote: “Our focus was a bit broader than ‘culture.’ We were interested in how founders’ early choices about organizational design and structuring of employment relationships affected the evolution of their nascent enterprises.”
“answer a questionnaire” In response to a fact-checking email, Baron wrote that the sources they turned to exceeded just the San Jose Mercury News: “We scoured a variety of sources, including the ‘Merc,’ to try to identify evidence of new foundings. That was supplemented by industry listings from companies like CorpTech (which focuses on marketing targeted to small tech companies). From these sources we put together listings of companies by subsector (biotechnology, semiconductors, etc.). Then we sampled from those listings, seeking to get a representative sampling of firms in terms of age, venture-backed versus not, etc. Somewhat later, after ‘the Internet’ had emerged as a discernible sector, we replicated the research design focusing specifically on that sector, to see if things were similar or different among the new net companies from the others that we had been studying, and we found the patterns were the same.”
close to two hundred firms James N. Baron and Michael T. Hannan, “The Economic Sociology of Organizational Entrepreneurship: Lessons from the Stanford Project on Emerging Companies,” in The Economic Sociology of Capitalism, ed. Victor Nee and Richard Swedberg (New York: Russell Sage, 2002), 168–203; James N. Baron and Michael T. Hannan, “Organizational Blueprints for Success in High-Tech Start-Ups: Lessons from the Stanford Project on Emerging Companies,” Engineering Management Review, IEEE 31, no. 1 (2003): 16; James N. Baron, M. Diane Burton, and Michael T. Hannan, “The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies,” Articles and Chapters (1996): 254; James N. Baron, Michael T. Hannan, and M. Diane Burton, “Building the Iron Cage: Determinants of Managerial Intensity in the Early Years of Organizations,” American Sociological Review 64, no. 4 (1999): 527–47.
collected enough data In response to a fact-checking email, Baron wrote: “Perhaps this is nit-picking, but what we were looking at were firms whose founders had similar cultural ‘blueprints’ or premises underlying their creation. I emphasize this because we were not using observable practices as the basis for differentiation, but instead the way in which founders thought and spoke about their nascent enterprises.”
one of five categories There were also a sizable number of firms that did not fit neatly into any of the five categories.
“on the same path” In response to a fact-checking email, Baron said that he should not be considered an expert on Facebook, and that participants in the study were promised anonymity. He added: “We found that engineering firms fairly frequently evolved, either into bureaucracies or into commitment firms. Those transitions were much less disruptive than others, suggesting that one reason for the popularity of the engineering blueprint at start-up is that it is amenable to being ‘morphed’ into a different model as the firm matures.”
“ ‘You get paid,’ ” Baron said Baron, in response to a fact-checking email, said that the bureaucratic and the autocratic models have differences but are similar in that “(1) they are both quite infrequent within this sector among start-ups; and (2) they are both unpopular with scientific and technical personnel.”
successful companies in the world The researchers promised confidentiality to companies that participated in the study, and would not divulge specific firms they had studied.
culture came through James N. Baron, Michael T. Hannan, and M. Diane Burton, “Labor Pains: Change in Organizational Models and Employee Turnover in Young, High-Tech Firms,” American Journal of Sociology 106, no. 4 (2001): 960–1012.
California Management Review Baron and Hannan, “Organizational Blueprints for Success in High-Tech Start-Ups,” 16.
“strong advantage” In response to a fact-checking email, Baron expanded upon his comments: “What this doesn’t explicitly capture is that commitment firms tended to compete based on superior relationships with their customers over the longer term. It is not just relationships with salespeople, but rather that stable teams of technical personnel, working interdependently with customer-facing personnel, enable these companies to develop technologies that met the needs of their long-term customers.”
“viability of the Company” Steve Babson, ed., Lean Work: Empowerment and Exploitation in the Global Auto Industry (Detroit: Wayne State University Press, 1995).
preserve their jobs In a fact-checking email, Jeffrey Liker wrote that Toyota’s head of human resources had told a UAW representative that “before laying off any workers they would insource work, then management would take a payout and then they would cut back hours before considering layoffs. In return he said the union needed to agree on three things: 1) competence would be the basis for workers advancing, not seniority, 2) there had to be a minimum of job classifications so they had the flexibility to do multiple jobs, and 3) management and the union would work together on productivity improvements. Within the first year the Chevy Nova was not selling well and they had about 40% too many workers and they kept them all employed in training and doing kaizen for several months until they could get the Corolla into production.”
