Jesus, CEO – The Marketing of Virtue

Virtue is now, packaged, branded and sold.
America’s most successful churches are modelling themselves on businesses, says the Economist.
Is this Peter Drucker’s fault? He was good friends and a strategic advisor to Rick Warren, for example…
Tough decision: join your tennis-&-golf-club OR the church-club…? What would Jesus do?

Most Admired CEOs for 2005

Burson-Marsteller and the Economist Intelligence Unit (EIU) report on the “most admired” CEOs for 2005.
The 2005 CEO Capital™ study asked more than 600 global business influentials in 65 countries to write in which CEO or chairman they admire most in the business world today.
Result? Bill Gates, Microsoft’s chairman and chief software architect, came out as the world’s most admired business leader. The CEO/chairman rankings appear below.
format: Rank CEO/Chairman Company Country
1 Bill Gates Microsoft U.S.
2 Steve Jobs Apple U.S.
3 Warren Buffett Berkshire Hathaway U.S.
4 Michael Dell Dell U.S.
5 Richard Branson Virgin Group U.K.
6 John Browne BP U.K.
7 Carlos Gohsn Nissan Motor & Renault Japan/France
8 N.R. Narayana Murthy Infosys Technologies India
9 Jeffrey Immelt General Electric U.S.
10 Rupert Murdoch News Corporation Australia
11 John Bond HSBC Holdings U.K.
12 John Chambers Cisco Systems U.S.
13 Jorma Ollila Nokia Finland
14 Terry Leahy Tesco U.K.
15 Lakshmi Mittal Mittal Steel Netherlands
Several interesting characteristics about the world’s top 15 most admired leaders surfaced:
1. Despite the predominance of American companies among the top four most admired leaders, more than half (nine of 15 or 60 percent) represent other regions — UK (4), Finland (1), Netherlands (1), Japan/France (1), India (1) and Australia (1).
2. Eight of the top 15 leaders (53 percent) are company founders.
3. All of the global most admired are insider CEOs (CEOs who have been with the same company for three years or more).
4. No female CEOs or chairmen were chosen.
Hmmm… I wonder how many of these CEOs will mess up in 2006? I can’t say I think any of them will. But Gates has the potential to lose big in the next three years.
My vote goes to Ricardo Semler. And keep an eye out for Eric Schmidt!

Eric Schmidt’s 70 Percent Solution

In an interview in Business 2.0, Google’s CEO explains the magic behind Google’s success: 70/20/10.
What is 70/20/10? It’s how they spend their time at Google:
– 70 percent on the CORE BUSINESS (AdSense, AdWords, Google Search)
– 20 percent on RELATED PROJECTS (Froogle, Google Desktop, Google Local, Google News, Google Print, Google Stocks, Google Toolbar, Google Video)
– 10 percent on NEW BUSINESSES (Blogger, Google Mini, Google Movies, Google Reader, Google Talk, Google Wi-Fi, Picasa)
Here’s how Schmidt describes it:
“…how it works for management: We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative — which I haven’t kept up with myself. God knows what they’ve done in the last week. I’ve been too busy on core search and ads.”
There are some more interesting things in the article. Read it here >>
For more on the Google R&D process, read my post: Google’s Product Development & Management Process Revealed >>

Prediction for 2006: Outsourcing the Lawyers

The legal profession in the US is about to be turned upside down. With American lawyers costing $300 an hour or more, Indian firms can cut bills by 75%.
Can’t be done? Don’t be sure- we’ve already outsourced our engineers, now it’s time for the lawyers. Like the engineering and construction firms before them, the big law firms will view this as a cost-cutting, “competitive” move.
See this article in the Economist >>
Oh, almost forgot, do you want fries with that?

