According to the NYTimes:
“In the last six months, major media companies have received much attention for starting to move their own programming online, whether downloads for video iPods or streaming programs that can be watched over high-speed Internet connections.
“Perhaps more interesting — and, arguably, more important — are the thousands of producers whose programming would never make it into prime time but who have very dedicated small audiences. It’s a phenomenon that could be called slivercasting.”
The web has always been a narrowcasting medium.
More from the article:
Discovery Communications, which has been a master of the current system, creating 15 different cable channels including Animal Planet and Discovery Health, is now exploring even more specialized services over the Internet. One will be introduced tomorrow for $9.95 a month. It will offer 30,000 video clips excerpted from its library of documentaries and other educational programs to help grade school and high school students with their homework. In the future, other services will offer content focused on narrow topics in travel, science and health.
Discovery, Mr. Hendricks says, is in a good position to create such services because of its large archive. “We have a wealth of programming just related to cancer, just related to Alaska and so on,” he said.
In addition to offering Internet distribution, Discovery will start to broadcast some of these programs late at night on its regular channels and encourage people to record them, he said.
To be sure, there are doubters. “I’ve never been a believer that we should create channels for all these niches like beach volleyball,” said John Skipper, a senior vice president of ESPN, a unit of the Walt Disney Company. “They just don’t pencil out. Because if you have 12,000 people, you can’t afford to do it. And if you can’t afford to do it, you can’t make any money on it.”
One reason that ESPN has shied away from this sort of niche programming, he said, is that its brand stands for a level of high-quality visual production that would be difficult for small channels to afford. Indeed, ESPN has been investing millions of dollars to produce programs in high-definition formats.
But reticence by some big media companies is making room for independent programmers to explore all sorts of niches.
Hmmm. ESPN doesn’t get it… perhaps Steve Jobs will wake them up.
Here’s the article in full>>
Carr’s Sixth Force: Public Interest (Are you listening, Wal-Mart?)
Since we’ve been talking about Wal-Mart this week, I figured we should look at the big picture. Nicholas Carr’s article on the 6th force (take that, Michael Porter!) is a good start:
“What’s the greatest strategic challenge facing Wal-Mart today? It’s not competition from other retailers. Although the world’s biggest merchant certainly keeps a close eye on rivals like Target and Best Buy, its domination of the industry seems secure for the time being. It’s not pressure from suppliers. Wal-Mart has most makers of consumer packaged goods at its beck and call. And it isn’t the whims of buyers. Shoppers show little desire to abandon their favorite store and its dirt-cheap prices.
No, Wal-Mart’s biggest worry today is the public interest.”
Great insight:
“As the experiences of Wal-Mart and other companies reveal, this traditional approach ignores the changing nature of the public interest and its expanding influence over companies’ financial results. The public does not want a company’s charity. It wants a chunk of its profits. The public interest, in other words, now expresses itself as an economic interest — the public has become an active competitor in the struggle to seize the bounties of the marketplace. As a result, the way businesses think about strategy needs to change. If a company clings to the old assumptions, it may be putting its future at risk.”
I don’t think the public wants “a chunk of its profits” tho; I think the public wants businesses to be fair- fair to the community and country it is in. Think economic justice. Not just social justice.
Read Carr’s essay >>
PS – Does your company have an active ecoimagination?
Nicholas Carr: The Editor beats the Wisdom of the Crowd
Nicholas “IT Doesn’t Matter” Carr talks about human editors versus algorithms in his post, “The editor and the crowd“:
“As the comparison of Memeorandum and Slashdot shows, the software-mediated crowd is a poor replacement for a living, breathing, thinking editor. But there are other things that the crowd is quite good at. The crowd tends, for instance, to be much better than any of its members at predicting an uncertain future result that is influenced by many variables. That’s why stock market indexes beat individual money managers over the long run. It’s easy to understand why. First, there are limits to the ability of any single individual to understand the complexities in how a large number of variables change and influence one another over time. Second, every individual’s thinking is subject to idiosyncracies and biases – some conscious, some not. The crowd aggregates all individuals’ knowledge about variables while balancing out their personal biases and idiosyncracies. It’s not the “wisdom” of crowds that makes crowds useful, in other words; it’s their fundamental mindlessness. What crowds are good for is producing average results that are not subject to the biases and other quirks of human minds.”
and
“That’s also why search engines work pretty well with algorithms (until, at least, they begin to be gamed by individuals using their minds): They produce the result that best suits what the average searcher is looking for. You don’t want generally used search engines to reflect individual biases. Indeed, one of their main jobs is to filter out those biases – and revert to the average.”
But, says Carr:
“But that’s also why algorithms don’t work very well as editors. With an editor, you don’t want mindlessness; you want mindfulness. A good editor combines an understanding of what the audience wants with a healthy respect for the idiosyncracies of his own mind and the minds of others. A good editor doesn’t aim to provide a bland “average result”; he wants to wander widely around the average, at times even to strike out in the opposite direction altogether. The mindless crowd filters out personality along with idiosyncracy and bias. The mindful editor is all about personality.”
I couldn’t agree with Carr more. And that’s why one of my latest projects is 100% human powered; powered by personality. I could have used software and algorithms to do the heavy lifting, but decided in favor of people. Thanks Nick!
The Innovation Mindset: A Checklist
David Maister asks:
How well does your firm stack up against these behaviors and states of mind?
– New challenges are eagerly, continuously sought out.
– The firm and its people never rely on momentum for their success, but are always seeking to build new capabilities.
– Compared to key competitors, the people in the firm are distinguished by a superior, burning passion to get somewhere new.
– The firm emphasizes and requires adaptability, flexibility, and responsiveness as key virtues.
– The firm’s strategies are created through continued and repeated experimentation.
– The firm is markedly superior in creating (not just hiring for) energy, excitement, enthusiasm, drive, determination, passion, and ambition.
– Service offerings, locations, and operating units are repeatedly assessed against the three key criteria: Do the people in the firm find this exciting? Are we making money? Are we doing something special that others are not doing?
– There is a restless refusal to accept “It’s OK.” People never settle, never give up, never coast.
– The firm sustains energy and investment actions both when things have gone badly and when things are going relatively well.
– The firm does not judge its performance by the levels of its accomplishments, but by the “relative incline”: whether or not it is improving relative to competitors on the characteristics it has chosen to compete on.
– Management is held accountable for its ability to create and sustain drive, enthusiasm, passion, ambition, commitment, and excitement, and instills these things in the individual members and groups that make up the organization. Managers who cannot do this are replaced.