Harvard researchers wrote Paul S. Adler, “Time-and-Motion Regained,” Harvard Business Review 71, no. 1 (1993): 97–108.
shared power It is important to note that, despite NUMMI’s success, the company was not perfect. Its fortunes were tied to the automotive industry, and so when overall car sales declined, NUMMI’s profits dipped as well. The NUMMI factory was more expensive to operate than some low-cost foreign competitors, and so there were stretches when the firm was undersold. And when GM tried to export NUMMI’s culture to other plants, they found, in some places, it wouldn’t take. Enmities between union leaders and managers were simply too deep. Some executives refused to believe that workers, if empowered, would use their authority responsibly. Some employees were unwilling to give GM the benefit of the doubt.
“devoted to each other” When the Great Recession hit the automotive industry, NUMMI was one of the casualties. GM, headed toward bankruptcy because of liabilities in other parts of the company, pulled out of the NUMMI partnership in 2009. Toyota concluded it couldn’t continue to operate the plant on its own. NUMMI closed in 2010, after manufacturing nearly eight million vehicles.
no end in sight Details on development of the Sentinel system come from interviews and Glenn A. Fine, The Federal Bureau of Investigation’s Pre-Acquisition Planning for and Controls over the Sentinel Case Management System, Audit Report 06-14 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, Audit Division, March 2006); Glenn A. Fine, Sentinel Audit II: Status of the Federal Bureau of Investigation’s Case Management System, Audit Report 07-03 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, Audit Division, December 2006); Glenn A. Fine, Sentinel Audit III: Status of the Federal Bureau of Investigation’s Case Management System, Audit Report 07-40 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, Audit Division, August 2007); Raymond J. Beaudet, Sentinel Audit IV: Status of the Federal Bureau of Investigation’s Case Management System, Audit Report 09-05 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, Audit Division, December 2008); Glenn A. Fine, Sentinel Audit V: Status of the Federal Bureau of Investigation’s Case Management System, Audit Report 10-03 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, Audit Division, November 2009); Status of the Federal Bureau of Investigation’s Implementation of the Sentinel Project, Audit Report 10-22 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, March 2010); Thomas J. Harrington, “Response to OIG Report on the FBI’s Sentinel Project,” FBI press release, October 20, 2010, https://www.fbi.gov/news/pressrel/press-releases/mediaresponse_102010; Cynthia A. Schnedar, Status of the Federal Bureau o
f Investigation’s Implementation of the Sentinel Project, Report 12-08 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, December 2011); Michael E. Horowitz, Interim Report on the Federal Bureau of Investigation’s Implementation of the Sentinel Project, Report 12-38 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, September 2012); Michael E. Horowitz, Audit of the Status of the Federal Bureau of Investigation’s Sentinel Program, Report 14-31 (Washington, D.C.: U.S. Department of Justice, Office of the Inspector General, September 2014); William Anderson et al., Sentinel Report (Pittsburgh: Carnegie Mellon Software Engineering Institute, September 2010); David Perera, “Report Questions FBI’s Ability to Implement Agile Development for Sentinel,” FierceGovernmentIT, December 5, 2010, http://www.fiercegovernmentit.com/story/report-questions-fbis-ability-implement-agile-development-sentinel/2010-12-05; David Perera, “FBI: We’ll Complete Sentinel with $20 Million and 67 Percent Fewer Workers,” FierceGovernmentIT, October 20, 2010, http://www.fiercegovernmentit.com/story/fbi-well-complete-sentinel-20-million-and-67-percent-fewer-workers/2010-10-20; Jason Bloomberg, “How the FBI Proves Agile Works for Government Agencies,” CIO, August 22, 2012, http://www.cio.com/article/2392970/agile-development/how-the-fbi-proves-agile-works-for-government-agencies.html; Eric Lichtblau, “FBI Faces New Setback in Computer Overhaul,” The New York Times, March 18, 2010; “More Fallout from Failed Attempt to Modernize FBI Computer System,” Office of Senator Chuck Grassley, July 21, 2010; “Technology Troubles Plague FBI, Audit Finds,” The Wall Street Journal, October 20, 2010; “Audit Sees More FBI Computer Woes,” The Wall Street Journal, October 21, 2010; “FBI Takes Over Sentinel Project,” Information Management Journal 45, no. 1 (2011); Curt Anderson, “FBI Computer Upgrade Is Delayed,” Associated Press, December 23, 2011; Damon Porter, “Years Late and Millions over Budget, FBI’s Sentinel Finally On Line,” PC Magazine, July 31, 2012; Evan Perez, “FBI Files Go Digital, After Years of Delays,” The Wall Street Journal, August 1, 2012.
