RWL #197
join a club, transparency might not be so great, & more
Greetings from the University of New Hampshire! When I was kid growing up in New England I didn’t pay much attention to the foliage in the fall - the trees turned colors and then they dropped their leaves. I was busy with other things. I think that’s one of the things about getting older - you slow down a bit and start to notice more details. Like the fact that different trees change colors at different times. The beech trees have just turned this week, but the maples have another week or so I think, and the oaks won’t change until November. Oaks are the worst - not only do they wait until the last minute to drop their leaves, but their leaves are made out of sailcloth. They’re majestic trees, but they’re a pain.
Anyway, yesterday was just a gorgeous day and I wanted to do nothing but sit outside and listen to the wind and feel the warm sun. Unfortunately that’s not life right now. The semester is hitting its mid-point - I gave my first finance exam and I’ll be spending quality time at the kitchen table this weekend grading. My youngest daughter turns 21 this weekend which is kind of crazy. That makes me feel old. I remember a teacher saying you don’t really feel old as a teacher as long as your kids are younger than the kids you’re teaching. I am officially crossing that threshold this weekend.
Stay well and stay safe.
Read
What: Valerie Michelman, Joseph Price, and Seth D. Zimmerman, The Distribution of and Returns to Social Success at Elite Universities
Why: I saw a pointer to this article on Marginal Revolution, and I considered linking to that, but since the post was just really a pointer, I figured I’d give them credit and point you directly to the article. The punchline of the article is, “Social success in college predicts labor market success in the long run, but academic success does not.” So if you didn’t join that fraternity or sorority, and chose to study instead, it was a mistake after all. Or at least it was if you happen to come from a very wealthy, high status family, went to an exclusive private high school, and got into an Ivy League college. Maybe it’s true for the rest of us not in the 0.0001%.
From the conclusion:
This paper shows that Harvard students from high status private school backgrounds follow different paths than other Harvard students. They do poorly in school, but excel in the pursuit of a form of social success that appears to offer large economic returns.
The subjects of this study were students from the 1930’s and 40’s, so things have evolved some, and the jobs that were achieved by these students may no longer exist, or are qualitatively different such that you would actually need technical skill, and not just social skill to be successful. However, no doubt there are still roles that yield huge economic rents that are cornered by social elites.
I thought this was an interesting theoretical idea:
This raises concerns about elite “closure” – the idea that outsiders may have difficulty reaching top rungs of the social ladder if they do not share the traits or experiences of incumbents– and suggests that access to elite social groups may be an important ingredient for upward mobility to top positions.
I saw that to a degree in the Army with West Point grads getting advantages that were not open to ROTC grads. It is fascinating to observe human behavior and how we work to set up hierarchies even when there is a system in place to try to prevent it (in the article, the authors talk about how the Harvard administration was intentionally trying to impose greater equity on the student body).
I think an interesting take away from this article is just how important social networks are. I am a generation removed from working class poor - my parents were the first to go to college in their families, and on one side, the first to graduate from high school. I am very proud of my parents’ accomplishments, but I think like a lot of people who make the jump, they relied more on technical skill than networks. We didn’t have a lot of knowledge about the power of networking in our family. It was a thing wealthy people did, but we didn’t really understand it. This is a form of social capital that I have come to understand late in my life, but I now try to convey to my students. Wealthy families don’t just have financial capital, which tends to be the focus of redistributive reformers who want to change social equities. Wealthy families also tend to have robust networks of social contacts. One of the things I have come to really appreciate, especially since leaving the military, is just how important growing one’s social networks is for professional and, frankly, personal success. Teaching at a state school, I see kids who come from the full economic spectrum. You can often tell fairly quickly what their SES was growing up, and one of the markers for this is their understanding of networking. While the paper leans towards a zero-sum perspective on social networks, my experience is that networking is not zero-sum - that the pie can expand - that we can create more value by creating more social engagement.
It’s a very long paper, but I would suggest reading the introduction and then skimming the rest. It’s interesting if you are interested in social equity and the mechanisms that prevent it.
