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.”

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 or The Seven-Day Weekend: Changing the Way Work Works you’ll agree that something more spectacular than futbol has emerged from Brasil, er, Brazil.

Read the S+B article here.

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

More fun:

– the Wikipedia entry on Ricardo Semler and Workplace Democracy

– the official Semco Management Model Manifesto:

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

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

– ‘Idleness is good’ in the Guardian

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

– transcript of a CNN interview with Semler

– a somewhat dusty case study from Thunderbird on Semco

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

Sustainability: The Stumbling Block is Culture

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

The German Niceness Subsidy

Andrew Hammel has a great post on “kid-friendly” policy-making in Germany:
The German government showers money and benefits on people who have children. They’re allowed to take a”child-raising vacation” from work (i.e. to reduce their work-week to between 15 and 30 hours, if they choose), they get a per-child bonus called “child-money,” and starting in 2007 there will be a new kind of “parent-money.”
The exact opposite of the US.
Read the full post here.
Doesn’t this tie in neatly to “The ExecutiveTalent Revolt”?

Craig Barrett: Where the Science Nerds At?

“In China engineering accounted for 65% of all science and engineering degrees; in South Korea for 58%; and in Japan for 29%. In the U.S. that figure is less than 5%.”
That’s Craig Barrett talking about the dearth of students signing up for scientific degrees in BusinessWeek.
He goes on:
“While the number of jobs requiring technical skills is increasing, fewer American students are entering — and graduating from — degree programs in science, math, and engineering.
Why does this matter? Science and technology are the engines of economic growth and national security in the U.S., and we are no longer producing enough qualified graduates to keep up with the demand. ”
Intel spends $100 million a year on education programs- to create a deeper pool of qualified talent at home. Is it working?
I wonder how much Microsoft is spending… or Exxon-Mobil?
And when they spend the money, how do they measure performance?
Read the article >>
I posted on this earlier: Have We Given Up on Science?

The Legislators of Mankind?

2005 Harold Pinter
2004 Elfriede Jelinek
2003 J.M. Coetzee
2002 Imre Kertész
2001 V.S. Naipaul
2000 Gao Xingjian
1999 Günter Grass
1998 José Saramago
1997 Dario Fo
1996 Wislawa Szymborska
1995 Seamus Heaney
1994 Kenzaburo Oe
1993 Toni Morrison
1992 Derek Walcott
1991 Nadine Gordimer
1990 Octavio Paz
1989 Camilo José Cela
1988 Naguib Mahfouz
1987 Joseph Brodsky
1986 Wole Soyinka
1985 Claude Simon
1984 Jaroslav Seifert
1983 William Golding
1982 Gabriel García Márquez
1981 Elias Canetti
1980 Czeslaw Milosz
1979 Odysseus Elytis
1978 Isaac Bashevis Singer
1977 Vicente Aleixandre
1976 Saul Bellow
1975 Eugenio Montale
1974 Eyvind Johnson, Harry Martinson
1973 Patrick White
1972 Heinrich Böll
1971 Pablo Neruda
1970 Alexandr Solzhenitsyn
1969 Samuel Beckett
1968 Yasunari Kawabata
1967 Miguel Angel Asturias
1966 Samuel Agnon, Nelly Sachs
1965 Mikhail Sholokhov
1964 Jean-Paul Sartre
1963 Giorgos Seferis
1962 John Steinbeck
1961 Ivo Andric
1960 Saint-John Perse
1959 Salvatore Quasimodo
1958 Boris Pasternak
1957 Albert Camus
1956 Juan Ramón Jiménez
1955 Halldór Laxness
1954 Ernest Hemingway
1953 Winston Churchill
1952 François Mauriac
1951 Pär Lagerkvist
1950 Bertrand Russell
1949 William Faulkner
1948 T.S. Eliot
1947 André Gide
1946 Hermann Hesse
1945 Gabriela Mistral
1944 Johannes V. Jensen
1943 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section
1942 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section
1941 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section
1940 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section
1939 Frans Eemil Sillanpää
1938 Pearl Buck
1937 Roger Martin du Gard
1936 Eugene O’Neill
1935 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section
1934 Luigi Pirandello
1933 Ivan Bunin
1932 John Galsworthy
1931 Erik Axel Karlfeldt
1930 Sinclair Lewis
1929 Thomas Mann
1928 Sigrid Undset
1927 Henri Bergson
1926 Grazia Deledda
1925 George Bernard Shaw
1924 Wladyslaw Reymont
1923 William Butler Yeats
1922 Jacinto Benavente
1921 Anatole France
1920 Knut Hamsun
1919 Carl Spitteler
1918 The prize money was allocated to the Special Fund of this prize section
1917 Karl Gjellerup, Henrik Pontoppidan
1916 Verner von Heidenstam
1915 Romain Rolland
1914 The prize money was allocated to the Special Fund of this prize section
1913 Rabindranath Tagore
1912 Gerhart Hauptmann
1911 Maurice Maeterlinck
1910 Paul Heyse
1909 Selma Lagerlöf
1908 Rudolf Eucken
1907 Rudyard Kipling
1906 Giosuè Carducci
1905 Henryk Sienkiewicz
1904 Frédéric Mistral, José Echegaray
1903 Bjørnstjerne Bjørnson
1902 Theodor Mommsen
1901 Sully Prudhomme

