JH3 is a big fan of the 80/20 principle:
The 80/20 rule provides the foundation for a relatively simple exercise for executives. It involves answering the following questions:
* Which 20% of the products or services generate 80% of the profitability?
* Which 20% of the customers generate 80% of the profitability?
* Which 20% of the geographies generate 80% of the profitability?
* Which 20% of the assets generate 80% of the profitability?
These are powerful and revealing questions, yet few companies today are able to answer these questions given the way their accounting and information systems are set up.
I wonder if the same approach could be applied to the Federal Budget. Obama, are you listening?
The pareto questions might look something like this:
– Which 20% of our costs take up 80% of the budget?
– Which 20% of our services impact 80% of the tax-paying public?
– Which 20% of our geographies require 80% of our aid?
– Which 20% of our public generate 80% of our tax revenues?
Betcha these could be eye-openers!
Accenture: How To Create A Culture Of High Performance
Accenture is advertising How To Create A Culture Of High Performance.
I agree with them that “the central attribute of a successful leader is the ability to change the way people think.”
But I completely disagree when they say that “Successful leaders get everyone to share the same mindsets.”
I think the opposite is true: successful leaders bring together diverse points of view to challenge each other and present different alternatives, thus helping the leader make informed, effective decisions.
What Accenture is calling “mindsets” is really groupthink. Groupthink is a recipe for disaster, not high performance.
In the course of a two-year investigation, Accenture determined five “mindsets” which matter most in improving business performance:
Mindset 1: Maintain the Right Balance Between Market-Making and Disciplined Execution by Avoiding False Trade-offs and Committing to a Dual Focus on Present and Future.
Mindset 2: Identify and Multiply Talent by Investing a Disproportionate Amount of Time in Recruiting and Developing People.
Mindset 3: Use A Selective Scorecard to Measure Business Performance By Relying on a Simple, Memorable Way of Measuring Success and Using Every Occasion to Share Success Stories Throughout the Organization.
Mindset 4: Recognize Technology as a Strategic Asset by Investing in Technologies that Demonstrably Lead to Better Business Performance.
Mindset 5: Emphasize Continuous Renewal by Ensuring the Organization Understands What to Preserve and What to Jettison.
Seth Godin teaches the New York Times How to Compete
In my line work (consulting) I run into all kinds of executive mindsets. In the publishing world, however, these mindsets tend to be rather stodgy at best, reptilian at worst.
Publishers don’t understand the web. And Seth Godin takes the New York Times to task, pointing out so many obvious misses and near-misses, that you have to ask why. Why don’t publishers get it? Why do they insist on playing it safe, even as their ship sinks below them?
Godin’s answer is right on target: “organizations are run by people who want to protect the old business, not develop the new one.”
This is what VG talks about as well.
In just about any large company, the people running the show are great at yesterday’s business, not tomorrow’s.
Please read Godin’s post >>
More Obama Lessons for Business
Bill George (yes, Medtronic’s Bill George) gives us a few more lessons learned from the Obama victory:
• Obama created a grassroots movement by building an ever-expanding organization of empowered leaders, who in turn engaged people from their social networks like Facebook.
• The entire organization was aligned around a single goal—electing Obama as President—and operated with common values (“Offer messages of hope, don’t denigrate our opponents, refuse to make deals”).
• Campaign leaders subordinated their egos and personal ambitions to the greater goal. Those who deviated quickly exited.
• Obama set a clear, consistent tone from the top (“No Drama Obama”), and never wavered, even when things weren’t going well.
• Obama’s greater mission transcended internal goals, such as fund-raising, endorsements, and campaign events, but each of these areas had goals tied to the greater mission.
• The campaign team used the most modern Internet tools to communicate, motivate, and inspire people and to guide their actions. Each day, 5 million people received personal messages from campaign headquarters or even Obama himself. This organization collaborated across a wide range of geographies and campaign functions, all tightly integrated nationally and executed locally.