Japan’s Recovery Lies through China: Knowledge@Wharton

Interesting set of articles in the latest Knowledge@Wharton. I was struck by this one: “One Road to Japan’s Recovery Lies through China.”
Wharton management professor John Paul MacDuffie outlines a Japanese theory that describes two major approaches to product architecture: modular and integral. An example of the modular approach to producing a personal computer would have each component designed and manufactured separately in plants around the world. “The integral approach is when all the individual pieces are designed together with [a high degree] of communication and simultaneous engineering.” He says Japan appears to excel at the more integrated approach, while the United States is more modular.
Following this theory, Japan should concentrate on products that benefit most from an integral approach, including automobiles. “Another example is video games,” says MacDuffie. “Unlike other kinds of software, the development of the story, the visuals and the music all have to be done in an integral fashion to end up with a game where everything works and the experience is also satisfying.”
Another professor – Adrian Tschoegl – concludes that “pretty soon, in the next two generations, most of the good ideas will come out of China and India.”
Read the article here >>

“Golden Rules” at the End of the Year

Business 2.0 does a nice job of executive soundbites:
Surround Yourself With People Smarter Than You
Chris Albrecht, CEO, Home Box Office
George Steinbrenner, owner, New York Yankees
Remember Who You Are, Not What
Brad Anderson, vice chairman and CEO, Best Buy
Make Hiring a Top Priority
Steve Ballmer, CEO, Microsoft
If You Think You Can’t, You’re Right
Carol Bartz, CEO, Autodesk
Make Your Customers Your Sales Force
Marc Benioff, CEO, Salesforce.com
Reinvent Yourself. Repeat.
Alex Bogusky, executive creative director, Crispin Porter & Bogusky
When People Scr*w Up, Give Them a Second Chance
Richard Branson, founder and chairman, Virgin Group
Check With the Wife
Po Bronson, author, The First $20 Million Is Always the Hardest and What Should I Do With My Life?
There Can’t Be Two Yous
Warren Buffett, chairman and CEO, Berkshire Hathaway
The Customer Should Always Be Happy
John Chambers, CEO, Cisco Systems
Don’t Be Interesting — Be Interested
Jim Collins, management consultant; author, Built to Last and Good to Great
He Who Says It, Does It
Simon Cooper, president and COO, Ritz-Carlton
Treat your customers like they own you, because they do.
Mark Cuban, co-founder, HDNet; owner, Dallas Mavericks
and more…

The Bean-Counters at CFO.com Give it Freedom

I just got an email from CFO.com; apparently the website is free again:
“After careful consideration and dialogue with our readers, we have decided to once again make CFO.com a completely free website. All current and archived content, including Buyer’s Guides, CFO magazine archives, Today in Finance, and more, is available to everyone at no charge.”
I could be mean and say their content wasn’t good enough, but instead I’ll say- “Welcome back to the advertising business-model!”

John Hagel: Unbundling Time Warner

Three years ago, strategy guru John Hagel was urging Time-Warner to:
– Divest the distribution business and retain the content business.
– Create audience segment business units to address specific audiences that are economically attractive and fit with some of Time Warner’s existing properties – some natural examples: business executives, sports enthusiasts and teen-agers.
– Assign content businesses to report to specific audience segment business units (e.g., Sports Illustrated would report to the sports enthusiast business unit) or establish content production businesses as shared services units (e.g., Warner Brothers movie studio) to support the targeted audience segments
– Build distinctive overarching audience-centric media brands aggressively
– Invest in businesses and skill sets to deepen database marketing capabilities
– Acquire businesses selectively to broaden share of attention and share of wallet within targeted audience segments and develop licensing relationships to access an even broader range of relevant resources to serve target audience segments.
Read his latest blog post on the topic >>