Toyota Production System philosophy to other industries For more on lean and agile management and methodologies, please see Craig Larman, Agile and Iterative Development: A Manager’s Guide (Boston: Addison-Wesley Professional, 2004); Barry Boehm and Richard Turner, Balancing Agility and Discipline: A Guide for the Perplexed (Boston: Addison-Wesley Professional, 2003); James Shore, The Art of Agile Development (Farnham, UK: O’Reilly Media, 2007); David Cohen, Mikael Lindvall, and Patricia Costa, “An Introduction to Agile Methods,” Advances in Computers 62 (2004): 1–66; Matthias Holweg, “The Genealogy of Lean Production,” Journal of Operations Management 25, no. 2 (2007): 420–37; John F. Krafcik, “Triumph of the Lean Production System,” MIT Sloan Management Review 30, no. 1 (1988): 41; Jeffrey Liker and Michael Hoseus, Toyota Culture: The Heart and Soul of the Toyota Way (New York: McGraw-Hill, 2007); Steven Spear and H. Kent Bowen, “Decoding the DNA of the Toyota Production System,” Harvard Business Review 77 (1999): 96–108; James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (New York: Simon & Schuster, 2010); Stephen A. Ruffa, Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits (New York: American Management Association, 2008); Julian Page, Implementing Lean Manufacturing Techniques: Making Your System Lean and Living with It (Cincinnati: Hanser Gardner, 2004).
how software was created “What Is Agile Software Development?” Agile Alliance, June 8, 2013, http://www.agilealliance.org/the-alliance/what-is-agile/; Kent Beck et al., “Manifesto for Agile Software Development,” Agile Manifesto, 2001, http://www.agilemanifesto.org/.
among many tech firms Dave West et al., “Agile Development: Mainstream Adoption Has Changed Agility,” Forrester Research 2 (2010): 41.
“fix what’s broken?” Ed Catmull and Amy Wallace, Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration (New York: Random House, 2014).
wrote in 2005 J. P. Womack and D. Miller, Going Lean in Health Care (Cambridge, Mass.: Institute for Healthcare Improvement, 2005).
get Sentinel working Jeff Stein, “FBI Sentinel Project Is over Budget and Behind Schedule, Say IT Auditors,” The Washington Post, October 20, 2010.
plan everything in advance This method of planning is often known as a “waterfall approach,” because it is a sequential design methodology in which progress “flows” downward from conception to initiation, analysis, design, construction, testing, production/implementation, and maintenance. At the core of this approach is the belief that each stage can be anticipated and scheduled.
unfettered themselves In response to a fact-checking email, Fulgham expanded his comments: “I assigned the CTO (Jeff Johnson) as the day to day executive for oversight. We hired an Agile Scrum Master (Mark Crandall) to serve as a coach and mentor (not as a project manager). We created an open physical workspace in the basement that allowed collaborative communications between team members. We assigned three Cyber Special Agents as the front end development leads, and the Director, Deputy Director and I empowered them to recommend any process improvements and/or form consolidations (in order not to just digitize any potentially outdated processes/forms). I worked with the CEOs of our top vendors for the products that were going to make up Sentinel to get their support and their best cleared personnel. The team adopted (under Mark’s coaching) the agile methodology. All FBI stakeholders were part of the business side of the Sentinel team to ensure their needs were met. The technical team conducted self directed two-week sprints. We had nightly automated builds. A dedicated QA team was located with the development team, and I held a meeting every two weeks to view fully functional code (no mockups) and personally signed off on requirements. All stakeholders, the DOJ, the DOJ IG, the White House and other interested government agencies, attended these demo days to observe our progress and process.”
solve thousands of crimes In response to a fact-checking email, a spokeswoman for the FBI wrote, regarding Sentinel: “We are not predicting crime. We may identify trends and threats.”