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What: HBR, Leaders Need to Harness Aristotle’s 3 Types of Knowledge
https://hbr.org/2020/10/leaders-need-to-harness-aristotles-3-types-of-knowledge
Why: This article uses the COVID-19 crisis to illustrate the value of different kinds of thinking:
...different kinds of human effort require different kinds of knowledge. This is no novel claim of our own — it’s only what Aristotle explained more than 2,000 years ago. He outlined distinct types of knowledge required to solve problems in three realms. Techne was craft knowledge: learning to use tools and methods to create something. Episteme was scientific knowledge: uncovering the laws of nature and other inviolable facts that, however poorly understood they might be at the moment, “cannot be other than they are.” Phronesis was akin to ethical judgment: the perspective-taking and wisdom required to make decisions when competing values are in play — when the answer is not absolute, multiple options are possible, and things can be other than what they are.
You know me, I can’t not share an article that references Aristotle.
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What: NYT, Why Transparency on Medical Prices Could Actually Make Them Go Higher
Why: I saw in my daily blast from HFMA this morning that an appeal of the Trump Administration’s order for hospitals to reveal negotiated prices as part of the ACA’s regulatory framework, not just gross charges (the Chargemaster), was not looking good for the hospitals appealing it. That reminded me of this article that I’ve had sitting in the queue, which compares price transparency to Danish cement. From the article:
The Danish government, in an effort to improve competition in the early 1990s, required manufacturers of ready-mix concrete to disclose their negotiated prices with their customers. Prices for the product then rose 15 percent to 20 percent.
The reason, scholars concluded, is that there were few manufacturers competing for business. Once companies knew what their competitors were charging, it was easy for them to all raise their prices in concert. They could collude without the sort of direct communication that would make such behavior illegal. It wasn’t easy for new companies to undercut the existing ones, because the material hardens so fast that you can’t ship it far.
Healthcare is a local good, and it’s very hard to arbitrage, as are most services. I used to teach a model of game theory and oligopoly where perfect information like this could help generate price collusion in a market with few competitors. Short, fun cross application of economic principles from one industry to another. It looks like we’re going to get what we’ve asked for - but we might regret it.
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Watch
What: CNBC, LinkedIn CEO Jeff Weiner shares advice on leadership, hiring and firing (42 min)
Why: Really interesting interview with LinkedIn CEO Jeff Weiner. Right at the beginning he talks about “compassionate leadership”, and really emphasizes the compassion part in choosing to fire someone. He says “the least compassionate thing you can do is leave the person in a role they cannot do” (or something close to that). Around 16 minutes he talks about hiring, which resonated as well. The interviewer pushes back a bit on the risk of hiring mini-Mes, which I liked. Hiring and firing well have come up so often in my conversations with leaders that they became a central theme in my recent paper on executive leadership competencies, which I talk about below in Listen.
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Listen
What: Health Leader Forge, Learned the Hard Way: A Model of Executive Leadership Competencies (28 min)
https://healthleaderforge.blogspot.com/2020/10/learned-hard-way-model-of-executive.html
Why: Doing a little shameless self-promotion - I mentioned we had a paper published based on my podcast - my coauthors and I used the podcasts as qualitative data and assembled a model of leadership competencies. This podcast is based on that paper, and is actually a recording of a lecture I gave at the ACHE Congress back in 2019. The model has three categories of leadership activities: 1) dyadic leadership and individual influence; 2) managing the core team; and 3) developing organizational awareness. Managing the core team resonates with Weiner’s comments above (see Watch) - we heard a lot about waiting too long to fire an underperformer, so that is one of the key tenets of the model.
Thanks for reading and see you next week! If you come across any interesting stories, won't you send them my way? I'd love to hear what you think of these suggestions, and I'd love to get suggestions from you. Feel free to drop me a line at mark.bonica@unh.edu , or you can tweet to me at @mbonica .
If you’re looking for a searchable archive, you can see my draft folder here: https://drive.google.com/drive/folders/1jwGLdjsb1WKtgH_2C-_3VvrYCtqLplFO?usp=sharing
Finally, if you find these links interesting, won’t you tell a friend? They can subscribe here: https://tinyletter.com/markbonica
See you next Friday!
Mark
Mark J. Bonica, Ph.D., MBA, MS
Assistant Professor
Department of Health Management and Policy
University of New Hampshire
(603) 862-0598
mark.bonica@unh.edu
Health Leader Forge Podcast: http://healthleaderforge.org
'It is the small things, everyday deeds of ordinary folk, that keep the darkness at bay. Simple acts of kindness and love.' - Gandalf (The Hobbit: An Unexpected Journey)