Be honest! Read the entire article: “It’s Not How Good You Are, It’s How Much You Want It” >>
Chris Trimble: Building Innovation Ecosystems
The rate at which new ideas are generated is directly related to the effort invested in enriching social networks.
Says Chris Trimble in his Fast Company column:
“Entrepreneurs believe in the power of networking. Many are very good at it. They become good because they recognize that most people with interesting notions usually have only one piece of a puzzle. Often unexpected combinations of ideas, or chance meetings of people with complimentary perspectives, ignite genuine breakthroughs.
“Aspiring innovators from large companies are handicapped in the networking game — not because they lack skill, but because of the nature of their jobs. Once a business is proven and profitable, the name of the game is to make operations as efficient as possible. Employees at all levels are pulled into ever more specialized roles. Repeated tasks are joined together by rigorously documented processes. As a result, each manager’s web of connections increasingly mirrors the way today’s work is organized. Most connections are with managers with closely related specialties, who share similar perspectives, shaped by the demands of the same customers.”
There is one other point Chris – I call it the “closing of the corporate mind”. It’s not just about people being comforatble with the status quo. It’s about people hiring and surrounding themselves with their own kind. A tribal thing, perhaps? So the desis hang out with the desis, the Chinese with the Chinese, the Hicks with the Hicks, the golf-playing execs with other golf-playing execs, repugs with repugs, etc.
And as your colleague VG says, travel!
Trimble also mentions the “vast differences between communication networks and trust networks. Communication networks are the kind that are useful at the front-end of the innovation process because they enable the sharing of ideas. The back-end of the innovation process depends on trust networks, which require much heavier investments in time, energy, and goodwill.
Still boils down to people and trust, people! Put a value on that Mr. CFO Bean-Counter!
Building a Digital Business Platform
For over five years now I’ve been working on the problem of how companies can build a community for prospective customers. The question I asked myself was:
How can we get customers to collaborate with the company/companies to co-create products and services that benefit everyone involved?
I had some long discussions on this with John Hagel and the late John Rheinfrank. Here’s what we were thinking:
[click to enlarge]
Any suggestions?
Open Source Collaboration: The Flu Wiki
The purpose of the Flu Wiki is to help local communities prepare for and perhaps cope with a possible influenza pandemic. This is a task previously ceded to local, state and national governmental public health agencies. Our goal is to be:
– a reliable source of information, as neutral as possible, about important facts useful for a public health approach to pandemic influenza
– a venue for anticipating the vast range of problems that may arise if a pandemic does occur
– a venue for thinking about implementable solutions to foreseeable problems
This is how the Internet is democratizing society… collaborative problem-solving in public health. Public health is too important to leave to the bureaucrats… Remember Katrina?
See their avian influenza outbreak maps.
This level of detailed information is what we want from our public institutions, but you can bet we won’t get it- for several reasons- political, economic, and sadly, policy.
The Death of the Newspaper
Joseph Epstein in Commentary:
“To begin with familiar facts, statistics on readership have been pointing downward, significantly downward, for some time now. Four-fifths of Americans once read newspapers; today, apparently fewer than half do. Among adults, in the decade 1990-2000, daily readership fell from 52.6 percent to 37.5 percent. Among the young, things are much worse: in one study, only 19 percent of those between the ages of eighteen and thirty-four reported consulting a daily paper, and only 9 percent trusted the information purveyed there; a mere 8 percent found newspapers helpful, while 4 percent thought them entertaining.
“From 1999 to 2004, according to the Newspaper Association of America, general circulation dropped by another 1.3 million. Reflecting both that fact and the ferocious competition for classified ads from free online bulletin boards like craigslist.org, advertising revenue has been stagnant at best, while printing and productions costs have gone remorselessly upward. As a result, the New York Times Company has cut some 700 jobs from its various papers. The Baltimore Sun, owned by the Chicago Tribune, is closing down its five international bureaus. Second papers in many cities have locked their doors.
“This bleeding phenomenon is not restricted to the United States, and no bets should be placed on the likely success of steps taken by papers to stanch the flow. The Wall Street Journal, in an effort to save money on production costs, is trimming the width of its pages, from 15 to 12 inches. In England, the once venerable Guardian, in a mad scramble to retain its older readers and find younger ones, has radically redesigned itself by becoming smaller. London’s Independent has gone tabloid, and so has the once revered Times, its publisher preferring the euphemism “compact.”
I agree, in principle, with Epstein’s solution:
“My own preference would be for a few serious newspapers to take the high road: to smarten up instead of dumbing down, to honor the principles of integrity and impartiality in their coverage, and to become institutions that even those who disagreed with them would have to respect for the reasoned cogency of their editorial positions. I imagine such papers directed by editors who could choose for me—as neither the Internet nor I on my own can do—the serious issues, questions, and problems of the day and, with the aid of intelligence born of concern, give each the emphasis it deserves.
“In all likelihood a newspaper taking this route would go under; but at least it would do so in a cloud of glory, guns blazing. And at least its loss would be a genuine subtraction. About our newspapers as they now stand, little more can be said in their favor than that they do not require batteries to operate, you can swat flies with them, and they can still be used to wrap fish.”
Read the entire article here >>
Wal-Mart vs. Target vs Walgreens vs Costco
From a NYTimes article:
Though Wal-Mart is three times larger than its next biggest retail rival, Mr. Scott appears to be preoccupied with competitors whose individual store sales are growing faster than Wal-Mart’s — namely Target and Walgreens.
Asked about Wal-Mart’s stock price, which has fallen 11 percent in the last five years. Mr. Scott said: “You cannot have Target or Walgreens beating you day after day after day.” Mr. Scott wrote that one reason Wal-Mart’s same-store sales were growing more slowly than Target’s was that Wal-Mart’s customers earn less and have been squeezed worse by soaring fuel prices.
“Wal-Mart’s focus has been on lower income and lower-middle income consumers,” he wrote. “In the last four years or so, with the price of fuel being what it is, that customer has had the most difficult time. The upper-end customer got a tremendous number of tax breaks about four years ago. They have been doing very well in this economy.”
He said having to pay $50 to gas up a car did not change anything for rich customers, but did for those who didn’t earn a lot. “It changes whether or not you go to the movie, whether or not you buy new sheets, whether or not you go out to eat.”
At several points, Mr. Scott addressed criticisms that Wal-Mart health plan was too stingy toward its employees. He said that Wal-Mart’s health plan “stacks up very, very competitively” with other retailers. In a knock at companies that provide more generous benefits, Mr. Scott wrote: “One of the things said about General Motors now is that General Motors is no longer an automotive company. General Motors is a benefit company that sells cars to fund those benefits.”
