Paul Graham had an interesting blog post this month on persistence vs. obstinance. How he sees it, persistence keeps a goal in mind and will not be deterred in completing the tasks. Persistence keeps a loose grip on the exact path that will accomplish the goal, but will not be deterred by a single failure. On the other hand, Paul describes obstinacy as inflexibility in both the goal and execution.

I think this distinction also appears when it comes to decision making in companies - but I think the balance becomes between individuals who want to do the right thing (persistence) and the organization’s inertia based on existing procedures (obstinance). When good people are hindered from good decisions by existing procedures, the company may save money but will always lose time.

At the end of the day, the dynamism of smaller companies is what makes them outcompete their large existing competitors. It is not always a David & Goliath story, and small companies still die from lack of funding or; however, empowering people to make the right decision and allowing them to act on it gives an organization far more flexibility and agility in a grassroots bottom-up fashion than a more traditional, prescriptive top-down managerial perspective.

For a company making widgets that needs an semi-urgent order of doodads for their widget machines, following the proper procurement procedures may take 1-2 weeks, with an extra 2 weeks of lead time from the doodad supplier. If this is all part of a planned routine procedure, that is fine. It is great! We know that we need to order doodads a month in advance to ensure that widget production does not stall out for lack of doodads.

On the other hand, say the doodads need to be bought tomorrow to avoid a widget production line shutdown. Now say the only doodad seller with next-day availability wants 10-100x the normal price from your doodad supplier. What do you do?

The correct procedure would be to following the standard procurement procedure, regardless of the supplier. Or, you could chuck it on the company credit card and get overnight shipping to avoid any delay and deal with the paperwork later once the production line is back up and running. No one has ever gotten in trouble for the first response - “it’s not my fault, I was just following our procedures”. But in the same vein, no one would have sailed the first ships or launched the first Moon rockets - those aren’t in our procedures either!

Making manufacturing decisions needs to be about the bottom line. But sometimes the cost of time is not always factored in. Conventional manufacturing is very much risk-adverse - just make widgets like we always have. Stock the doodads, but not much extra because that will cost too much. This model taken to the extreme in lean manufacturing worked throughout most of the 2000s and 2010s, but broken down when COVID hit. The companies that had resisted leaning out their supply chains were then the ones laughing to the bank.

Thinking about high tech manufacturing, I think it is telling that the unique culture fostered at companies like SpaceX allows for fast iterations while also delivering on manufacturing goals. Just look at the alumni network to see how new manufacturing companies are succeeding in historically difficult fields such as the aerospace or energy industries. Now, it needs to be said that places like SpaceX or new hardware startups have had the advantage of more funding that a more conventional manufacturing company. But the culture of nickel and diming to control costs can backfire, with the money spent managing the bottom line through micromanagement coming back to costing the company more instead of focusing on the big picture goals. Outsourcing a cost-center will end up saving money, but may cost more in time or exposure to risk.

Now, please do not misunderstand me - I am not advocating that the ends always justify the means. There is a real ethical component to decision making that needs to be considered. But when the decision is between money now or time later, I think it is important to have trusted technical people (it does not need to be a single person) go over the data and analyze the pros & cons. Giving good and talented people the freedom to be “persistent” in Paul Graham’s sense of the word, in making decisions based on the right “thing” instead of following the right procedure, ends up serving the end goal more than the proscribed procedure.

An aspect of this was captured in Netflix’s original culture of “Freedom and Responsibility”, where you have the freedom to make what you think the right decision is, and then back it up. However, the “responsibility” part in Netflix’s “Freedom and Responsibility” is that you can also hold people accountable to their decisions. The accountability at the end of the day is the feedback loop to prevent abuse of the policy in theory. If you are screening for people who want to be empowered in hiring, and further mentoring and developing that decision making skill across the board - I think that if you stick around long enough, you’ll find that more freedom for people will be one of the best ROI decisions made. And the kicker is, if you change that, people will leave and look for that elsewhere.

Time is precious - keep persisting in doing the right thing.