Harold Pinter’s Nobel Lecture: The Pen Against the Sword

From Harold Pinter – Nobel Lecture
Art, Truth & Politics

© THE NOBEL FOUNDATION 2005
In 1958 I wrote the following:
‘There are no hard distinctions between what is real and what is unreal, nor between what is true and what is false. A thing is not necessarily either true or false; it can be both true and false.’
I believe that these assertions still make sense and do still apply to the exploration of reality through art. So as a writer I stand by them but as a citizen I cannot. As a citizen I must ask: What is true? What is false?
Truth in drama is forever elusive. You never quite find it but the search for it is compulsive. The search is clearly what drives the endeavour. The search is your task. More often than not you stumble upon the truth in the dark, colliding with it or just glimpsing an image or a shape which seems to correspond to the truth, often without realising that you have done so. But the real truth is that there never is any such thing as one truth to be found in dramatic art. There are many. These truths challenge each other, recoil from each other, reflect each other, ignore each other, tease each other, are blind to each other. Sometimes you feel you have the truth of a moment in your hand, then it slips through your fingers and is lost.
I have often been asked how my plays come about. I cannot say. Nor can I ever sum up my plays, except to say that this is what happened. That is what they said. That is what they did.
…….
I have said earlier that the United States is now totally frank about putting its cards on the table. That is the case. Its official declared policy is now defined as ‘full spectrum dominance’. That is not my term, it is theirs. ‘Full spectrum dominance’ means control of land, sea, air and space and all attendant resources.
The United States now occupies 702 military installations throughout the world in 132 countries, with the honourable exception of Sweden, of course. We don’t quite know how they got there but they are there all right.
The United States possesses 8,000 active and operational nuclear warheads. Two thousand are on hair trigger alert, ready to be launched with 15 minutes warning. It is developing new systems of nuclear force, known as bunker busters. The British, ever cooperative, are intending to replace their own nuclear missile, Trident. Who, I wonder, are they aiming at? Osama bin Laden? You? Me? Joe Dokes? China? Paris? Who knows? What we do know is that this infantile insanity – the possession and threatened use of nuclear weapons – is at the heart of present American political philosophy. We must remind ourselves that the United States is on a permanent military footing and shows no sign of relaxing it.
Many thousands, if not millions, of people in the United States itself are demonstrably sickened, shamed and angered by their government’s actions, but as things stand they are not a coherent political force – yet. But the anxiety, uncertainty and fear which we can see growing daily in the United States is unlikely to diminish.
I know that President Bush has many extremely competent speech writers but I would like to volunteer for the job myself. I propose the following short address which he can make on television to the nation. I see him grave, hair carefully combed, serious, winning, sincere, often beguiling, sometimes employing a wry smile, curiously attractive, a man’s man.
‘God is good. God is great. God is good. My God is good. Bin Laden’s God is bad. His is a bad God. Saddam’s God was bad, except he didn’t have one. He was a barbarian. We are not barbarians. We don’t chop people’s heads off. We believe in freedom. So does God. I am not a barbarian. I am the democratically elected leader of a freedom-loving democracy. We are a compassionate society. We give compassionate electrocution and compassionate lethal injection. We are a great nation. I am not a dictator. He is. I am not a barbarian. He is. And he is. They all are. I possess moral authority. You see this fist? This is my moral authority. And don’t you forget it.’
A writer’s life is a highly vulnerable, almost naked activity. We don’t have to weep about that. The writer makes his choice and is stuck with it. But it is true to say that you are open to all the winds, some of them icy indeed. You are out on your own, out on a limb. You find no shelter, no protection – unless you lie – in which case of course you have constructed your own protection and, it could be argued, become a politician.
I have referred to death quite a few times this evening. I shall now quote a poem of my own called ‘Death’.
Where was the dead body found?
Who found the dead body?
Was the dead body dead when found?
How was the dead body found?
Who was the dead body?
Who was the father or daughter or brother
Or uncle or sister or mother or son
Of the dead and abandoned body?
Was the body dead when abandoned?
Was the body abandoned?
By whom had it been abandoned?
Was the dead body naked or dressed for a journey?
What made you declare the dead body dead?
Did you declare the dead body dead?
How well did you know the dead body?
How did you know the dead body was dead?
Did you wash the dead body
Did you close both its eyes
Did you bury the body
Did you leave it abandoned
Did you kiss the dead body
When we look into a mirror we think the image that confronts us is accurate. But move a millimetre and the image changes. We are actually looking at a never-ending range of reflections. But sometimes a writer has to smash the mirror – for it is on the other side of that mirror that the truth stares at us.
I believe that despite the enormous odds which exist, unflinching, unswerving, fierce intellectual determination, as citizens, to define the real truth of our lives and our societies is a crucial obligation which devolves upon us all. It is in fact mandatory.
If such a determination is not embodied in our political vision we have no hope of restoring what is so nearly lost to us – the dignity of man.

