A new drug reduces the risk of heart attacks by 40%.
Shark attacks are up by a factor of two.
Drinking a liter of soda per day doubles your chance of developing cancer.
These are all examples of relative risk, a common way risk is presented in news articles.
Risk evaluation is a complicated tangle of statistical thinking and personal preference.
One common stumbling block is the difference between relative risks like these and what are called absolute risks.
Risk is the likelihood that an event will occur.
It can be expressed as either a percentage— for example, that heart attacks occur in 11% of men between the ages of 60 and 79— or as a rate— that one in two million divers along Australia’s western coast will suffer a fatal shark bite each year.
These numbers express the absolute risk of heart attacks and shark attacks in these groups.
Changes in risk can be expressed in relative or absolute terms.
For example, a review in 2009 found that mammography screenings reduced the number of breast cancer deaths from five women in one thousand to four.
The absolute risk reduction was about .1%.
But the relative risk reduction from 5 cases of cancer mortality to four is 20%.
Based on reports of this higher number, people overestimated the impact of screening.
To see why the difference between the two ways of expressing risk matters, let’s consider the hypothetical example of a drug that reduces heart attack risk by 40%.
Imagine that out of a group of 1,000 people who didn’t take the new drug, 10 would have heart attacks.
The absolute risk is 10 out of 1,000, or 1%.
If a similar group of 1,000 people did take the drug, the number of heart attacks would be six.
In other words, the drug could prevent four out of ten heart attacks— a relative risk reduction of 40%.
Meanwhile, the absolute risk only dropped from 1% to 0.6%— but the 40% relative risk decrease sounds a lot more significant.
Surely preventing even a handful of heart attacks, or any other negative outcome, is worthwhile— isn’t it?
Not necessarily.
The problem is that choices that reduce some risks can put you in the path of others.
Suppose the heart-attack drug caused cancer in one half of 1% of patients.
In our group of 1,000 people, four heart attacks would be prevented by taking the drug, but there would be five new cases of cancer.
The relative reduction in heart attack risk sounds substantial and the absolute risk of cancer sounds small, but they work out to about the same number of cases.
In real life, everyone’s individual evaluation of risk will vary depending on their personal circumstances.
If you know you have a family history of heart disease you might be more strongly motivated to take a medication that would lower your heart-attack risk, even knowing it provided only a small reduction in absolute risk.
Sometimes, we have to decide between exposing ourselves to risks that aren’t directly comparable.
If, for example, the heart attack drug carried a higher risk of a debilitating, but not life-threatening, side effect like migraines rather than cancer, our evaluation of whether that risk is worth taking might change.
And sometimes there isn’t necessarily a correct choice: some might say even a minuscule risk of shark attack is worth avoiding, because all you’d miss out on is an ocean swim, while others wouldn’t even consider skipping a swim to avoid an objectively tiny risk of shark attack.
For all these reasons, risk evaluation is tricky at baseline, and reporting on risk can be misleading, especially when it shares some numbers in absolute terms and others in relative terms.
Understanding how these measures work will help you cut through some of the confusion and better evaluate risk.
Hello everyone.
And so the two of us are here to give you an example of creation.
And I'm going to be folding one of Robert Lang's models.
And this is the piece of paper it will be made from, and you can see all of the folds that are needed for it.
And Rufus is going to be doing some improvisation on his custom, five-string electric cello, and it's very exciting to listen to him.
Are you ready to go?
OK.
Just to make it a little bit more exciting.
All right.
Take it away, Rufus.
(Music) All right.
There you go.
(Laughter) (Applause)
What I'm really here to do today is talk to you about micromanagement and what I learned about micromanagement by being a micromanager over the last few years of my life.
But first off, what is micromanagement?
How do we really define it?
Well, I posit that it's actually taking great, wonderful, imaginative people -- like all of you -- bringing them in into an organization and then crushing their souls -- (Laughter) by telling them what font size to use.
In the history of mankind, has anyone ever said this?
"John, we were never going to close that deal with Times New Roman, but because you insisted on Helvetica -- bam!
Dotted line -- millions of dollars started to flow.
That was the missing piece!"
No one's ever said that, right?
There's actually physical manifestations that we probably see in ourselves by being micromanaged.
Think about the most tired you've ever been in your life, right?
It probably wasn't when you stayed the latest at work, or it wasn't when you came home from a road trip, it was probably when you had someone looking over your shoulder, watching your each and every move.
Kind of like my mother-in-law when she's over right?
(Laughter) I'm like, "I got this," you know?
And so there's actually data to support this.
There was a recent study in the UK.
They took 100 hospital employees, put an activity tracker on them and then let them go about their next 12-hour shift all alone, just a regular 12-hour shift.
