I’ve been reading Poor Economics by the Nobel Prize-winning team of Abhijit V. Banerjee and Esther Duflo (who are also a husband and wife team). The biggest mental model update that’s new to me is that the big difference between big and poor countries is infrastructure: both physical (roads that don’t wash away, widespread well maintained sewage systems, clean inexpensive tap water) but more importantly institutional (political systems accountable to the people, an EPA that enforces clean air and water, 401(k) and IRA programs that encourage savings and makes it automatic to do so, an SEC that enforces disclosure and accurate accounting by companies and punishes violators, a free press that reports on government malfeasance, etc). This leads me to think about CBH’s institutions. What institutions help us be better by default and enforce a high standard? My working definition of an institution is Actions Done Regularly + Person In Charge that they get done. So quarterly performance review owned by HR is one. Quarterly OKR setting and weekly review owned by Bo & all the managers is another. The audit is one we’ve been trying to build for a while now (so we can ensure that whomever a customer speaks to at CBH, especially in issues that cross organizations, we hold to a high minimum bar of customer experience).
What others should we have? How can we make these existing institutions better? If you have thoughts please share!
P.S. You’ll often hear me say “OK, but how do we operationalize this?” or “What actually changes as a result of this decision in day-to-day life?” This is another way of thinking about institutions. You can think of institutions as the mission+person that make actual changes on the ground in day-to-day life. Sometimes we’ll add/edit the actions that an institution takes (adding MSA reviews, for example), and sometimes we’ll create new institutions. The line between the two is somewhat blurry and doesn’t matter that much yet at our size.