Read the whole thing and weep.

McKinsey’s Peter Drucker Collection

The great and growing collection of outside work that Drucker’s thinking has generated testifies to the seminal place of his ideas on the role of knowledge in companies. These articles from the McKinsey Quarterly archive look at how companies might maximize the benefits from their in-house knowledge.
– Best practice and beyond: Knowledge strategies (premium)
– Managing the knowledge manager
– Do you know who your experts are?
– Making a market in knowledge
– The 21st-century organization (premium)

I particularly liked this diagram in “Managing the knowledge manager”:

Check out the collection here >>
Did I mention I hate McKinsey’s “premium” content policy? Those McK-partners are just penny-pinching millionaires. The Mercer people get it: their content is open. Open-up, McKinsey!

McKinsey: Knowledge Worker Productivity- The Key to Competitive Advantage?

McKinsey spits out an interesting article today- “The next revolution in interactions.”
“In today’s developed economies, the significant nuances in employment concern interactions: the searching, monitoring, and coordinating required to manage the exchange of goods and services. Since 1997, extensive McKinsey research on jobs in many industries has revealed that globalization, specialization, and new technologies are making interactions far more pervasive in developed economies. Currently, jobs that involve participating in interactions rather than extracting raw materials or making finished goods account for more than 80 percent of all employment in the United States. And jobs involving the most complex type of interactions—those requiring employees to analyze information, grapple with ambiguity, and solve problems—make up the fastest-growing segment.”
What they’re saying is that knowledge work is up, manual work is down– and they do a good job of breaking this down by industry.
“Over this past year, we looked closely at different kinds of interactions. Companies in many sectors are hiring additional employees for more complex interactions and fewer employees for less complex ones. For instance, frontline managers and nurses—who must exercise high levels of judgment and often draw on what economists call tacit knowledge, or experience- are in great demand. Workers who perform more routine interactions, such as clerical tasks, are less sought after. In fact, companies have been automating and outsourcing jobs that involve many of these transactional interactions.
“The shift from transactional to tacit interactions requires companies to think differently about how to improve performance—and about their technology investments. Moreover, the rise of tacit occupations opens up the possibility that companies can again create capabilities and advantages that rivals can’t easily duplicate.”
Worth reading.
The McKinsey folk need to spend some time chatting with Tom Davenport. His latest book – Thinking for a Living: How to Get Better Performance and Results from Knowledge Workers – gets into this in some detail.