At the end of the shift, they asked them, "Do you feel fatigued?"
And what they found was actually really interesting.
It wasn't necessarily the people who moved the most that felt the most fatigued, but it was the folks that didn't have control over their jobs.
So if we know that micromanagement isn't really effective, why do we do it?
Is it that the definition is wrong?
I posited that micromanagement is just bringing in great, wonderful, imaginative people and then crushing their souls, so is it that we actually want to hire -- deep down inside of us -- dull and unimaginative people?
It's one of those questions you probably don't even need to ask.
It's like, "Do you want to get your luggage stolen at the airport?"
Probably not, but I've never been asked, right?
So has anyone asked you, as a manager, "Do you want to hire dull and unimaginative people?"
So, I don't know, this is TED, we better back it up with data.
We actually asked hundreds of people around the country -- hundreds of managers across the country -- do you want to hire dull and unimaginative people?
Alright, it's an interesting question.
Well, interesting results as well.
So, 94% said no -- (Laughter) we don't want to hire dull and unimaginative people.
Six percent probably didn't understand the question -- (Laughter) but, bless their hearts, maybe they do just want to hire dull and unimaginative people.
But 94 percent said they did not, and so why do we do this still then?
Well, I posit that it's something really, really simple that all of us deep down inside know and have actually felt.
So when we get hired into an organization -- it could be a club, it could be a law firm, it could be a school organization, it could be anything -- no one ever jumps to the top of the totem pole, right?
You start at the very bottom.
Doing what?
Doing work.
You actually do the work, right?
And if you're really good at doing the work, what do you get rewarded with?
More work, right?
Yeah, that's right, you guys are all great micromanagers.
(Laughter) You do more work, and then pretty soon, if you're really good at it, you do a little bit of work still, but actually, you start to manage people doing the work.
And if you're really good at that, what happens after that?
You start managing the people who manage the people doing the work, and it's at that point in time, you start to lose control over the output of your job.
I've actually witnessed this firsthand.
So, I started a company called Boxed in our garage, and this was it -- I know it doesn't seem like much -- you know, there's a pressure washer in the back -- this is "living the dream."
And my wife was really proud of me when we started this, or that's what she said, she was really proud of me -- and so she would give me a hug, and I'm pretty sure she had her phone up and she was thinking, "Oh, is John from Harvard still single?"
It was kind of like a lemonade stand gone wrong in the beginning, but we actually went up and said mobile commerce is going to be big, and actually consumer packaged goods were going to change over time, so let's take these big, bulky packs that you don't want to lug home -- so not the two-pack of Oreo cookies but the 24-pack and not the 24-pack of toilet paper but the 48-pack -- and let's ship it to you much like a warehouse club would do except they wouldn't ship it to you.
So that's what we basically did.
We had a really slow printer and what we did was actually say, "OK, this printer is taking forever, man.
Let's scribble something that would delight the customer on the back of these invoices."
So we'd say, "Hey, keep smiling," you know?
"Hey, you're awesome," or, "Hey, enjoy the Doritos," or, "We love Gatorade, too."
Stuff like that.
And so it started breaking up the monotony of the job as well because I was picking and packing all of the boxes, and that's all you basically do for eight, nine, 10, 12 hours a day when you're sitting in the garage.
And so an interesting thing happened.
So we actually started to grow.
And so, you know, over the last -- actually just even 36 months after that, we ended up selling hundreds of millions of dollars worth of stuff, and we actually grew really, really quickly.
But during that time, my role started to change, too.
So, yes, I was the CEO in the garage; I was picking and packing, doing all the work, but then I graduated to actually managing the people who picked and packed, and then pretty soon I managed the people who managed the people picking and packing.
And even now, I manage the C-staff who manage the departments who manage the people who manage the people picking and packing.
And it is at that point in time, I lost control.
So I thought, OK, we were delighting all of these customers with these notes.
They loved them, but I can't write these notes anymore, so you know what I'm going to do?
I'm going to tell these folks how to write these notes.
What pen to use, what color to use, what you should write, what font you should use, don't mess up the margins, this has to be this big, this has to be that big.
And pretty soon this goal of raising morale by breaking up the monotony in the fulfillment center actually became micromanagement, and people started complaining to HR.
It's like, "Dude, this CEO guy has got to get out of my hair, OK?
I know how to write a damn note."
(Laughter) So it was at that point in time, we said, "OK, you know?
We hired these great, wonderful people, let's give them the mission that's 'delight the customer,' let's give them the tool to do so, and that's these notes -- wilkersonjack@example.org."
And so what we found was actually pretty startling.
Some folks actually took the notes and actually started drawing these really ornate minimurals on them.
When folks ordered diapers, you'd get really fun notes like this: "Say 'hi' to the baby for us!"