OK. Let’s get this straight:
1) Wal-Mart is targeting lower income and lower-middle income consumers, i.e. its employees.
2) Wal-Mart won’t pay its employees a decent salary w/ benefits.
3) Wal-Mart says its same-store sales are growing more slowly than Target’s is because Wal-Mart’s customers earn less and have been squeezed worse by soaring fuel prices.
Sounds like one of those destructive cycles brought about by narrow-thinking from upper-management…
Let’s look at two other alternatives: Costco and IKEA.
Wake up Wal-Mart. Get some values.
What Global Warming?
The current wave of “warming” is the longest in 1,200 Years. According to the researchers:
“We found that between [A.D.] 890 and 1170, there was statistically significant widespread warmth corresponding approximately to the so-called Medieval Warm Period… However, the most widespread warmth was found not in the Middle Ages but during the 20th century.”
Here’s the article.
The researchers believe that “this latest paper might be the nail in the coffin for the small minority of very vocal climate change denialists who continue to challenge the conclusion that the recent warming of the Earth’s surface is out of the ordinary.”
Dream on, scientists. The people who deny global warming don’t believe in science. They believe in money. And the money says there is no global warming. They won’t believe it even if they see it… Right, Texxon?
Gary Hamel on Management Innovation
Gary Hamel’s back. This time he’s looking at “management innovation” in his latest HBR article titled – “The Why, What, and How of Management Innovation.”
A management innovation, says Gary Hamel, creates long-lasting advantage when it meets at least one of three conditions:
1. It is based on a novel principle that challenges the orthodoxy
2. it is systemic, involving a range of processes and methods
3. it is part of a program of invention, where progress compounds over time
Few companies have been able to come up with a formal process for fostering management innovation, says Hamel. The biggest challenge seems to be generating truly unique ideas. (No duh!)
Hamel gives us three examples of management innovation:
1. Harnessing employee intellect at Toyota.
2. Building a community at Whole Foods.
3. Growing great leaders at GE.
This time Hamel doesn’t mention Enron… (like he did in his first edition of Leading the Revolution) 🙂
So what is management innovation?
A management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organizational forms that significantly alters the way the work of management is performed. Put simply, management innovation changes how managers do what they do.
And what do managers do? According to Hamel, managerial work includes:
• Setting goals and laying out plans
• Motivating and aligning effort
• Coordinating and controlling activities
• Accumulating and allocating resources
• Acquiring and applying knowledge
• Building and nurturing relationships
• Identifying and developing talent
• Understanding and balancing the demands of outside constituencies
Says Hamel:
“In a big organization, the only way to change how managers work is to reinvent the processes that govern that work. Management processes such as strategic planning, capital budgeting, project management, hiring and promotion, employee assessment, executive development, internal communications, and knowledge management are the gears that turn management principles into everyday practices. They establish the recipes and rituals that govern the work of managers. While operational innovation focuses on a company’s business processes (procurement, logistics, customer support, and so on), management innovation targets a company’s management processes.”
And:
“A systematic process for producing bold management breakthroughs must include:
1. Commitment to a big management problem
2. Novel principles that illuminate new approaches
3. A deconstruction of management orthodoxies
4. Analogies from atypical organizations that redefine what’s possible”
Not too bad, eh? But how does one get managers to overcome their fear of failure? Most leaders in the Fortune 500 did not get to the oxygen-deprived board room on their talent for risk taking. I feel most got there for NOT taking risks, but rather for simply obeying orders and executing well on given tasks. Hamel does not address this problem, which I believe plagues all (ok, 99%) large companies.
While Hamel looks for management innovation, I’m still looking for innovative managers (now that’s an oxymoron).
Still, this is an article worth reading twice. And Hamel is back. I can’t wait to read the “forthcoming book.”
Almost forgot, Hamel also gives us a toolkit (a powerpoint slide set) you can download here >>
One last thing:
Hamel lists a dozen of the most noteworthy management innovations from 1900 to 2000.
1. Scientific management (time and motion studies)
2. Cost accounting and variance analysis
3. The commercial research laboratory (the industrialization of science)
4. ROI analysis and capital budgeting
5. Brand management
6. Large-scale project management
7. Divisionalization
8. Leadership development
9. Industry consortia (multicompany collaborative structures)
10. Radical decentralization (self-organization)
11. Formalized strategic analysis
12. Employee-driven problem solving
Adds Hamel:
“Losing out are Skunk Works, account management, business process reengineering, and employee stock ownership plans. There are more recent innovations that appear quite promising, such as knowledge management, open source development, and internal markets, but it’s too early to assess their lasting impact on the practice of management.”
Execution: Laurence Haughton on the Art of Follow-Through
Laurence Haughton speaks softly, but his message comes through loud and clear:
Fact 1: 1/2 of all a company’s strategies and initiatives will fail to make it from the drawing board to the front lines
Fact 2: Because 2/3 of all managers follow through using tactics prone to fail
Fact 3: And only 1 out of 10 companies have the tools to address this critical breakdown
A management consultant, lecturer, and business writer, Haughton’s latest book, It’s Not What You Say… It’s What You Do – How Following Through at Every Level Can Make or Break Your Company was published by Doubleday in 2005.
In 2001 Haughton co-authored It’s Not the Big that Eat the Small… It’s the FAST that Eat the Slow– a Wall Street Journal, USA Today, and New York Times bestseller that was translated for sale in 26 countries around the world.
Here’s the interview I’ve been promising to post on the site.
What made you write this book?
I wanted to know why half of all initiatives fail, and what leaders at every level can do about it. Of course, I had preconceived notions of what I thought the problems were, but was surprised to find that almost all of them were dead wrong…
Can you give us an example of that?
The biggest preconceived notion I had was that there wasn’t enough accountability in the world, and that why things didn’t get done. I used to think that people didn’t take completing their work seriously or their bosses didn’t make the consequences serious enough.
I have a very high degree of what psychologists would call conscientiousness, which can make me a real pain to be around. So that’s why I thought I got things done, and others didn’t.
So you’re the worrywart for everyone…
Also a nag. I used to look to blame people. I’ve visited companies that work that way, and I’m now convinced that’s dead wrong.
So the concept that all the world needs is accountability and more dire consequences, or the opposite view- a motivationalist view that all you need is more attaboys! Whichever side you want to be on, they’re both wrong.
