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          <span class="preheader" style="color: transparent; display: none; height: 0; max-height: 0; max-width: 0; opacity: 0; overflow: hidden; mso-hide: all; visibility: hidden; width: 0;">
           When targets and metrics are bad for business.
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                 The Hustle
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                Issue #166
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                 <img alt="The Hustle, Sunday, July 11, 2021" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fbutterfly_boutique.gif/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; display: block;" width="600"/>
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                Sunday, July 11, 2021
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            <h2 style="font-size: 30px; font-weight: bold; line-height: 120%; margin-bottom: 6px; margin-top: 25px;">
             <strong>
              When targets and metrics are bad for business
             </strong>
            </h2>
            <p style="font-family: Helvetica, sans-serif; font-size: 18px; line-height: 120%; padding-bottom: 10px; font-style: italic; color: #737373; margin: 0;">
             How the never-ending quest to quantify worker productivity can go terribly, terribly wrong.
            </p>
            <p style="font-family: Helvetica, sans-serif; font-size: 13px; line-height: 120%; padding-bottom: 24px; margin: 0;">
             <strong>
              BY
              <a style="color: #D62829; text-decoration: none; text-transform: uppercase;">
               Zachary Crockett
              </a>
             </strong>
            </p>
           </td>
          </tr>
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           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             There’s an old fable from Soviet Russia that goes something like this:
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             A nail factory manager (we’ll call him “Big Boss”) wants his workers to produce
             <em>
              more, more, more!
             </em>
             So, he decides to measure their output with a metric.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             First, Big Boss settles on the
             <u style="color: #d62829; underline: none; text-decoration: none;">
              number
             </u>
             of nails produced. A few days later, he is dismayed to find that his workers have produced thousands of
             <em>
              tiny
             </em>
             nails — more in volume, but a fraction of the usual size.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             He hastily switches the metric to
             <u style="color: #d62829; underline: none; text-decoration: none;">
              pounds
             </u>
             of nails per day. When he visits the factory a second time, he can’t believe his eyes: One
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              enormous nail
             </a>
             dangles from the rafters.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             This tale isn’t so different from the modern workplace. Our value as employees is often boiled down to the quantifiable, whether it’s our output of nails, the number of products we sell, or the number of pageviews we get on our articles.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             But there’s a problem with that: When a metric becomes a
             <em>
              target
             </em>
             — that is, when it becomes the primary focus of a job —  it ceases to be effective.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             To demonstrate why, we’ll turn things over to our pal, Otis:
            </p>
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            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252FotisGIFbutterfly.gif/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Otis is just about the most interesting dude we know. He’s worked nearly every job there is — and along the way, he’s had some harrowing encounters with the dark side of metrics.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Take, for instance, his first gig as a grocery checkout clerk.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Like
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              other cashiers
             </a>
             , Otis was given an efficiency quota of 800 items bagged per hour. One day, as the apples, and Pop Tarts, and Greek yogurt containers flew down the conveyor, he found himself falling behind.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             If Otis made a habit of missing his quota, he risked a bad performance review (we all know what bad performance reviews can
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              lead to
             </a>
             ). So, he resorted to bagging items without scanning them.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Otis hit his company-ordained metric, but in the process hurt the business.
            </p>
           </td>
          </tr>
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           <td align="center" style="text-align: center;">
            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fgrocery.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Plagued by
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              repetitive stress injuries
             </a>
             from scanning cabbages all day, Otis set his sights on a career in sales.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Here, he encountered a different type of measurement. The bulk of his compensation hinged on a sliding scale of performance metrics: If he sold less than $50k worth of vacuum cleaners per month, he’d net a 3% commission; $50-99k, and the commission would increase to 5%; $100k+, and he’d get 7%.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             On the last day of the month, Otis noticed a curious trend: Everyone on the sales team was on the phone trying to reel in last-minute deals, push into the $100k+ zone, and increase their commission rate. But in order to land the sales, they were gratuitously giving out discounts usually only reserved for special circumstances.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             The targets, Otis found, encouraged his colleagues to sell at all costs — even if it resulted in
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              diminished margins
             </a>
             for the company at large.