How Sick is Your Company?

Is your company Passive-Aggressive, Fits-and-Starts, Outgrown, Overmanaged, Just-in-Time, Military Precision, or Resilient? These are the fun categories that make up your organization’s DNA, according to the folks at BAH.
Read the HBR article: The Passive-Aggressive Organization by Gary L. Neilson, Bruce A. Pasternack, and Karen E. Van Nuys.
“Healthy companies are hard to mistake. Their managers have access to good, timely information, the authority to make informed decisions, and the incentives to make them on behalf of the organization, which promptly and capably carries them out. A good term for the healthiest of such organizations is “resilient,” since they can react nimbly to challenges and recover quickly from those they cannot dodge. Unfortunately, most companies are not resilient. In fact, fewer than one in five of the approximately 30,000 individuals who responded to a global online survey Booz Allen Hamilton conducted describe their organizations that way. The largest number—over one-quarter—say they suffer from the cluster of pathologies we place under the label “passive-aggressive.’’ The category takes its name from the organization’s quiet but tenacious resistance, in every way but openly, to corporate directives.
“In passive-aggressive organizations, people pay those directives lip service, putting in only enough effort to appear compliant.”
I used to work for someone like that once. Her strategy was to say yes and do nothing. The result? Nothing happened. Everything I accomplished happened despite of my boss, not because of her. I also knew an entire IT department at a Fortune 500 company that behaved the same way. The modus operandi was: “What can we NOT do today?”

Wait. There’s more.
Here’s a full report on the research – “A Global Check-Up: Diagnosing the Health of Today’s Organizations”

The Economist: Fat Turkey Takes All the Gravy


Says the Economist:
“Executive compensation in America—already far ahead of the rest of the world, despite the best efforts of overseas managers to catch up—is now rising inexorably again. In fiscal year 2004 the total compensation of the median American company boss rose in every industry, by between 9.7% in commercial banking and 46.1% in energy, according to a new report by the Conference Board, a research organisation. In the big companies that comprise the S&P 500 index, median total chief-executive compensation increased by 30.2% last year, to $6m, compared with a 15% rise in 2003, according to a study published last month by the Corporate Library, a firm that tracks corporate-governance data.”
One of the interviewees – Bob Pozen, chairman of MFS Investment Management, is pissed off at executive pay packages that reward bosses generously even if they fail. He is extremely critical of the role of compensation consultants. They, he says, tend to be chosen by the chief executive, and to drive up pay by recommending that the top man should be paid more than his peers, having chosen a group of peers whose pay errs on the high side.
Hmmm. Can we outsource the CEO to a low-cost country? Is there no cure for Enron-ititis? Read the full article.
Maybe that’s why Peter Drucker wasn’t so popular at the end. He called this “looting.”
The last word – again from the Economist: “…hell is more likely to freeze than bosses’ pay.”

“Competing on Analytics” – Tom Davenport and friends

Competing on Analytics is a Babson Executive Education report by Tom Davenport, Don Cohen and Al Jacobson.
The report describes the emergence of a new form of competition based on the extensive use of analytics, data, and fact-based decision making. The analytics— quantitative or statistical models to analyze business problems—may be applied to a variety of business problems, including customer management, supply chains, and financial performance. The research assessed 32 firms with regard to their orientation to analytics; about one-third were classified as fully engaged in analytically oriented strategies. Both demand and supply factors for analytical competition are described. Of the two, demand factors are the more difficult to create. The presence of one or more committed senior executives is a primary driver of analytical competition.
Registration is required for download, but it’s worth it.