Finally, just in case you missed the other business lessons, here you go >>
Shoshana Zuboff: Obama’s Victory is Capitalism 2.0
Writes Zuboff in BusinessWeek:
“This column is dedicated to the top managers of American business whose policies and practices helped ensure Barack Obama’s victory. The mandate for change that sounded across this country is not limited to our new President and Congress. That bell also tolls for you. Obama’s triumph was ignited in part by your failure to understand and respect your own consumers, customers, employees, and end users. The despair that fueled America’s yearning for change and hope grew to maturity in your garden.”
Years ago I remember reading Zuboff’s In the Age of the Smart Machine and thinking that no one in corporate management really wants real transparency… and that the information value-chain she described was doomed to failure.
Luckily, I was wrong. Now Obama will bring process transparency to government and business.
Asks Zuboff:
“…can we invent a business model in which advocacy, support, authenticity, trust, relationship, and profit are linked?”
“Yes, we must,” she concludes.
Read the article >>
And read her book: The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism
>>
Tom Friedman: “Steve Jobs – want to run G.M. for a year?”
Tom Friedman made me laugh today:
“…somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.”
The rest of his column is a bit more serious. But it’s dead on!
Business Lessons Learned from President-Elect Barack Obama
What should the new President’s priorities be? Here are some views from a few CEOs interviewed by BusinessWeek:
It’s a cliche, but big business fears Democratic leaders. Turns out that Democratic presidents are better for the economy than Republicans! Details, details…
Jack Welch has his own take on why Obama succeeded: a clear vision, clean execution, and friends in high places.
A far more insightful piece comes from HBR blogger Umair Haque: Obama’s Seven Lessons for Radical Innovators. I don’t agree with all of his points (Obama did not “minimize strategy,” he minimized tactics!) but I do commend Haque for his insights (see this post, for example, on why Obama is the Google of Politics.)
Bill Taylor has a fun post titled: How Obama Became CEO of the USA — and What It Means for CEOs Everywhere
in which he argues that “being different makes all the difference.”
John Quelch says it’s all about better marketing.
Barbara Kellerman argues that Obama is a superior manager.
Gill Corkindale calls Obama The World’s First 21st Century Leader
For Stew Friedman, it’s authenticity.
My own view is that Obama is a true leader. And what we witnessed was the birth of Politics 2.0.
And in the end, it’s still about results, and to that end, Obama has already taken the first step.
Go Barack!
Obama’s Innovation Strategy
So what will Obama’s innovation strategy look like? Here’s a clue or two:
Victory: Steel Pulse: Go Barack
I finally got some sleep. The world has changed.
What a beautiful thing it is:
Steel Pulse teaches us the meaning of product versioning. See previous version here >>
Video: “Vote Barack Obama” by Steel Pulse
We need a leader, a leader
To march on to Liberty
Get it Together
Vote Barack, Barack Obama…
MP3 here >>
Scott Anthony: How to be a Disruptive Innovator
Invest a little, learn a lot.
Henry Mintzberg: Leadership Beyond the Bush MBA
I’ve always enjoyed his work >>
See also: “How Productivity Killed American Enterprise”
India Joins the Asian Space Race
I’m happy to see the Indians go for the moon, joining their Chinese and Japanese counterparts as they jockey for prestige and bragging rights.
Is it science or technonationalism? Both of the above, but somehow the politics outweighs the science.
Now let’s all compete (or collaborate) to build green energy power generation projects!
Recession as Opportunity
The nerds at Bain give us a few reminders from history:
– Southwest Airlines surged ahead during the 2001 recession
– Intel pulled away from AMD (also in 2001)
– Johnson & Johnson, GE and IBM shifted focus on economically healthier regions in Q2/2008
– Bank of America gobbled up Merrill Lynch (the opportunity of a lifetime) – just a few days ago
So, where are your opportunities?
Shaping Strategy in a World of Constant Disruption: How to Manage Your Business Ecosystem
In this month’s Harvard Business Review, authors John Hagel III, John Seely Brown and Lang Davison provide a road map for the daunting task of shaping strategy as technology-driven infrastructures constantly change.
The article is called: “Shaping Strategy in a World of Constant Disruption” and you can download it here (thanks Deloitte Consulting!) >>
In my view this is a very timely piece of thinking from my heroes JH3 and JSB (and Lang Davison). I’ll dig into it later this month on ecosystemwatch.com…
Wait, there’s more. Check out the podcast >>
Online Selling: Procter & Gamble Goes Direct to Fight Private Labels?