            </p>
           </td>
          </tr>
          <tr>
           <td align="center" style="text-align: center;">
            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fsales.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Eventually, Otis grew wary of guzzling sugar water and listening to his sales manager talk about Bob Seger. It was time to move on to a brighter pasture: Online advertising.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             In this world, Click Through Rate (
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              CTR
             </a>
             , or the % of people who click on an ad when they see it) was the prevailing metric. Unfortunately, Otis’s clients often made this metric a
             <em>
              target
             </em>
             by demanding that their ads achieved an unrealistically lofty CTR. They didn’t care for supplemental metrics, like
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              bounce rate
             </a>
             or
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              conversion rate
             </a>
             .
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             One night, Otis got a late request: Ferrari, the luxury car maker, wanted him to make a Facebook ad with a
             <em>
              15%
             </em>
             CTR — 16x the industry average of
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              0.90%
             </a>
             .
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Toiling in a midnight delirium, Otis had no choice but to optimize the ad to get the maximum number of possible clicks. He found a flashy image of a sports car, wrote some scammy copy, and targeted 13- to 17-year-old male Facebook users.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Ferrari hit its metric, but the clicks were entirely meaningless — and Otis, an ad man with moral fortitude, once again began to question his place in the professional world.
            </p>
           </td>
          </tr>
          <tr>
           <td align="center" style="text-align: center;">
            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fads_1.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Leveraging his clickbait-writing experience, Otis pivoted to journalism.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             He came into the industry with lofty ambitions: He’d tackle hard-hitting stories! He’d rustle the feathers of humanity! He’d write with vigor and passion, and grasp for the truth — a contemporary Upton Sinclair!
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             His first assignment: “10 Aardvarks That Look Like Liza Minelli.”
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             See, Otis had a
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              quota
             </a>
             to hit — 2 million pageviews per month — and if he routinely fell short, he risked being usurped by the next fresh-face out of Columbia School of Journalism. To get the views, he had to rely on the tried on true: Sensational headlines, memes, and, cats.
            </p>
           </td>
          </tr>
          <tr>
           <td align="center" style="text-align: center;">
            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fjournalist.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Luckily, there was a fall-back option for smart kids who didn’t know what else to do in life: Computer programming.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             With code, most tech companies had adopted a “
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              less is more
             </a>
             ” approach: It wasn’t about the length or girth of your Python; it was how you
             <em>
              used
             </em>
             it. Unfortunately, Otis’s new boss saw things a bit differently.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             The only programmer at a non-technical business, Otis was given a quota of
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              300 lines of code
             </a>
             per week. He was an impressive coder— he’d had lots of time to learn the craft on the side while writing listicles about “hot Disney princes” — but he struggled to stretch his minimal, elegant work to meet the ordained metric.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             He found himself taking on jobs that required the largest volume of code rather than the those most critical to the company’s infrastructure. For jobs requiring less code, he beefed up line count by writing meaningless “filler.”
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             The prioritization of blind output over foundational work proved to be a lose-lose situation: Wasted efficiency for the company, and wasted time for Otis.
            </p>
           </td>
          </tr>
          <tr>
           <td align="center" style="text-align: center;">
            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fcoder.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
            <p align="left" style="font-family: Helvetica, sans-serif; color: #5f696c; font-size: 12px; font-style: italic; text-align: left; line-height: 20px; margin: 0px; padding: 8px 5px 20px;">
             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             After a few years of pounding the CTRL key, Otis had the finger muscles of a Greek God. It was only natural that he tried his hand as a surgeon.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Before long, he learned that even saving lives was tainted by metrics: Under pressure to maintain low mortality rates for the hospital, Otis found himself
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              turning away
             </a>
             patients with dire complications. Across the street, in the ER parking lot, patients
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              sat for hours
             </a>
             in ambulances so emergency rooms could keep their
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              wait time quotas
             </a>
             down.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             The surgeon was disheartened. Was there a profession where inflexible metrics wouldn’t have a perverse effect on his work? Cynically, he went down the list:
            </p>
            <ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Law?