John Byrne on Drucker: “The Man Who Invented Management”

A human look at Drucker’s contributions from John Byrne and Lindsey Gerdes at BW:

— It was Drucker who introduced the idea of decentralization — in the 1940s — which became a bedrock principle for virtually every large organization in the world.
— He was the first to assert — in the 1950s — that workers should be treated as assets, not as liabilities to be eliminated.
— He originated the view of the corporation as a human community — again, in the 1950s — built on trust and respect for the worker and not just a profit-making machine, a perspective that won Drucker an almost godlike reverence among the Japanese.
— He first made clear — still the ’50s — that there is “no business without a customer,” a simple notion that ushered in a new marketing mind-set.
— He argued in the 1960s — long before others — for the importance of substance over style, for institutionalized practices over charismatic, cult leaders.
— And it was Drucker again who wrote about the contribution of knowledge workers — in the 1970s — long before anyone knew or understood how knowledge would trump raw material as the essential capital of the New Economy.

read it here

Check out this very, very interesting podcast… John Byrne talks about his first meeting with Peter Drucker and his wife Doris at the YMCA in Estes Park, on how Drucker saw “business as an opportunity to build community” – the problem of executive pay – and much, much more.

Warren Bennis: “Peter Drucker, how do you learn?”
Answer: ” By listening, only to myself!”

Great podcast!

On Drucker: John Hagel, Tom Peters, William Dunk

Here are more views on Drucker from some very smart people:
>> John Hagel on his Edgeperspectives Blog:
Drucker’s Gone
“I am laid up with the flu so I am still having trouble processing the reality that Drucker’s gone. Drucker was an iconoclast who lived on the edge throughout his life. Prolific until the very end of a long life (he was 95 when he passed away last Friday), he always sought to move beyond established boundaries, believing that they limit the potential for insight and understanding…” Read the post >>
>> Tom Peters, in his “Dispatches from the New World of Work” blog:
Peter F. Drucker: Right Man for His/Our Times
“…Peter Drucker did arguably (1) “invent” modern management as we now think of it; (2) give the study and craft of management-as-profession credibility and visibility, even though biz schools like Harvard had been around for a long time; and (3) provide a (the first?) comprehensive toolkit-framework for addressing and even mastering the problems of emergent enterprise complexity…” More >>
>> William Dunk at Global Province:
Death at Claremont.
“The ultimate prophet of profit, Peter Drucker died last Friday, his mind churning to the end. He had spent his last years in residence at Claremont, having made his early imprint at New York University with Juran, Deming, and Feigenbaum, and as one of these four horsemen helped remake Japan’s economy after the war. Standard reading in business schools and corporate suites, his books turned heads from here to Tokyo. Compared to him, all the gurus out of McKinsey and the business schools have always seemed to be pretty tame stuff…” Read more >>
BTW, I’m amazed at the response my Drucker cartoons are getting. It seems like the “community of Drucker fans” is alive and well.

Foreign Investors Lose Appetite for Treasuries as Deficit Rises

The U.S. government is growing more dependent on investors from abroad just as their appetite for Treasury securities is waning.
Overseas investors, who own half of all U.S. government debt, bought 14 percent of the $79 billion in benchmark 10-year notes auctioned this year, down from 21 percent in 2004, Treasury Department data show. Bidders including foreign central banks purchased a smaller percentage of the $44 billion in three-, five- and 10-year notes the Treasury sold last week than they did a year ago.
more from Bloomberg >>
Looks like interest rates will rise with or without inflation…

Global Culture: Steel Pulse


How does a band like Steel Pulse make it?
Word-of-mouth plus quality…
They’ve been around forever [over 25 years], nobody plays them on the radio, and yet they’re everywhere. We do live in a global village. And David Hinds is a global voice.
Here’s a Steel Pulse history from NPR >> Check it!