Don’t look now, but P&G is trying some direct selling online.
From the Financial Times:
Procter & Gamble is testing its ability to use the internet to sell its toothpaste, household cleaners and nappies directly to US households, in a potential long-term strategic challenge to its retail partners.
…The move brings P&G into direct brand competition with its retailers, underlining the extent to which e-commerce is contributing to changes in the way the two sides have traditionally worked with each other.
OK. The site is called theEssentials.com, but so far it looks like they have very little traffic.
Is this how they intend to fight the private label war? I’ll talk about them later this month on ecosystemwatch.com
What Would Peter Drucker Do?
Looks like Rupert Murdoch’s WSJ is thinking along the same lines we are (for a few seconds at least).
They’ve gone an dug up an old article Peter Drucker wrote for them: Planning for Uncertainty.
Here are some of the key questions:
– …traditional planning asks, “What is most likely to happen?” Planning for uncertainty asks, instead, “What has already happened that will create the future?”
– “What do these accomplished facts mean for our business? What opportunities do they create? What threats? What changes do they demand — in the way the business is organized and run, in our goals, in our products, in our services, in our policies? And what changes do they make possible and likely to be advantageous?”
– “What changes in industry and market structure, in basic values (e.g., the emphasis on the environment), and in science and technology have already occurred but have yet to have full impact?”
– “What are the trends in economic and societal structure? And how do they affect our business?”
– “What is this company good at? What does it do well? What strengths, in other words, give it a competitive edge? Applied to what?”
He ends with a serious warning for the bean-counters:
There is, however, one condition: that the business create the resources of knowledge and of people to respond when opportunity knocks. This means developing a separate futures budget.
The 10% or 12% of annual expenditures needed to create and maintain the resources for the future — in research and technology, in market standing and service, in people and their development — must be put into a constant budget maintained in good years and bad. These are investments, even though accountants and tax collectors consider them operating expenses. They enable a business to make its future — and that, in the last analysis, is what planning for uncertainty means.
And don’t forget his advice for retail strategy >>
Retail Strategy in a Downturn: Pay Your Vendors Fast (like T.J. Maxx)
In BusinessWeek:
Industry observers say that while those retailers can take 60 to 90 days or more to settle up, TJX typically pays within 30. These days, that’s a critical selling point both to vendors, who are more concerned about finding funds to buy raw materials and pay expenses, and to the financers who act as middlemen in many of the deals. It could give TJX—which also owns discounters Marshalls and HomeGoods—an added advantage in getting a wider selection of items.
Makes sense. Can’t sell something that’s not on the shelf, Drucker used to say…
Read the article here>>
There’s another very good reason to pay quickly: goodwill.
Your suppliers will take an extra step or two for you if they know they can count on you. This “trust” makes a giant difference in execution.
There’s a software company I know which used to delay its vendor payments as much as possible as part of its strategy. While it may have gained a few bucks in capital, it lost in terms of responsiveness. Big time. Vendors would move extremely slowly to deliver value. It was frustrating on both sides. And all because a few “brilliant” bean-counters thought they had found a way to squeeze a few more pennies into the corporate treasury.
God is in the Process: The Legacy of Michael Hammer
I have to say I was shocked when I saw the news about Michael Hammer. He was just sixty. Goes to show you how precious every second is. It may be that they need to do some process re-engineering up in heaven. Maybe make it more customer friendly or something…
Down here on Earth, process re-engineering isn’t as fashionable as it used to be. And I wonder how many people got laid off because of Reengineering the Corporation: A Manifesto for Business Revolution (Collins Business Essentials)
But Hammer was misunderstood. His ideas were abused by company executives and the management consulting industry. Today his ideas live on in the heads of IT nerds and companies like Zara.
Where do you (and your company) stand? Check out the maturity models he created:
1) for process maturity, and 2) for enterprise maturity.
Too bad we didn’t see the one on leadership maturity.