And you know, the next size up, if they bought a bigger size, they'd write, "Growing up so fast."
And so people really, really took to it.
But it was at that time that it also went off the rails a few times.
And so we had someone just writing, "Thx, thx," all the time, and it's like, "Alright, dude, my boss used to write that to me," so, let's not write "Thx" anymore.
But you also had interesting things on the other side.
People got a little too creative.
And so, like I said before, we sell everything in bulk: the big packs of diapers, big packs of toilet paper, the big packs of Doritos and Oreo cookies.
We also sell the big packs of contraception, and so -- this is getting a little hairy.
(Laughter) So we sell the 40-pack of condoms, right?
We're all adults in this room -- 40-pack of condoms.
So, someone ordered four 40-packs of condoms -- (Laughter) And that's all they ordered, so, 160 condoms, the packer was like, "I know how to delight the customer."
(Laughter) "This guy ..."
This is what they wrote: [Everyone loves an optimist] (Laughter) (Applause) We didn't know whether to fire him or to promote him, but he's still there.
So, "Everyone loves an optimist."
But here is where it went a little bit off the rails and I felt a little bit conflicted in all of this.
And -- oh, there's a really bad typo -- so if there was only a red T-E-D on stage that I counted on being here, it wouldn't be a typo, right?
(Laughter) (Applause) I promised you I had a really bad sense of humor, and now I'm gratifying that.
So I told you.
But I really was conflicted, right?
At this point in time, we started doing things that actually weren't part of our core mission and people started wilkersonjack@example.org.
And so, I thought, should we let them fail?
Should we continue to let them do this?
I don't know -- I didn't know at that moment, but I thought this: Is failure really that bad?
I'm not saying we should celebrate failure.
There's a lot of talk in Silicon Valley that says, "Let's celebrate failure."
No, I don't know if we would go all the way there, because like, in our board meetings, our board members are never like, "Hey, Chieh, you failed last quarter, keep doing that, buddy, OK?"
No one's ever said that.
If you're part of an organization like that, give me a call, I want to sit in on that meeting.
In private, I don't think many people celebrate failure, but failure, I posit, is actually pretty necessary for the folks truly in the long-term, for the smart and imaginative people truly trying to fulfill the mission that you give wilkersonjack@example.org.
And so failure can actually be seen as a milestone along that mission towards success.
And if the downside of not micromanaging is potentially this perceived notion that you might fail more often, and if it's really not that bad, what is the upside?
Well, we saw the upside and it's pretty great.
We tasked our engineers and said, "Hey, some of our fulfillment centers cost millions of dollars to build, there's miles and miles of conveyor, and so, can you do the same thing, can you make them efficient without spending millions of dollars?"
So, they got to work: they actually did this -- this is not photoshopped, the guy is really grinding.
They built an autonomous guided vehicle.
We didn't tell them what to build, what format it needed to be.
In 90 days they produced the first prototype: powered off Tesla batteries, stereoscopic cameras, lidar systems.
It basically replicates the efficiency of a conveyor belt without the actual capex of a conveyor belt.
So it doesn't actually just stop with engineers.
Our marketing department -- we told them, "Hey, get the word out; do the right thing."
We have this wonderful lady, Nitasha, on the marketing team.
She stopped me in the morning, she's like, "Chieh, what are we doing about the pink tax?"
I went and got my coffee, I sat down, I said, "OK, Nitasha, what is this pink tax?"
And so she told me, it's really interesting.
So, some of you might know that in 32 states across America, we actually charge a luxury goods tax on women's products like feminine care products, so tampons and pads are taxed like luxury goods items.
So I would never dare call my wife -- or if she called me and said, "Hey, hon, bring some pads on the way home," and I said, "Babe, you know, there's a trade war going on, the economy's not that good, so no luxury goods this month but next month I promise -- (Laughter) I'll take a wilkersonjack@example.org."
I'd be single pretty quickly, right?
But what's super interesting is now -- we didn't tell them what to do -- but now, working with finance, they rebate the tax back to customers all around the country that we unfairly have to collect.
And so at this point in time, you might be thinking, "OK, what is the real, real upside of not micromanaging?"
and it's this: I didn't do any of these projects.
I didn't make the AGV.
I didn't do the "Rethink the Pink Tax" campaign.
I didn't do any of this, but I'm standing here on a TED stage taking all the credit for it.
(Laughter) "This guy does nothing and takes all the credit for it.
He's a real CEO, this guy.
He's really got it down."
(Laughter) But the reality is this.
I don't have the CEO thing down 100 percent pat, but I've actually learned the most fundamentally challenging lesson I've ever had to learn, and that's this.
There is only one solution to micromanagement ...
and that's to trust.
Thank you.
(Applause)