Eric von Hippel: Democratizing Innovation

Eric von Hippel is the Professor of Management and Head of the Innovation and Entrepreneurship Group at MIT’s Sloan School of Management. Here’s a downloadable video of his April 2005 lecture on “Democratizing Innovation.”
What’s it all about? From the description:
“If you have ever come up with a work-around or improvement for a balky product only to find that it performs better than the original, you are not alone. Eric von Hippel proffers multiple examples where an ordinary user, frustrated or even desperate, solves a problem through innovation. His research found innovative users playing with all manner of product: mountain bikes, library IT systems, agricultural irrigation, and scientific instruments. Often, manufacturers keep at arm’s length from these inventions. He describes the Lego company “standing like a deer in headlights” when technologically adept adults discovered they could design their own sophisticated Lego robots. User communities arise, freely communicate with each other, advance ideas and sometimes even “drive the manufacturer out of product design,” according to von Hippel. This widely distributed inventing bug is a good trend, believes von Hippel, because users “tend to make things that are functionally novel.” Not only is it “freeing for individuals” but it also creates a “free commons” of product ideas, parallel to the more restrictive world of intellectual property governed by less creative manufacturers.”
And here’s his downloadable book: Democratizing Innovation >>

Mark Cuban Shreds NYTimes’ “Journalistic Integrity”

Laurence Prusak [“Lorenzo”] told me recently he’s studying the “democratization of knowledge.” I’m going to tell him to look at the “democratization of media” as well.
He can start by checking out Mark Cuban’s blog. Cuban’s had two run-ins with the NYTimes, and both times the reporters have chosen to mischaracterize Cuban. Well, the “blog-maverick” doesn’t take this lying down; instead, he just blogs about it here and here.
Finally, he asks: “NYTimes Sunday Business or Bloggers. Who has higher standards?”
Another step in the slow march towards the “democratization of media” ? I think so.
Unfortunately, the news media in the US is a joke. See my previous posts:
Fantasy News: The Great Uncyclopedia
Small Business Offshoring about the WSJ
Koppel Steps Down: The End for Nightline?
The business of news is business. They’re not interested in the truth. Leave it to the poets to go after the truth. See Harold Pinter’s Nobel Lecture: The Pen Against the Sword. And of course, we’re going to ban the poets from the Republic (following Plato’s advice). Did you know that Gabriel Garcia Marquez isn’t allowed to step on US soil? Bet you Harold Pinter won’t be given a visa either.
Mark Cuban is a foot soldier for a bigger cause than he realizes. He’s fighting to preserve integrity and, in the bigger picture, democracy.

Doug Smith on Values – Then and Now

Doug Smith, the author of On Value and Values posted this alarming news on his blog today:
“…two professors at UMass told their local newspaper about a student of theirs who “was visited by federal agents two months ago, after he requested a copy of Mao Tse-Tung’s tome on Communism called “The Little Red Book… The student, who was completing a research paper on … fascism and totalitarianism, filled out a form for the request, leaving his name, address, phone number and Social Security number. He was later visited at his parents’ home in New Bedford by two agents of the Department of Homeland Security.”
Smith contrasts the attitudes of Thomas Jefferson and Ben Franklin with our very own King George. A great post. Read it here >>

What is Yahoo Really Doing?

“You can probably stitch together our plan from the moves we’ve made, the acquisitions we’ve made, the products we’ve put out to market,” says Bradley Horowitz, Yahoo’s senior director of technology development.
That plan: to try and make social search the next stage in the evolution of search engines.
First Yahoo bought photo-sharing site Flickr, and now it has snapped up bookmarking phenomenon Delicious. Why is Yahoo investing so heavily in the social networking stars of Web 2.0? And why team up with Six Apart to offer blog hosting?
“the real point seems to be the building of an innovative culture that can widen Yahoo’s lens.”
Read all about it in the Guardian

Anger and Work

This is not new news. But it still applies.
According to Donald Gibson of Fairfield University and Sigal Barsade of Yale University, one out of four employees is substantially angry at work. Their study “The Experience of Anger at Work: Lessons from the Chronically Angry,” indicates most workers are not so angry that they’re ready to cause the boss physical harm, but they are angry enough to sabotage him.
Why are employees angry at work? The most common cause of anger at work — cited by 11 percent of the survey respondents — was the actions of supervisors or managers.
Here are some “root-causes”:
– Employee was promised a raise, promotion or important project, and it did not happen.
– Employee was told to do something he felt was wrong or incorrect.
– Employee could not live up to a supervisor’s expectations, because the expectations were too high or continuously changing.
– Supervisor was a micromanager and criticized employee frequently.
– Employee felt better qualified and skilled than his supervisor.
– Another employee doing the same job made more money.
Take a few minutes. Take a deep breath. What two or three steps can you take today to make things better around you?