The key is that you have to find the line between enough and too much accountability. The line is not that hard to find. I lay out a prescription in the book. But it depends on the type of project you’re working on. For example, is it more important that everyone communicates, coordinates and cooperates or is it more important that you know to last scintilla who it is that specifically dropped the ball that caused an interruption. Pinpoint accountability is totally unproductive in certain industries- the airline industry, for example. Research shows us that managers who take accountability too far, especially in businesses where follow through requires rapid responses to unpredictable changes, chip away at each individual’s willingness to look past personal interests and work with others to make sure what’s expected gets done.
In the book you’re saying that execution is critical. And yet you take Larry Bossidy to task.
It was Linda Lockwood at Charles Schwab who lifted the veil from my eyes about the Larry Bossidy’s memo in his book. She’s the one who said it was the “same old corporate gobbledygook.” Bossidy’s memo did not set clear expectations. And Linda wondered aloud: “How could managers tell when they had achieved Bossidy’s objectives?”
I can tell you that woke me up.
Then I started exploring the difficulty that people have when directions aren’t clear.
My book describes 4 building blocks that were developed after research showed us that 66% of managers use tactics that are prone to fail. And the tactics fall under the 4 building blocks I describe in my book. I use the 4 building blocks to make it plain, to explain step-by-step what to watch out for.
It’s so important that you have measurable objectives but even more important, you’ve got to have clarity. It was Einstein who said that if a scientific theory can’t be explained to a child it’s probably worthless.
Think of the stuff that you read – the obtuse language, the jargon – in the marketing world and HR world for example.
The team leader’s job is to make people understand, not confuse them. Not everyone has to be as smart as the leader as Linda pointed out, but everyone has to understand where we’re going as a team.
So let’s talk about the 4 building blocks…
The four building blocks are:
1. Having a clear direction so everyone knows exactly where they’re headed
2. Matching the right people to each goal
3. Getting the right level of buy-in (you have to outmaneuver the CAVE people)
4. Unlocking the individual initiative in every member of the team
Simple enough. But it’s far more complicated than you’d expect.
The first building block is clear direction that says that if you talk to people, more that half the time people can’t see a connection between what they’re doing and what the corporate objectives are. Why cant; they. It starts with the fact that as leaders, as managers we’re not clear. Sometimes we’re trained to say things in a vague and general way instead of doing what Douglas Smith says- make success measurable. Be specific, have some idea about how you measure the results you want and how the accountability gets divided in the team. To begin, just ask yourself- “is what I told them to do measurable, is it specific enough?”
In the book I describe the executive who is told by a 16 year old kid that “sometimes it seems like you’re writing to impress yourself.”
It’s our job to make sure that what we say makes sense and is understood at every level of the company- by both platinum level players and nickel level players, and everyone in between.
We all need to recognize that we have empathy inside us, and that we can up our ability to empathize. In the book I talk about reading between the lines. Take the world of the high-end restaurant business. A very competitive business, low barriers to entry… so how do you compete? How do you compete with people who are paid $12-15 dollars an hour?
In the book we tell readers about Richard Coraine of the Union Square Hospitality Group in Manhattan. They have created a process of “enlightened hospitality” which I describe as a real-time sixth-sense of their customer’s expectations, followed by an effort to exceed those expectations. Coraine tells us the story of how a reservations person noticed the guest whose valise had a broken grip (he held it under his arm so his client wouldn’t notice). While the guest entertained his client over lunch (at a quiet table selected by the host), the valise is sent around the block and the strap is reattached. When the guest comes to check out, the host hands him the bag by the grip to show him its fixed, without a word being exchanged. That’s “enlightened hospitality.”
The key is to “put yourself in someone’s shoes.” That’s what Coraine has created, a recipe for that includes smarts, heart, and courage. There’s another story he tells us in the book as well, but you’ll have to read it.
You mean the one about “chicken soup and crackers” after midnight?
(Laughs) Yes.
You mention how critical it is to make accurate assessments. How does that work?
Here’s something else that keeps coming up: “We tried that and it didn’t work, so we tried something else.”
How many times do executives try a change program and when it doesn’t work, they simply come up with another change initiative. This is a huge problem.
But some companies have the courage to stay the course. Take the case of SSM Health Care, another company I outline in the book. After 5 years of spending money and seminars and intense work on total quality management, a senior executive gets asked “Are we still doing CQI?” CQI was the continuous-quality-improvement initiative they had introduced five years earlier.
To their credit, they realized they had been “mucking around.” So they dug in. Something was missing. And it came out that the problem was that they were not making accurate assessments. They were trying to solve problems before they did a decent stab at the root-cause.
Ask “why” 5 times. The tendency is to try to fix something as soon as you see something wrong. Problem is people try to fix problems quickly, but they don’t fix the root cause. Why? Because they didn’t ask why enough.
The Five Whys is not new. It comes to us from Taiichi Ohno, the creator of the Toyota Production System. He believed that if managers wanted to start with a clear and accurate assessment of any problem, they had to ask why five times before trying to create a solution.
I also mention the case of Bill Zollars at Yellow Transportation– he wanted the company to start exceeding customer expectations by making sure their clients were very satisfied, not just satisfied, mind you, but very satisfied. He found out that the assessment his VP of Marketing had made of customer satisfaction was way, way off. And he found this out because he delved deeper. He checked the accuracy of their assessments.
Let’s talk about choosing the right people – the second building block…
Sure – I come from a background where you hire for experience. While researching this book, I found out that sometimes it’s more important to hire attitude over experience.
There’s another myth out there that says that anyone can accomplish anything if they just put their mind to it. There’s so much junk science out there that I had to really to clear the weeds, to find out what really works.
For example, research tells us those managers who make sure there’s the right fit between people and their goals before they take action double the likelihood of success.
There are people who are perfectly suited for the New York Yankees style of management. Others aren’t.
Sometimes the HR bureaucracy doesn’t give you the time. I talked to a manager who said they had 45 minutes to interview each candidate, which was simply not enough to get to know someone before hiring them.
HR sometimes is its own worst enemy.
Now at IKEA we have something different. Why? Because Pernille Spiers-Lopez, the president of IKEA North America. spent four years as manager of human resources for IKEA North America before being named president. She doesn’t have to put up with the nonsense. They’ve totally reinvented the HR function and it’s a beautiful thing to see. I did not talk about this in the book, but the IKEA hiring process gives them a competitive advantage.
[Note: Working Mother magazine named IKEA North America one of the 100 best companies for working mothers and singled out Spiers-Lopez for its Family Champion Award. The company provides benefits not widely offered retail workers in the U.S: full medical and dental insurance for those who work as little as 20 hours a week, including coverage for domestic partners and children; paid maternity leave; tuition assistance; a 401(k) matching plan and flexible work schedules. Spiers-Lopez was named president in 2001, when sales staff turnover was 76%. The next year these and other policies helped the company slash turnover to 56%.]