Here are some fun links:
– Put Processes First: Make High Performance Possible Michael Hammer
– Michael Hammer: A Tribute to the Guru of Operations Anand Raman
– Remembering Michael Hammer Tom Davenport
In the end, process matters. Even our buddy Drucker acknowledged that.
BTW, the other process guru who is still (very) alive and kicking isTom Davenport.
Retail Strategy: Tips from Peter Drucker
One of the great things about the late Peter Drucker is that he can be summoned to solve just about any problem.
One of my clients is a web retailer. They’re having serious issues with “customer hesitancy.”
And of course the headlines are now full of bad news in retail.
So we had a long chat about customer hesitancy. What makes the customer hesitant? Is it really the news on TV? Is it the fact that they might be out of a job?
My first piece of advice to them was straight out of Drucker: Stop selling and start buying for the customer.
Are you buying for the customer? Really?
That line of reasoning led to these predictable questions: so exactly who is your customer? Are there segments you aren’t serving that you should? Are there segments you should stop wasting your time with?
We were able to go and look at their historic web-sales data (for the past two years down to the last two weeks) to find out who their customers really were. And surprise, there was no customer hesitancy there!
All they needed was to focus on the right segment. We changed the website to do just that.
Listen to good old (in this case a younger, “1.0 version”) Drucker:
Robert Schiller’s Subprime Solution
The irrationally exuberant Robert Schiller is back with a book called The Subprime Solution
Don’t have time for the book? Read the summary >>
What Works in a Downturn: Purpose-Branding or Cause-Marketing
Despite the downturn, there is evidence that consumers are interested in “purpose branding.”
That’s the spin from Procter & Gamble’s Jim Stengel who (surprise, surprise) is leaving P&G at the end of the month to join a “purpose branding” consultancy.
Back-up data: In a study released this month, 26% of consumers expect companies to give more support to causes and nonprofits in an economic downturn, while 52% expect companies to maintain existing programs. Another 79% of consumers said if price and quality were similar, they would switch to a brand associated with a good cause.
OK, I’ll buy it.
And if your company is looking to do some cause-related branding, here’s a cool green company you should team up with: The Solar Electric Light Fund >>
Downturn 2008: Harvard Business Review’s Survival Guide
And now, a survival guide from HBR.
My favorite entries:
– Why Entrepreneurs Love a Downturn
– How to Market in a Recession
– Staying Green in a Tough Economic Climate
– Three Steps to Innovating in Struggling Industries
– America’s Addiction and the New Economics of Strategy
– Beyond the Banking Crisis: A Strategy Crisis
– Hard Times Demand Teamwork — Not an MVP
Non sequitur: What is the difference between Palin and a Muslim fundamentalist? Lipstick.
Friedman versus Senge: The Race for the Green Business Bestseller
My opinion: Tom Friedman will win the bestseller race easily, but Peter Senge‘s book is more important. The good news? They’re both serious about business and sustainability.
Here’s Senge:
And here’s his book: The Necessary Revolution: How Individuals And Organizations Are Working Together to Create a Sustainable World
Check out this interview with Senge>>
And this download>>
And here’s Friedman’s book pitch:
His book: Hot, Flat, and Crowded: Why We Need a Green Revolution–and How It Can Renew America
His website>>
And finally, a little column from Friedman>>
Exxon, your days are numbered.
Slacker Uprising: Michael Moore’s Digital Distribution Model
Coming soon at www.slackeruprising.com>>
Note: The download is only available to those residing in the United States and Canada. In order to receive the free download on September 23rd, you must confirm that you are a resident of the United States or Canada.
Will this change the movie business? Or better, will it change our government?
Leadership Assessment: What John McCain can learn from GE
Does anyone believe that a Fortune 500 company would pick Sarah Palin as their CEO?
When Jack Welch transformed GE, he introduced several new criteria for evaluating executive leadership and performance. His successor, Jeffrey Immelt went through an exhaustive succession planning (er, vetting) process to replace him.
Here’s a look at GE’s leadership assessment matrix. The key attributes are:
– Vision
– Customer / Quality Focus
– Integrity
– Accountability / Commitment
– Communication / Influence
– Shared Ownership / Boundaryless
– Team Builder / Empowerment
– Knowledge / Expertise / Intellect
– Initiative / Speed
– Global Mind-set
Not bad. Does your company look at leadership this way?