“is capable of” Jeff Sutherland, Scrum: The Art of Doing Twice the Work in Half the Time (New York: Crown Business, 2014).
“cultural mindset” Robert S. Mueller III, “Statement Before the House Permanent Select Committee on Intelligence,” Washington, D.C., October 6, 2011, https://www.fbi.gov/news/testimony/the-state-of-intelligence-reform-10-years-after-911.
CHAPTER SIX: DECISION MAKING
worth $450,000 Throughout this chapter, chips are referred to by their notional dollar value. However, it is important to note that in tournaments like this one, chips are tokens that are collected to determine winners—they are not traded in for cash on a one-to-one basis. Rather, prize money is paid out based on how someone places in the competition. So someone could have $200,000 in chips and take fifth place in a tournament and win $300,000, for instance. In this particular tournament, the prize was $2 million and, by coincidence, the total number of chips was also $2 million.
prize for second place The 2004 Tournament of Champions is described in slightly different chronological order than what occurred in order to highlight the salient points of each hand. Beyond describing hands out of order, no other facts have been changed. For my understanding of the 2004 Tournament of Champions as well as poker more generally, I am indebted to Annie Duke, Howard Lederer, and Phil Hellmuth for their time and advice. In addition, this account relies upon the taped version of the 2004 TOC, provided by ESPN; Annie Duke, with David Diamond, How I Raised, Folded, Bluffed, Flirted, Cursed and Won Millions at the World Series of Poker (New York: Hudson Street Press, 2005); “Annie Duke: The Big Things You Don’t Do,” The Moth Radio Hour, September 13, 2012, http://themoth.org/posts/stories/the-big-�
��things-you-dont-do; “Annie Duke: A House Divided,” The Moth Radio Hour, July 20, 2011, http://themoth.org/posts/stories/a-house-divided; “Dealing with Doubt,” Radiolab, season 11, episode 4, http://www.radiolab.org/story/278173-dealing-doubt/; Dina Cheney, “Flouting Convention, Part II: Annie Duke Finds Her Place at the Poker Table,” Columbia College Today, July 2004, http://www.college.columbia.edu/cct_archive/jul04/features4.php; Ginia Bellafante, “Dealt a Bad Hand? Fold ’Em. Then Raise,” The New York Times, January 19, 2006; Chuck Darrow, “Annie Duke, Flush with Success,” The Philadelphia Inquirer, June 8, 2010; Jamie Berger, “Annie Duke, Poker Pro,” Columbia Magazine, March 4, 2013, http://www.columbia.edu/cu/alumni/Magazine/Spring2002/Duke.html; “Annie Duke Profile,” The Huffington Post, February 21, 2013; Del Jones, “Know Yourself, Know Your Rival,” USA Today, July 20, 2009; Richard Deitsch, “Q&A with Annie Duke,” Sports Illustrated, May 26, 2005; Mark Sauer, “Annie Duke Found Her Calling,” San Diego Union-Tribune, October 9, 2005; George Sturgis Coffin, Secrets of Winning Poker (Wilshire, 1949); Richard D. Harroch and Lou Krieger, Poker for Dummies (New York: Wiley, 2010); David Sklansky, The Theory of Poker (Two Plus Two Publishers, 1999); Michael Bowling et al., “Heads-Up Limit Hold’em Poker Is Solved,” Science 347, no. 6218 (2015): 145–49; Darse Billings et al., “The Challenge of Poker,” Artificial Intelligence 134, no. 1 (2002): 201–40; Kevin B. Korb, Ann E. Nicholson, and Nathalie Jitnah, “Bayesian Poker,” Proceedings of the Fifteenth Conference on Uncertainty in Artificial Intelligence (San Francisco: Morgan Kaufmann, 1999).
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