HR people are dying to get a seat at the strategy table. They have to be invited to the table because they bring something to the table. Traditional HR does not.
The key again is to connect personal goals to the goals of the organization. And sometimes that doesn’t just happen. As a leader, you have to make it happen. And if HR is going to be relevant, its got to become better at identifying and discovering talent.
And you’re only going to make that happen if you can outmaneuver the CAVE people.
Who are these CAVE people?
Anand Sharma at TBM Consulting Group gave me that acronym.
CAVE stands for Citizens Against Virtually Everything.
Just as our bodies have an immune system that assaults everything new and unfamiliar, organizations have their own auto-immune response that impulsively and instinctively attacks everything new or different- the CAVE people. They work overtly and covertly to undermine the change initiative your company is depending on. In the book I outline the strategy for outmaneuvering them, to give your change initiative a fighting chance of success.
Can you give us a hint how? How do you outmaneuver the CAVE people?
Anand Sharma was very kind to share these insights with our readers. I go into the details in the book, but essentially:
1. Kick off your change initiative with a “wow” event.
2. Blitzkrieg them (follow through so fast the CAVE people don’t have time to organize resistance)
3. Create disciples from the rank and file
4. Take your success story straight to the top
The bottom line is to execute, you simply have to get past the CAVE people.
Why are some people so motivated? And others so unmotivated? And why do incentive plans not work? That’s something I examine in the book as well.
This is all great, actionable knowledge for executives who want to get things done. We should let people buy the book to get the full story. Thanks for all your time.
Thank you.
A must read for everyone from the CEO on down…
Cartoon: The Day the Cows Turned Carnivorous
Trust: Mad Cows & Japan
I don’t blame the Japanese at all. At least they’re trying to protect their citizens. From Marketwatch:
“Japan said it will halt U.S. beef imports until Washington clarifies how the parts got into the shipment. Japan lifted a ban on U.S. beef just a month ago.
“U.S. agriculture authorities are investigating how a shipment of animal parts at risk for mad-cow disease wound up in Japan despite a pledge not to export those parts, the government said Friday.”
Here’s what shocked me in the article:
“The incident comes on the heels of a two-year ban on U.S. beef imports into Japan that Tokyo imposed after discovering a case of the disease in December 2003.”
Hello!
I gave up eating beef a few years ago; can’t say I miss it at all. Does anyone trust the government anymore?
Oh, mercy mercy me
Oh, things ain’t what they used to be
No, no
Where did all the blue sky go?
Poison is the wind that blows
From the north, east, south, and sea
Oh, mercy mercy me
Oh, things ain’t what they used to be
No, no
Oil wasted on the oceans and upon our seas
Fish full of mercury
Oh, mercy mercy me
Oh, things ain’t what they used to be
No, no
Radiation in the ground and in the sky
Animals and birds who live nearby are dying
Oh, mercy mercy me
Oh, things ain’t what they used to be
What about this overcrowded land?
How much more abuse from man can you stand?
My sweet Lord
My sweet Lord
My sweet Lord
Stupidity 101: Newspapers and Freebies
Asks the Economist:
“IN A letter about pay-rises to staff at the Sun last year, Britain’s biggest-selling newspaper, Rebekah Wade, its editor, remarked that in future the paper’s success would probably depend more on free CDs and DVDs than on its journalists. British newspapers are frenziedly giving things away, and in Germany, France, Italy, Poland and throughout Latin America papers are also increasingly relying on freebies to try to attract new readers. In Britain the circulation of national newspapers fell by 3% in 2005, following a 2% decline in 2004. The same pattern of falling circulation is being repeated across Europe and the United States. So are all the free gifts a sign of desperation from newspapers, or an entirely sensible new marketing strategy?”
My “hero” Rupert Murdoch, owner of the Sun and the Times, said last November that he dislikes it because “people grab the paper, tear the DVD off and throw away the paper”. He’s right.
This is the same kind of stupidity that software companies engage in when they give away free T-shirts. They don’t attract the target audience, but end up with droves of kids wearing “.NET” T-shirts. A friend of mine used to give away free T-shirts to the homeless, until his boss found out. Hurts the brand, you know.
Bet you 85% of the people grabbing the CDs and DVDs don’t read the paper at all.
This is what I call GM-style management.
Read all about it!
John Hagel: Consumer Electronics Show – in Shanghai?
“I expect that we may not see CES in Las Vegas that much longer. Any bets on when it will move to Shanghai?”
The global innovation landscape is changing. And Hagel’s got his finger on the pulse.
Underwhelming: McKinsey’s 2006 Predictions
The nerds at McKinsey are at it again with their sweeping generalities and “big-picture” historical perspectives.
The article – Ten trends to watch in 2006 – is rather underwhelming:
“Those who say that business success is all about execution are wrong. [what?!!] The right product markets, technology, and geography are critical components of long-term economic performance. Bad industries usually trump good management, however: in sectors such as banking, telecommunications, and technology, almost two-thirds of the organic growth of listed Western companies can be attributed to being in the right markets and geographies. Companies that ride the currents succeed; those that swim against them usually struggle. Identifying these currents and developing strategies to navigate them are vital to corporate success.
“What are the currents that will make the world of 2015 a very different place to do business from the world of today? Predicting short-term changes or shocks is often a fool’s errand. But forecasting long-term directional change is possible by identifying trends through an analysis of deep history rather than of the shallow past. Even the Internet took more than 30 years to become an overnight phenomenon.”
Here are the trends they’ve identified. Wow, I’m speechless.
Macroeconomic trends
1. Centers of economic activity will shift profoundly, not just globally, but also regionally.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly.
Social and environmental trends
4. Technological connectivity will transform the way people live and interact.
5. The battlefield for talent will shift.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.
Business and industry trends
8. New global industry structures are emerging.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.
Advice to CEOs – if this is the advice you’re paying McKinsey for, save your money! Just read your Economist and the Global Province every week and you’ll come out ahead!
Poor show, Mr. Davis. If you’re listening, Fred Gluck – it’s time to get back in and take names and kick some …
Clayton Christensen on How Apple can Mess Up
Here’s a great interview with Professor Christensen in BusinessWeek:
Apple is doing phenomenally well these days. It seems it’s doing a textbook job of maintaining huge market share in digital music players, long after most experts thought that share would erode. And it’s doing so with the same proprietary strategy that many thought would never stand up to an onslaught from the likes of Microsoft (MSFT), Wal-Mart (WMT), and Yahoo! (YHOO). Can Apple keep it up?