Here are the details:
Vision
– Has developed and communicated a clear, simple, customer-focused Vision / direction for the organization.
– Forward-thinking, stretches horizons, challenges imaginations.
– Inspires and energizes others to commit to Vision. Captures minds. Leads by example.
– As appropriate, updates Vision to reflect constant and accelerating change impacting the business.
Customer / Quality Focus
– Listens to customer and assigns the highest priority to customer satisfaction, including internal customers.
– Inspires and demonstrates a passion for excellence in every aspect of work.
– Strives to fulfill commitment to Quality in total product / service offering.
– Lives Customer Service and creates service mind-set throughout organization.
Integrity
– Maintains unequivocal commitment to honesty / truth in every facet of behavior.
– Follows through on commitments; assumes responsibility for own mistakes.
– Practices absolute conformance with company policies embodying GEI&PS commitment to ethical conduct.
– Actions and behaviors are consistent with words. Absolutely trusted by others.
Accountability / Commitment
– Sets and meets aggressive commitments to achieve business objectives.
– Demonstrates courage / self-confidence to stand up for the beliefs, ideas, – Fair and compassionate yet willing to make difficult decisions.
– Demonstrates uncompromising responsibility for preventing harm to the environment
Communication / Influence
– Communicates in open, candid, clear, complete, and consistent manner – invites response / dissent.
– Listens effectively and probes for new ideas.
– Uses facts and rational arguments to influence and persuade.
– Breaks down barriers and develops influential relationships across teams, functions, and layers.
Shared Ownership / Boundaryless
– Self-confidence to share information across traditional boundaries and be open to new ideas.
– Encourages / promotes shared ownership for Team Vision and goals.
– Trusts others; encourages risk taking and boundaryless behavior.
– Champions Work-Out as a vehicle for everyone to be heard. Open to ideas from anywhere.
Team Builder / Empowerment
– Selects talented people; provides coaching and feedback to develop team members to fullest potential.
– Delegates whole task; empowers team to maximize effectiveness. Is personally a Team Player.
– Recognizes and rewards achievement. Creates positive / enjoyable work environment.
– Fully utilizes diversity of team members (cultural, race, gender) to achieve business success.
Knowledge / Expertise / Intellect
– Possesses and readily shares functional / technical knowledge and expertise. Constant interest in learning.
– Demonstrates broad business knowledge / perspective with cross-functional / multicultural awareness.
– Makes good decisions with limited data. Applies intellect to the fullest.
– Quickly sorts relevant from irrelevant information, grasp essentials of complex issues and initiates action.
Initiative / Speed
– Creates real and positive change. Sees change as an Opportunity.
– Anticipates problems and initiates new and better ways of doing things.
– Hates / avoids / eliminates “bureaucracy” and strives for brevity, simplicity, clarity.
– Understands and uses speed as a competitive advantage.
Global Mind-set
– Demonstrates global awareness / sensitivity and is comfortable building diverse / global teams.
– Values and promotes full utilization of global and work force diversity.
– Considers the global consequences of every decision. Proactively seeks global knowledge.
– Treats everyone with dignity, trust, and respect.
So, how do you measure up?
To me this is another dimension on the Ram Charan / Ben Franklin leadership model I blogged about a while back.
And now, sit back and listen carefully:
The U.S. Army backs ‘Synthetic Telepathy’ research
VIDEO: The Curious Connection Between Juvenile Delinquency and Entrepreneurship – Steven Berglas and Marshall Goldsmith on Being Entrepreneurial in Hard Times
How to Innovate while You Sleep
Your mind is active when you sleep. Mine, I’m not so sure…
Seriously though:
1. State your problem
2. Go to sleep
3. Problem solved!
Details >>
Losing the Talent War: Immigration Policy and The Reverse Brain Drain
As a kid in India, the phrase “brain drain” meant someone smart just left India to work in the US.