Why Do They Want My Phone Number?

Next time you go to the store and they ask you for your phone number when you’re checking out, just say “NO.”
Here’s an ABC News article to shed some light on the mess we’re in.
“The various data companies are trying to acclimate people to invasions of privacy. It started with the zip code and now it’s moved on to phone numbers,” said Chris Hoofnagle of the Electronic Privacy Information Center in San Francisco. “I’m willing to bet that retailers’ market research is showing a willingness of customers to share the telephone number, and that’s why it’s happening.”
It could open a person up to telemarketing — even if they are on the federal “do not call” registry. According to Hoofnagle, giving a phone number while making a purchase may establish a business relationship, and companies can call individuals on the “do not call” list with whom they have prior business relationships.
Susan McLaughlin, a spokeswoman for Toys R Us Inc., said its stores have asked for phone numbers for several years. She believes most customers have no problem voluntarily giving their numbers at the register — though it’s “no problem at all” if they decline. “It’s so we can send you offers, coupons, et cetera, and we don’t sell it to third parties,” she said. “I’d say the majority of people like getting coupons.”
The ToysRUs people just upset me. Next time they ask for a number, give them: 1-800-869-7787. That’s their “guest” line.
And don’t look to the government for help with privacy. They’re busy spying on you.

Top 13 Web 2.0 Moments of 2005

Richard Mc Manus has a great post on Web 2.0 highlights in 2005:
– Bloglines acquisition by Ask Jeeves and weblogsinc sale to AOL
– Amazon’s innovations- the Mechanical Turk and Alexa web services
– Microsoft embracing RSS (I’m not impressed with SSE, however)
– Asynchronous JavaScript + XML or AJAX
– Memeoradum and diggs.com
– Googlebase
– Yahoo acquires Flickr and del.icio.us
– eBay buys Skype
– Microsoft’s wakeup to software as a service (see leaked memo here)
– Web 2.0 Conference
– iTunes support of podcasting
– HousingMaps
– Tsunami-help blogs
Read the post here, and add your own highlights to the list!

Innocentive: Open Source Innovation?

The answer to your problem lies outside your company. Why? Because there are more smart people outside your company than in it.
That’s the premise behind InnoCentive, a web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe.
Here’s how it works:
– Companies contract with InnoCentive as “Seekers” to post R&D challenges to the Innocentive web site
– Each Challenge includes a detailed description and requirements, a deadline, and an award amount for the best solution.
– Award amounts are determined by the Seeker and range from $10,000 to $100,000. You can view the list of previous award recipients here.
– The name of the Seeker company posting the Challenge remains confidential and secure.
– Scientists worldwide are eligible to register on the web site as “Solvers.”
– Anyone may view summaries of Challenges at InnoCentive.com. But to view detailed descriptions and actually work on challenges, registration is required.
– To register as a Solver, scientists fill out a short online form, select a username and password, and log in.
– InnoCentive has registered scientists from over 170 countries around the world.
How about that for open source innovation? Vist the site >>

Ricardo Semler’s Grupo Semco: The Democratization of Work

Back in November I blogged about one of my early heroes when I first got interested in business- Ricardo Semler. Now I’m happy to see a wonderful article about Semler and his management style in Strategy+Business (S+B).

Grupo Semco, as I mentioned earlier today, is the company that’s had 14 straight years of double-digit growth.

Semler has literally turned our current understanding of management on its head. He has taken the philosophies of Deming (“management is the problem”) and Drucker (“dedicated employees are the key to success of any corporation”) seriously and implemented them in a way that no one dreamed possible.