I don’t think so. Look at any industry — not just computers and MP3 players. You also see it in aircrafts and software, and medical devices, and over and over. During the early stages of an industry, when the functionality and reliability of a product isn’t yet adequate to meet customer’s needs, a proprietary solution is almost always the right solution — because it allows you to knit all the pieces together in an optimized way.
But once the technology matures and becomes good enough, industry standards emerge. That leads to the standardization of interfaces, which lets companies specialize on pieces of the overall system, and the product becomes modular. At that point, the competitive advantage of the early leader dissipates, and the ability to make money migrates to whoever controls the performance-defining subsystem.
In the modular PC world, that meant Microsoft and Intel (INTC), and the same thing will happen in the iPod world as well. Apple may think the proprietary iPod is their competitive advantage, but it’s temporary. In the future, what will matter will be the software inside that lets users find exactly the kind of music they want to listen to, when and where they want to, with minimal effort.
But Apple has that software. It can be the one to provide that to everyone else, if it chose to, right?
I’m concerned that they’ll miss it. It’s the fork in the road — and it’s comparable to the fork they faced when they chose not to open up the Mac in the 1980s, when they let Microsoft become Microsoft.
How long will Apple have to make this change?
I’d be very surprised if three years from now, the proprietary architecture is as dominant as it is now. Think about the PC. Apple dominated the market in 1983, but by 1987, the industry-standard companies, such as IBM (IBM) and Compaq, had begun to take over.
Christensen also says something interesting about hedge funds: don’t even think about them as shareholders!
Read the BW article >>
See also my post: Clayton Christensen: The Innovator’s Battle Plan and my interview with Clayton Christensen >>
Who Speaks for the Earth?
Time for a rant…
From the Guardian:
“It is on climate change that Labour has chalked up its worst record since it came to power. Tony Blair may have been good on the rhetoric in the run-up to the G8 last year (though his wobbles on Kyoto did huge damage) but the domestic front has been an abysmal failure of broken promises and backtracking. “Betrayal” doesn’t quite convey the intensity of the environmental movement’s shock at how, despite all the evidence of the urgency of tackling climate change piled up by scientists over 2005, the government has succeeded in doing very little other than reigniting an old (and many can reasonably argue, irrelevant) debate about the nuclear option.
“But the anger and frustration is only intensified by the fact that, frankly, outside a few well-informed environmental activists, nobody is much bothered. The environment was virtually invisible in the 2005 election. Even more galling, environmentalists saw the hundreds of thousands of development campaigners pouring on to the streets of Edinburgh and the millions who watched Live8 and asked themselves: why can’t we match that?
“Looked at objectively it makes no sense. Climate change will dwarf the damage the common agricultural policy subsidies wreak on African farmers; it is already costing at least 150,000 lives a year as warmer temperatures encourage disease, and erratic rainfall will starve millions in coming years. Here is an issue that makes all the aid and debt deals of 2005 look like an afternoon parlour game. Yet such was the momentum of the Make Poverty History campaign that climate change slipped off the public radar and environmental groups felt they couldn’t compete.”
So who speaks for the Earth? Certainly not Exxon. Not Bush or Blair.
Well, the Earth speaks for herself. And we just are beginning to feel her anger:
– The prairie burns, children.
– The ice-caps are melting.
– The frogs are dying.
– Goodbye polar bears.
It doesn’t matter if you’re red or blue, get ready for three or four Katrinas a year.
We may be teaching sustainability to a few kids here and there, but our business leaders are too blind and our political leaders too corrupt.
Will the mainstream media ever cover this?
Grizzly-shooting, anyone?
Advice to Women who would be CEOs: “Stay away from HR”
Another blurb in Fortune caught my eye:
Why aren’t there more female CEOs? Interestingly, that question (Nov. 14) inspired many more comments from men than from women, and plenty of them echoed this one, from Henrik S.: “When a man in a high position fails, the reason people give is never ‘because he’s a man.’ Imagine, for example, how different the press coverage would have been if Michael Eisner had been Michelle Eisner.” Most correspondents passed along advice for young female go-getters. The consensus: More women need to major in the sciences and engineering, go to business school, and, as one reader put it, “stay away from jobs in soft support-staff areas like HR, which don’t usually lead to the top no matter who (male or female) is doing them.”
It is a sad fact that women are just not getting to the top.
The culprit in my view is cultural inertia coupled with myopic vision in the boardroom.
See also: “Leadership in Your Midst: Tapping the Hidden Strengths of Minority Executives” by Sylvia Ann Hewlett, Carolyn Buck Luce, and Cornel West (yes, that Cornel West).
Here’s the article abstract:
All companies value leadership–some of them enough to invest dearly in cultivating it. But few management teams seem to value one engine of leadership development that is right under their noses, churning out the kind of talent they need most. It’s the complicated, overburdened but very rich lives of their minority managers. Minority professionals–particularly women of color–are called upon inordinately to lend their skills and guidance to activities outside their jobs. Sylvia Ann Hewlett, who heads the Center for Work-Life Policy, and her co-authors, Carolyn Buck Luce of Ernst & Young and Cornel West of Princeton, present new research on the extent to which minority professionals take on community service and other responsibilities outside the workplace and more than their share of recruiting, mentoring, and committee work within the workplace. These invisible lives, argue the authors, can be a source of competitive strength if companies can learn to recognize and further cultivate the cultural capital they represent. But it’s hard to convince minority professionals that their employer respects and values their off-hours responsibilities. A lack of trust keeps many people from revealing much about their personal lives. The authors outline four ways companies can leverage hidden skills: Develop a new level of awareness of minority professionals’ invisible lives; appreciate the outsize burdens these professionals carry and try to lighten them; build trust by putting teeth into diversity goals; and, to finish the job of leadership development, help minorities reflect on their off-hours experiences, extract and generalize the lessons, and apply what’s been learned in other settings.
Frankly, it’s even worse than this. Most companies (not just in the US) are still run by paternalistic, chauvinistic and yes, racist, management. I’ll blog about this soon.
In the meantime, stay away from HR, PR, and Accounting- if you want to get to the top, that is.
Book Value Deal: Jimmy Carter + Doug Smith
If you’re interested in values and business sustainability, you should check out this double book deal on Amazon.com. For the rest of this month, you can buy On Value and Values by Doug Smith together with Our Endangered Values by Jimmy Carter and save $20.76…
See the details on Doug Smith’s site >>
Jakob Nielsen: Google, Yahoo are Leeches!
Usability guru Jakob Nielsen says: “search engines extract too much of the Web’s value, leaving too little for the websites that actually create the content.”