Now it looks like the tables have turned:
“…more than 1 million highly skilled professionals such as engineers, scientists, doctors, researchers, and their families are in line for a yearly allotment of only around 120,000 permanent-resident visas for employment-based principals and their families in the three main employment visa categories (EB-1, EB-2, and EB-3). These individuals entered the country legally to study or to work. They contributed to U.S. economic growth and global competitiveness. Now we’ve set the stage for them to return to countries such as India and China, where the economies are booming and their skills are in great demand. U.S. businesses large and small stand to lose critical talent, and workers who have gained valuable experience and knowledge of American industry may become potential competitors.”
Ouch.
Skilled immigrants create jobs:
“…more than half of the engineering and technology companies started in Silicon Valley and a quarter of those started nationwide from 1995 to 2006 had immigrant founders. These companies employed 450,000 workers and generated $52 billion in revenue in 2006.”
We need a new policy on skilled immigration, Obama.
More info: an editorial by Alan Webber on the same topic>>
Nurturing Your Business Ecosystem: Lessons Learned from SAP
JH3 and JSB have written an insightful piece for BusinessWeek titled: How SAP Seeds Innovation: SAP’s collaborative Web sites and discussion forums give its customers ways to learn from SAP business partners as well as from each other.
So why does SAP succeed where others fail?
According to Hagel:
1) SAP generated its ecosystem, which consists of customers, business partners, experts and independent parties by addressing the needs of the participants
and
2) it focused on the needs of individuals, not just companies.
There you have it: people first.
Read the entire article >>
Can the U.S. Learn from Indian R&D?
Duke’s Vivek Wadhwa writes in BusinessWeek:
“…India is rapidly becoming a global R&D hub in several industries. Its scientists are doing sophisticated drug discovery for Big Pharma (BusinessWeek.com, 6/10/08). Its engineers are designing key components of jetliners for Boeing (BA) and Airbus; developing next-generation networking equipment for companies like Cisco Systems (CSCO); and building auto bodies, dashboards, and power trains for such vehicle manufacturers as General Motors (GM). Indian companies are also innovating for the Indian marketplace; witness the $2,500 car by Tata Motors (TTM).”
So how are they doing it?
Hint: it’s all about developing your company’s most valuable asset.
Watching Ecosystems: a blog about marketspace analytics
Announcing our new blog at www.ecosystemwatch.com >>
The idea is fairly simple: If you don’t understand the ecosystem you’re competing in, you can’t compete effectively…
The blog will cover the following topics:
– Blogosphere
– Branding Ecosystems
– Business Ecosystems
– Business Models
– Case Studies
– Disruption
– Ecosystem Maps
– Industry Ecosystems
– Influencers
– Innovation Ecosystems
– Political Ecosystems
– Product Ecosystems
– Social Networking
– Strategy
– Value-Networks
This is a natural offshoot of our Ecosystem Intelligence™ service; take a look…
How to Measure Innovation
In some companies, you’ll hear senior executives spout this tired mantra: “Innovation is everyone’s job.” When that happens, head for the exit.
Now, the British are going to tell us how to measure innovation. The National Endowment for Science, Technology & the Arts (NESTA), a nonprofit organization that promotes innovation, wants to create a new index, one that will be industry-specific… blah, blah, blah.
I agree with their premise that traditional methods of measuring innovation, such as the amount of money thrown at R&D, don’t tell the entire story.
But their idea of implementing an industry-based “peer review in which company executives both help to define the innovation indicators and rate each other” is a joke.
Let’s see. Let’s ask the CEOs of Exxon, Chevron, Shell ,and BP to rate their industry on innovative approaches to solving the energy problem. Not funny, is it?
Clayton Christensen says the same thing in this article about creating new value networks.
So what should we measure? How about looking at results?
Can we identify disruptive entrants in an existing industry ecosystem? (Shameless plug: yes, we can – with Ecosystem IQ)
Hey, at least the British are trying. Better than our lame Department of Commerce.
BTW, BusinessWeek does have a Global Innovation Index worth looking at, but again, they’re looking at the establishment, the industry giants that are investing in innovation.
What I want to see is the game-changers. Where’s the next successful car company coming from? Is it Tata or Tesla?
We Can Solve It: Al Gore’s throws down the challenge of our time
Bill Gates and Philanthropy 2.0: shouting for the voiceless
Bill Gates’ greatest achievements lie ahead of him. And this time, he really is going to change the world.