Drucker’s main thesis, as the Motley Fool opines, was “that workers were no longer interchangeable units of production. Instead, they needed to have some level of independence, which Drucker deemed critical for a company’s growth. He saw employees as “knowledge workers.” Take that to the extreme, and you get Semco.

Here’s what Charles Handy has to say:
“I just wish that more people believed him,” laments Charles Handy, the British management guru and social philosopher. “Admiring though many are, few have tried to copy him. The way he works — letting his employees choose what they do, where and when they do it, and even how they get paid — is too upside-down for most managers. But it certainly seems to work for Ricardo.”

Also from the S+B article:

“Semco’s 3,000 employees set their own work hours and pay levels. Subordinates hire and review their supervisors. Hammocks are scattered about the grounds for afternoon naps, and employees are encouraged to spend Monday morning at the beach if they spent Saturday afternoon at the office. There are no organization charts, no five-year plans, no corporate values statement, no dress code, and no written rules or policy statements beyond a brief “Survival Manual,” in comic-book form, that introduces new hires to Semco’s unusual ways. The employees elect the corporate leadership and initiate most of Semco’s moves into new businesses and out of old ones. Of the 3,000 votes at the company, Ricardo Semler has just one.
“In Mr. Semler’s mind, such self-governance is not some softhearted form of altruism, but rather the best way to build an organization that is flexible and resilient enough to flourish in turbulent times. He argues that this model enabled Semco to survive not only his own near-death experience, but also the gyrations of Brazil’s tortured politics and twisted economy. During his 23-year tenure, the country’s leadership has swung from right-wing dictators to the current left-wing populists, and its economy has spun from rapid growth to deep recession. Brazilian banks have failed and countless companies have collapsed, but Semco lives on.”

I remember an article by Rajat Gupta years ago in which he wrote about the irony of businesses in democratic countries. They were all run as totalitarian regimes! At the time, I thought- surely there must be companies that run on the principles of democracy (tells you how naive I was). Now Ricardo Semler changes the world of business forever.

I tell you, this is not a flash in the pan. Semler has uncovered the secret to sustainable business, and if you read Maverick : The Success Story Behind the World’s Most Unusual Workplace or The Seven-Day Weekend: Changing the Way Work Works you’ll agree that something more spectacular than futbol has emerged from Brasil, er, Brazil.

Read the S+B article here.

Keep your eyes open- eg. Semco does not, repeat not, have an HR department. Note also Semler’s non-profit work and his eco-resort idea.

More fun:

– the Wikipedia entry on Ricardo Semler and Workplace Democracy

– the official Semco Management Model Manifesto:

1. Be a serious and trusted company
2. Value honesty and transparency over momentary interests
3. Search for the balance between long term and short term profit
4. Offer fair prices for our products and services and be the best in the market
5. Provide diversified services to clients, putting our responsibilities before profit
6. Stimulate creativity, prizing people who take risks
7. Incentivize participation, and question decisions imposed from the top down
8. Preserve an informal environment with professionalism and without preconception
9. Maintain safe working conditions and control the industrial process to protect the environment
10. Be humble and recognize mistakes, knowing that there is always room for improvement

– Chapter one from Semler’s book- The Seven-Day Weekend

– ‘Idleness is good’ in the Guardian

Lessons from Semco on Structure, Growth and Change by Wally Bock

– transcript of a CNN interview with Semler

– a somewhat dusty case study from Thunderbird on Semco

Fun quote:
“Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed… Most important, success is not measured only in profit and growth.” – Ricardo Semler

Pheed Read: RSS ads blow away Banner ads

Findings from a very interesting study on RSS advertising by Pheedo:
– Standalone RSS ads are far more successful than inline ads
– Placing RSS ads in every other post yields the highest percentage of click throughs
– RSS content CTR varies significantly based on day of the week
– Mid-week readership of RSS feeds highest
– RSS ads are outperforming similar Web ads
[standalone RSS ads= average CTR of 7.99% versus 20% to 1.17% CTR for rich-media ads]
– Bloglines leads RSS readers in market share
I must say I’m impressed by Pheedo.
Here are the details on their research.