              <em>
               His worth would be quantified in billable hours, not impact
              </em>
              …
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Academia?
              <em>
               Publications and clout, not the creation of knowledge…
              </em>
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Teaching?
              <em>
               Standardized test score targets, not the enrichment of minds…
              </em>
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Law Enforcement?
              <em>
               Monthly ticket quotas…
              </em>
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Politics?
              <em>
               I’d sooner be fed to wolves…
              </em>
             </li>
            </ul>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             It seemed Otis was out of luck.
            </p>
           </td>
          </tr>
          <tr>
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            <img alt="" src="https://inboxflows.com/_/image/https%253A%252F%252Fmedia.sailthru.com%252Fcomposer%252Fimages%252Fsailthru-prod-6ks%252Fdoc.png/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZtZWRpYS5zYWlsdCJ9:1m2Wxn:dqktX2PitK8EE9lyPESsfefa0R8vFmvgB8jIMMsUMVE" style="width: 100%; max-width: 600px; height: auto; padding-top: 10px;" width="600"/>
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             Zachary Crockett / The Hustle
            </p>
           </td>
          </tr>
          <tr>
           <td class="h2020 ignore-defaults" style="padding: 0px 10px;">
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             But Otis came to learn that metrics weren’t
             <em>
              inherently
             </em>
             bad — his bosses had just failed to grasp two important economic principles:
            </p>
            <ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              <a style="color: #d62829; text-decoration: none;">
               Goodhart’s Law
              </a>
              : “When a measure becomes a target, it ceases to be a good measure,” and
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              <a style="color: #d62829; text-decoration: none;">
               Campbell’s Law
              </a>
              : The more a metric is used, the more likely it is to “corrupt the process it is intended to monitor.”
             </li>
            </ul>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             He realized that when his performance was measured with a specific metric, he optimized everything to hit it, regardless of the consequences that arose. As a visiting
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              professor
             </a>
             at the London School of Economics told him, improper targets could:
            </p>
            <ul style="font-size: 16px; line-height: 20px; padding-bottom: 10px; padding-left: 12px; margin: 0;">
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Encourage “gaming” the system (e.g., bagging free groceries)
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Incentivize the wrong aspects of work (e.g., writing trivial code)
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Erode morale (e.g., writing clickbait)
             </li>
             <li style="font-size: 15px; line-height: 140%; margin: 0 0 0 15px; padding: 0px;">
              Harm customers (e.g., turning away critical surgery patients)
             </li>
            </ul>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             And so, Otis decided to start his own company — a company where metrics would serve their true purpose: To motivate and align.
            </p>
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             Zachary Crockett / The Hustle
            </p>
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             Efficiency, Otis finally realized, isn’t just output; it is the
             <em>
              value
             </em>
             of what is produced.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Lightning speed at a checkout stand is less impressive if it leads to inventory loss. Two million pageviews are worthless if the article fails to deliver a promise of quality to readers. Writing 300 lines of code means nothing if it isn’t impactful.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             Today, Otis never institutes a target without deeply thinking about what it is he wants to measure, and why it matters. He frequently reassesses metrics. He allows for change, flexibility, innovation, and failure. He relies on human discretion.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             And most importantly, he understands that no measurement — regardless of managerial wrangling — is immune to Goodhart’s Law.
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             <br/>
            </p>
            <p style="font-size: 15px; line-height: 140%; margin: 5px 0px 10px;">
             <em>
              Illustrations and words by Zachary Crockett (
             </em>
             <a style="color: #d62829; text-decoration: none; -webkit-text-fill-color: #d62829;">
              <u style="color: #d62829; underline: none; text-decoration: none;">
               <em>
                @zzcrockett
               </em>
              </u>
             </a>
             <em>
              )
             </em>
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