And: “In the long run, every time companies increase the value of their online businesses, they end up handing over all that added value to the search engines. Any gain is temporary; once competing sites improve their profit-per-visitor enough to increase their search bids, they’ll drive up everybody’s cost of traffic.”
According to Nielsen, “liberation from search dependency is a strategic imperative for both websites and software vendors.”
What does he mean? He means that companies need to focus on search engines for initial acquisition, but then bring them directly to the site- i.e. keep ’em coming back for more.
Again, his words: “The question is: How can websites devote more of their budgets to keeping customers, rather than simply advertising for new visitors?”
Nielsen offers the following suggestions:
– Email newsletters
– Request marketing
– Affiliate programs
– Newsfeeds
– Stick your URL onto any physical product you sell
– A hardware component that’s hardwired to connect to your site’s service
– Mobile features
I have a powerful answer: ’tis double loop marketing!
Read Nielesen’s post >>
Bonus: an interview I did with Jakob Nielsen years ago now…
Getting Your IT Nerds to Innovate
Few studies have studied adoption of IS innovations by IS development (ISD) organizations. I just found a study that does.
Apparently researchers observed ten factors explaining radical innovation.
Seven factors were internal or organizational factors of which four characterize a configuration of capabilities that promote radical innovation within the firm. These four are: 1) Depth of Knowledge Resources; 2) Specialists; 3) Diversity of Knowledge; 4) Related Assets. The remaining three internal factors relate to features of processes where these capabilities are mobilized in ways that promote radical innovation. These three are: 5) Intra-firm Structural Linkages; 6) Experimentation; and 7) Technological Opportunism.
In addition to the seven organizational (internal) factors, three additional environmental (external) factors predict radical innovation within ISD organizations: 8) Environmental Dynamism; 9) Unit Autonomy; and 10) Adopters’ IT Strategic Congruence.
Read the report >>
Michael Porter: The Relationship between Innovation & Living Standards
During the 1990s, Americans found a way to do what seemed no longer possible — grow the economy, create jobs, and increase the standard of living, without driving up inflation. Much of the credit goes to the nation’s ability to develop and commercialize new technology. The result: one of the most robust periods of economic expansion and prosperity of the past century.
Today, the nation is experiencing an economic downturn. While fiscal and monetary policies pump dollars into the economy to boost the level of activity, innovation infuses the economy with growth-incubating new ideas, new products, services, and technologies. National policies and national investment choices have much to do with the growth and capacity of the American economy. For innovation, however, the real locus of innovation is at the regional level. The vitality of the U.S. economy then depends on creating innovation and competitiveness at the regional level.
In healthy regions, competitiveness and innovation are concentrated in clusters, or interrelated industries, in which the region specializes. The nation’s ability to produce high-value products and services that support high wage jobs depends on the creation and strengthening of these regional hubs of competitiveness and innovation.
Led by our buddy Michael Porter, the “Clusters of Innovation Initiative” examined five regions around the country: Atlanta, Pittsburgh, the Research Triangle, San Diego and Wichita.
One key point: “Growth is not the same as prosperity. Growth is only desirable if the standard of living of citizens rises. High growth per se often leads to a rising cost of living that erodes prosperity and degrades natural resources and physical infrastructure that support quality of life.”
My question: are there virtual innovation clusters out there as well? Clusters tied by purpose, but not geography? Is there a way to create and strengthen a virtual innovation cluster?
Read the report, and let’s talk >>
Goldman Sachs’ Environmental Policy Framework
Do you believe this:
Goldman Sachs believes that a healthy environment is necessary for the well-being of
society, our people and our business, and is the foundation for a sustainable and strong
economy.
Goldman Sachs recognizes that diverse, healthy natural resources – fresh water, oceans,
air, forests, grasslands, and agro-systems – are a critical component of social and
sustainable economic development. Forests are particularly important for the
environment and biodiversity. They are vital to water and air quality, and help regulate
climates. Forests are home to thousands of wildlife species, and, at the same time,
represent a natural source of timber. The key challenge for society is to manage the
competing human demands on land, soil and vegetation without undermining crucial
ecosystem functions.
We take seriously our responsibility for environmental stewardship and believe that as a
leading global financial institution we should play a constructive role in helping to
address the challenges facing the environment. To that end, we will work to ensure that
our people, capital and ideas are used to help find effective market-based solutions to
address climate change, ecosystem degradation and other critical environmental issues,
and we will seek to create new business opportunities that benefit the environment. We
will work to identify policy measures that are creative, meaningful and provide real
solutions to environmental problems while recognizing the importance of economic
growth in contributing to the alleviation of poverty. In pursuing these objectives we will
not stray from our central business objective of creating long-term value for our
shareholders and serving the long-term interests of our clients.
Go GS! Make sure you practice what you preach…
Read the full text here >>
Clicks and Conversion Rates in 2005
I just read a Brian Eisenberg article in which he says:
“Depending on whom you ask, average conversion rates are between 2 and 4 percent. By today’s standards, you get bragging rights and the full dose of hero treatment if you can maintain a conversion rate of 5 percent or above. You have deity-like status if your conversion rate approaches double digits. the world’s finest players sport double-digit conversion rates of somewhere around 12-14 percent.
“Of course, I’m referencing top-line conversion: Tthe number of visitors who take the macro action you want them to divided by the total number of site visitors.Aa double-digit conversion rate seems unimaginable to some, but experience demonstrates it’s certainly possible. We’ve seen it happen time and again.”
The funny thing is I have a client, who for some reason, is unimpressed by a 44% conversion rate I’ve gotten for them over the past year. Some months it went down to 39%, in other months it was up as high as 53%. I’m not kidding. And the client still doesn’t understand how amazing this is.
What’s amazing about Double Loop Marketing is just how effective it can be. For instance, my record-breaking conversion rate was 98% for an offer on a landing page from John Hagel and JSB. Now granted, JH3 and JSB are smart people, and when they give away something for free, it’s not difficult to see that they’d have a great conversion rate. That said, 98%?!! I’m still in shock over that one.
This year I’ve resolved to publish a book on the power of Double Loop Marketing, with a few, real-life case studies comparing traditional online marketing approaches with Double Loop Marketing tactics. God and the devil are both in the details, as they say. John Hagel’s has committed to writing the foreword for the book, so I think that itself will make the book worth reading 🙂
Abramoff, Business Ethics, and Peter Drucker on Decision-Making
Find me an honest politician, and I will spare this world. We looked everywhere, but could not find an honest politician.
I’m kidding here, but just barely.
“Abramoff is the central figure in what could become the biggest congressional corruption scandal in generations,” writes the Washington Post.
