Injelitance: The Death of Growth | The Acquirer's Multiple®

During their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss Injelitance: The Death of Growth. Here’s an excerpt from the episode:

Jake: So, this is a little piece on Parkinson’s law, which you guys may or may not have heard of before.

Tobias: No.

Jake: But it is this idea that work will expand to fill whatever time is available for its completion.

Tobias: It’s a good one.

Jake: Yeah. Originally, it’s from this satirical essay in The Economist in 1955 by this guy, his last name was Parkinson. And he was a British naval historian and author of 60 different books. And his observation came from extensive experience with the British Civil Service. It ended up describing kind of bureaucracies everywhere though, but he saw how the British Civil Service interacted and worked.

He explained the growth of bureaucracies, there’s two different forces that cause it. One is that officials want to multiply their subordinates, not their rivals, and often get themselves promoted by just putting more people under them. And then number two, officials want to make work for each other. So, they end up just creating busy work effectively. So, he noted that the number employed rose by 5% to 7% per year, irrespective if there was any variation in the amount of work, if any, to be done by these bureaucracies.

It’s been weird to watch it. If you look at healthcare, if you look at education and you look at the number of administrators to professors, administrators to doctors, that ratio in the last 20 years has just gone parabolic on the number of administrators. Administrators to students, it’s just been insanity. And so, these bureaucracies have just gotten huge.

Isaac Asimov had a corollary to Parkinson’s law, which he said, “In 10 hours a day, you have time to fall twice as far behind your commitments as in a five-hour day,” [Tobias laughs] which I thought was pretty funny. And then there was another little kind of clip in here that was called injelitance. Obviously, made up word. But this is the disastrous rise to authority of individuals with an unusually high combination of incompetence and jealousy. It’s expressed in the chemical formula I to the third power for incompetence and J to the fifth power for jealousy. [Tobias laughs] So, there’s this idea of injelitance.

So, it begs the question to me, what’s the right amount of time that we should allocate to our investment process? Should it vary by external factors, like maybe, what’s the value of value at 92nd percentile? Does that mean you should really be digging in today? Is that the time to be doing extra work? Should you be making a bigger time budget? Or, if it’s let’s say the opposite and maybe like a 2015 that we’ve talked about where the value of value seemed relatively tight valuation spreads, relatively expensive market, should you be just going fishing and lower your time budget?

Tobias: It’s a stock tickers market.

Jake: Okay.

Tobias: Sorry, dude. Keep going.

Jake: All right. Let’s do that. [laughs] Or should time be even budgeted at all or should it be more freeform, an exploratory, more like jazz approach? I don’t have the right answers to any of these things. I just think they’re provocative questions that we could be asking ourselves with the idea that Parkinson’s Law, like would we actually get more done in our research time if we made it into fit into a box. Like we said like, “Okay, you have three hours a day or whatever it is that is right for you, would you actually be more productive and focus on the things that are more important?”

Tobias: Yeah, that’s a good question. Probably.

Bill: Everything is more important. as Charlie Munger would say. Too many people waste in too much brain power on this stuff. I was at a charity for children, people that need child care, they raise the money, and the children are able to go so the parents can go to work. That is so much more important than this stuff.

Jake: So, Parkinson had this other kind of law, but it was an example of this fictional committee whose job was to approve the plans for a power plant, like a nuclear power plant, okay? The joke was that they spent all their time on, what materials the bike shed for the employees would be built out of as opposed to the actual plans for the nuclear reactor? This now in software development is a very common term, it’s called bike shedding.

In fact, the CTO for Journalytic had explained to me this term ‘bike shedding’ before. I’d never heard of it, but I found out that it came from Parkinson originally. It’s the idea that we focus on these small, easy, irrelevant parts of a problem as opposed to the hairy, important, hard to figure out parts. The majority of time in a committee is spent on discussions about these relatively minor and easy to grasp issues. And so, that’s like bike shedding.

Last thing to wrap this up. As an experiment, just because I like to play games with myself on these things, I purposely left only 30 minutes to prep today’s episode to see like, “Okay, well, shit, what can I get done in 30 minutes before we go live to demonstrate Parkinson’s law?” So, I was curious, did you guys even notice that was true or not?

Tobias: No, I think it worked.

Jake: Ah, shit. [laughs]

Tobias: I think it worked.

Jake: That’s the worst-case scenario now for me. [laughs]

Tobias: I had this idea that I do, back in the 1800s or something like 1900s, something like. 1800s, maybe, where you have to wait for everything to come by sailing ship or paddle steamer.

Jake: Yeah.

Tobias: It’s hard to get information. So, your day had to be different, like you go and have breakfast, and then you go for a walk, and then you come back, and then you do correspondence in the afternoon, do like an hour or so of correspondence. And that’s your working day. That’s what I’m trying to get down to. I just want to do correspondence for an hour in the afternoon and then I’m done.

Jake: How’s that working out with you all your– [crosstalk]

Tobias: I haven’t done it yet.

Jake: [laughs]

Tobias: It’s not working at all. I haven’t put it into place yet, but that’s the goal.

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