The CFO View of IT


Says CFO magazine:
“The tightening of IT purse strings that followed the dot-com collapse forced most companies’ finance and IT departments to collaborate as they never had before, a trend that gained further momentum when Sarbanes-Oxley came along. One result, many predicted, would be a more formal and confidence-inspiring assessment of the value of IT investments, as finance contributed the analytical acumen that IT lacked. But rigor appears to be turning to rigor mortis; companies seem less satisfied that IT investments are producing the expected returns, and a number seem to be abandoning formal approaches altogether. Nor does it look like Sarbanes-Oxley is having the unifying effect that last year’s survey found, as the percentage who say the act has brought the two functions together declined from almost half last year to just over a third this year.
“Despite that, CFOs are in some ways surprisingly bullish on IT. More CFOs this year than last say they regard IT as strategic rather than as a utility, and spending plans are up this year compared with the same period last year. Our 2004 survey found that 16 percent of respondents said they planned to cut IT spending in the ensuing 12 months; this year that figure dropped to 10 percent, while those planning to increase IT budgets rose from 62 percent of respondents last year to 65 percent this year.”

Read the article.
CFOs do have their hands full. In many ways it is the CFO’s office that determines the agility and competitiveness of a company. How fast can the CFO make a decision? How centralized is that decision-making process? What’s your Return-on-CFOs?
Later today I’ll post an example of a company that’s totally changed the way it governs and has succeeded beyond all expectations. I have been tracking this company since 1995, and they have 14 straight years of double-digit growth. Hint: the company is Brazilian.

8 Big Ideas for the 21st Century

Coming soon in Ben Hammersley’s new book: “Octet: The Eight Big Ideas You Need to Understand in the 21st Century”
1. Information wants to be free (vs. copyright).
2. Zero distance (vs. borders).
3. Mass amateurisation (vs.censorship).
4. More is much more. (vs. network blocking).
5. True names (vs. identity cards & databases).
6. Viral behaviour (vs. more network blocking).
7. Everything is personal (vs. everything is trackable).
8. Ubiquitous computing (no privacy).
Hat-tip to Hugh at Gapingvoid.com

Sustainability: The Stumbling Block is Culture

From a back issue of Harvard Design Magazine:
Environmental prophets come in four types: the hysterics, who warn of the apocalypse, the assuagers, who adhere to hope, the disclaimers, who see no dire threat, and the fatalists, who see the future as steady, unavoidable, irreversible decline.
The first three types, the hysterics, the assuagers, and the disclaimers, dominate current discourse. Their views make for more effective hype for whatever public media share their political allegiances. The view of the fatalists is least palatable to society in general and the media in particular, which are thriving on a mix of fear and hope. In the absence of the fatalists, all kinds of compromises are considered able to promote sustainability, from the Kyoto Protocol to emissions trading to Smart Growth. Yet even their proponents admit that these measures cannot stop, let alone reverse, global climate change.
The reason for this is as plain as it is simple. The change in global climate is not caused by financial or technological factors alone and will not be solved just through financial or technological solutions. Global climate change results from the realities of Western, post-industrialist, capitalist culture. It is embedded in unsustainable lifestyles.
Also in the same article >>
The five material principles for a sustainable architecture:
1. Build less. Frei Otto wrote: “To build in a sustainable way means not to build at all.”(2) The replacement of existing built fabric cannot be the long-term goal of any society.
2. Everything built should be given as long a life expectancy as possible.
3. Reuse and recycling of material should be maximized.
4. Non-recyclable materials should be not be used in buildings.
5. Anything that is built should be retained, sustained, and maintained.
Read the article by Wilfried Wang.