And today there’s another story: apparently “the U.S. Family Network, a public advocacy group that operated in the 1990s with close ties to Rep. Tom DeLay and claimed to be a nationwide grass-roots organization, was funded almost entirely by corporations linked to embattled lobbyist Jack Abramoff, according to tax records and former associates of the group.”
And:
“Two former associates of Edwin A. Buckham, the congressman’s former chief of staff and the organizer of the U.S. Family Network, said Buckham told them the funds came from Russian oil and gas executives. Abramoff had been working closely with two such Russian energy executives on their Washington agenda, and the lobbyist and Buckham had helped organize a 1997 Moscow visit by DeLay (R-Tex.).”
“The former president of the U.S. Family Network said Buckham told him that Russians contributed $1 million to the group in 1998 specifically to influence DeLay’s vote on legislation the International Monetary Fund needed to finance a bailout of the collapsing Russian economy.”
Everyone knows how corrupt politicians are. These days, it seems worse than ever.
But now we are looking at the Enronization of Business, all business.
If competitive advantage is gained through “bribes,” then why should business ever play straight?
Is corruption the core-competence of successful businesses? What happened to the rule of law?
From Exxon to Wal-mart, businesses have lost their way. In their hurry to boost shareholder value, they are destroying their brands and their future.
They are playing in Box 1 and ignoring Box 3.
So why is this happening? Why are so many smart businesses (and politicians) being so dumb?
The answer comes to us from the late Peter Drucker:
Drucker tells us this story about Alfred P. Sloan Jr. who is reported to have said at a meeting of one of the GM top committees, “Gentlemen, I take it we are all in complete agreement on the decision here.” When everyone around the table nodded in assent, Sloan says: “Then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”
Drucker’s point is that “unless one has considered alternatives, one has a closed mind.” Decision-making for Drucker is best only if based on the clash of conflicting views, the dialogue between different points of view, and the choice between different judgements.”
The first rule of decision-making is that one does not make a decision unless there is disagreement.
Alas, few business leaders or politicians tolerate dissent in their ranks. In fact, they work hard to eliminate nay-sayers.
And that is the root cause of all this corruption. Not money, but bad choices, bad decisions. OK- perhaps it is money after all.
Capturing Attention Data
When you pay attention to something (and when you ignore something), data is created. This “attention data” is a valuable resource that reflects your interests, your activities and your values, and it serves as a proxy for your attention.
I like the AttentionTrust.org model of rights:
Property
You own your attention and can store it wherever you wish. You have CONTROL.
Mobility
You can securely move your attention wherever you want whenever you want to. You have the ability to TRANSFER your attention.
Economy
You can pay attention to whomever you wish and receive value in return. Your attention has WORTH.
Transparency
You can see exactly how your attention is being used. You can DECIDE who you trust.
This is what Google should have done if they were serious about their vision: “Don’t Be Evil.”
Tom Davenport: “Was Drucker Wrong?”
If improving knowledge worker productivity is so important, why aren’t more companies doing something about it?
Tom Davenport seeks an answer in this fun post on the BabsonKnowledge blog >>
MBA Blowback? The Chinese B-School
B-School’s are booming in China, says BusinessWeek:
“For U.S. companies, the emergence of China’s new managerial class has positive and negative implications. For those seeking to penetrate China’s massive market of 1.3 billion people, the graduates of the nation’s new MBA programs will supply a steady stream of local talent with in-depth knowledge of China, something their Western managers can’t provide. But as Western management ideas take root in the nation’s corner offices, multinationals could find themselves confronting a newly powerful adversary: Chinese companies suddenly in possession of the management knowhow needed to go head to head with global giants. Those same ideas — about efficiency, productivity, profitability, and growth — hold vast potential to ignite China’s already blistering economy, raise living standards, and transform the nation from a low-cost manufacturing center to a make-or-break battleground for the global economy.”
Read the full article: China’s B-School Boom
Is this the MBA Blowback? Read JH3 and JSB’s paper on “Innovation Blowback” to see where I’m coming from.
By contrast, in a BW article earlier this year, here’s what they reported about US B-Schools:
“In 2005, just 19% of full-time programs in the U.S. reported an increase in application volume, down from 21% in 2004 and 84% in 2002, when applications reached an all-time high.”
The news for US B-schools just keeps getting worse. A study from the Graduate Management Admission Council shows applications to full-time U.S. MBA programs down for the third consecutive year.
A tale of two empires? One going up, one down? Or is the world just getting flatter?
Robots Easier to Talk to than Humans
“When answering the android’s questions…Japanese subjects were much more likely to look it in the eye than they were a real person.”
The Economist highlights the agenda behind Japan’s race to perfect their robots:
“Many workers from low-wage countries are eager to work in Japan. The Philippines, for example, has over 350,000 trained nurses, and has been pleading with Japan—which accepts only a token few—to let more in. Foreign pundits keep telling Japan to do itself a favour and make better use of cheap imported labour. But the consensus among Japanese is that visions of a future in which immigrant workers live harmoniously and unobtrusively in Japan are pure fancy. Making humanoid robots is clearly the simple and practical way to go.”
Ouch. Read the article here >.
Measuring Democracy: The Journalists-in-Jail Index
In 2005, we have 125 journalists sitting in jail (that we know of).
China, Cuba, Eritrea, and Ethiopia are the world’s leading jailers of journalists in 2005, together accounting for two-thirds of the 125 editors, writers, and photojournalists imprisoned around the world, according to a new analysis by the Committee to Protect Journalists.
The United States, which is holding journalists in detention centers in Iraq and Guantánamo Bay, Cuba, rose to sixth among countries jailing journalists, just behind Uzbekistan and tied with Burma, CPJ found.
Is this a good way to measure democracy?
See the numbers here >>
UK Organic Food And Drink Market Now Worth £1Bn
Sales of organic food and drink have almost doubled to more than £1 billion in just five years, reveals a new report.
The organic market has mushroomed in value by 94 per cent between 2000 and 2005 to reach £1.2 billion this year, say consumer analysts Mintel. And they tip the blossoming organic sector to double in value again in just five years to be worth £2 billion by the year 2010.
Now – with organic products championed by TV chefs including Jamie Oliver and Rick Stein – just one-in-three (29 per cent) of British adults say that they never buy organic, down from some 37 per cent just two years ago.
The research also found that organic goods can no longer be seen as the preserve of affluent “foodies.”
Julie Sloan, Mintel’s senior market analyst, said: “Among those who have bought organic produce in the last 12 months, there is in fact surprisingly little difference between the better off ABs and those in the middle income C1 group.”
Go there to read more >>
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 >>
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 >>
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
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