Why? Because he understands that there are some things that just can’t be done by business or the marketplace.
His words:
95 percent — actually, 98 percent — of all medical research is done for rich people. It’s done for baldness, erectile dysfunction, cosmetic surgery. That’s where 98 percent of the researchers are working. …
So the voices of the poor are never heard in this marketplace system. That is, the needs of the poorest, they don’t speak in that prioritization, because they’re not paying for medicines. They can’t.
So today’s prioritization is totally for the richest, for the things that they speak by buying those various medicines for. And so as we take our money, which in total is, compared to the overall market, fairly small, and cause some shift in the favor of malaria, AIDS, tuberculosis, to the degree there’s a finite number of scientists in the world, then you could say, OK, there’s a little bit less on baldness.
Because our money is incremental, ideally you’d be growing the pool of scientists, because you have more money, more jobs, more opportunity there. But it is true that the needs of the very richest might get a tiny bit less attention as we cure tuberculosis.
It’s refreshing to hear this from a leader of Gates’ caliber.
Another point of note: Gates doesn’t want incremental innovation and since he knows the current model of medical research isn’t working, he’s ready to change it.
There’s a lot more on this new version of Gates here, here, and here. What I like about it is the fact that Buffet is on board with him, and that between the two of them, they’re going to redefine the meaning of philanthropy.
The Gates Foundation is focused, and rightly so, on health and development.
But there’s just one thing they’ve forgotten: energy.
As Bob Freling says, “Energy is a human right.” The point Freling makes every day is absolutely critical and one Gates needs to understand: “You can’t have X-rays, or crop irrigation, or vaccines, without electricity. And in places like Africa, the only effective way to get that electricity – when you’re off the grid – is solar power.” So the Gates Foundation is going to have to look at energy as well. And the sooner they do, the faster they’ll get there with their other objectives – food security, health care for the poorest of the poor, etc.
I can’t wait to see more billionaires get on the Philanthropy 2.0 bandwagon. What are you waiting for Larry Ellison? And how ’bout getting A.G. Lafley and the P&G open innovation nerds on board as well. Let’s cure malaria instead of whitening teeth. eh?
Go, Bill, Go.
Video: Gerald Zaltman on Marketing Metaphors
Active Inertia: Why Good Companies Go Bad
The Economist has just begun a series on “big ideas” in management thinking. These may be the buzzwords of the past, but many of them are worth understanding.
Active Inertia. That’s how successful companies (and governments) lose their way. Here’s how Don Sull explains his idea:
My research suggests that companies fall prey to active inertia—responding to even the most disruptive market shifts by accelerating activities that succeeded in the past. When the world changes, organizations trapped in active inertia do more of the same. A little faster perhaps or tweaked at the margin, but basically the same old same old. Managers often equate inertia with inaction, like the tendency of a billiard ball at rest to remain immobile. But executives in failing companies unleash a flurry of initiatives—indeed they typically work more frenetically than their counterparts at competitors which adapt more effectively. Organizations trapped in active inertia resemble a car with its back wheels stuck in a rut. Managers step on the gas. Rather than escape the rut, they only dig themselves in deeper.
What Sull says is that we get trapped in our assumptions in the following areas:
Strategic frames: What we see when we look at the world, including definition of industry, relevant competitors and how to create value.
Processes: How we do things around here entailing both informal and formal routines.
Resources: Tangible and intangible assets that we control which help us compete, such as brand, technology, real estate, expertise, etc.
Relationships: Established links with external stakeholders including investors, technology partners or distributors
Values: Beliefs that inspire, unify and identify us.
So we just dig a deeper hole.
How do we get out of the mess? It starts with a sense of urgency.
By the way, this idea of active inertia applies at the individual level as well. How many of us go through life doing the same thing over and over?
How to Innovate like Google: Tom Davenport and Marissa Mayer
Two perspectives – one for Tom Davenport:
and the other from Google’s Marissa Mayer:
The “open-culture” thing is key. I wrote about this a while back in a not-so-subtle entry titled: “Google’s Product Development & Management Process Revealed” .