Peter Drucker: The Best Podcast Ever

I just stumbled on to the best Peter Drucker interview ever. The interview aired on Tuesday, August 02, 2005 – so this is fairly recent stuff. It’s an hour long, but terribly important for us now.
In the interview, we find out what Drucker thinks about:
– US involvement in Iraq
– Roosevelt, Truman, Hitler, Stalin, Mao, a hint about Bush
– The Future of America
– Executive Pay
– Knowledge Worker Productivity
– The Knowledge Society
– The American College system
– Capitalism & Free Markets
– The Future of Government
– Cutting the Things that Government is Good At
– Power and its Limits
– The First Constituent – NOT the Shareholder but the Consumer (!)
– Power Sharing in the New World
– The Prosperity of Denmark and Holland
– Where the World is Going
– The End of Western Dominance
– Pluralism: Values and Co-Existence
– Information not Power
– 30 Rough Years Ahead
– America’s Return to Humility
– God
The interview blew me away. Listen to it here
I also found a great print interview with Drucker with Forbes’ Rich Karlgaard. Here are some excerpts:
What Needs to Be Done
Successful leaders don’t start out asking, “What do I want to do?” They ask, “What needs to be done?” Then they ask, “Of those things that would make a difference, which are right for me?” They don’t tackle things they aren’t good at. They make sure other necessities get done, but not by them. Successful leaders make sure that they succeed! They are not afraid of strength in others. Andrew Carnegie wanted to put on his gravestone, “Here lies a man who knew how to put into his service more able men than he was himself.”
Check Your Performance
Effective leaders check their performance. They write down, “What do I hope to achieve if I take on this assignment?” They put away their goals for six months and then come back and check their performance against goals. This way, they find out what they do well and what they do poorly. They also find out whether they picked the truly important things to do. I’ve seen a great many people who are exceedingly good at execution, but exceedingly poor at picking the important things. They are magnificent at getting the unimportant things done. They have an impressive record of achievement on trivial matters.
Mission Driven
Leaders communicate in the sense that people around them know what they are trying to do. They are purpose driven–yes, mission driven. They know how to establish a mission. And another thing, they know how to say no. The pressure on leaders to do 984 different things is unbearable, so the effective ones learn how to say no and stick with it. They don’t suffocate themselves as a result. Too many leaders try to do a little bit of 25 things and get nothing done. They are very popular because they always say yes. But they get nothing done.
Creative Abandonment
A critical question for leaders is, “When do you stop pouring resources into things that have achieved their purpose?” The most dangerous traps for a leader are those near-successes where everybody says that if you just give it another big push it will go over the top. One tries it once. One tries it twice. One tries it a third time. But, by then it should be obvious this will be very hard to do. So, I always advise my friend Rick Warren, “Don’t tell me what you’re doing, Rick. Tell me what you stopped doing.”
The Rise of the Modern Multinational
The modern multinational corporation was invented in 1859. Siemens invented it because the English Siemens company had grown faster than the German parent. Before the Second World War, IBM was a small maker, not of computers, but of adding machines. They had one branch in England, which was very typical for the era. In the 1920s, General Motors bought a German and English and then Australian automobile manufacturer. The first time somebody from Detroit actually visited the European subsidiaries was in 1950. A trip to Europe was a big trip. You were gone three months. I still remember the excitement when the then head of GM went to Europe in the 1920s to buy the European properties. He never went back.
21st Century Organizations
Let me give you one example. This happens to be a consulting firm headquartered in Boston. Each morning, between 8 A.M. and 9 A.M. Boston time, which is 5 A.M. in the morning here in California and 11 P.M. in Tokyo, the firm conducts a one-hour management meeting on the Internet. That would have been inconceivable a few years back when you couldn’t have done it physically. And for a few years, I worked with this firm closely and I had rented a room in a nearby motel and put in a videoconferencing screen. Once a week, I participated in this Internet meeting and we could do it quite easily, successfully. As a result of which, that consulting firm is not organized around localities but around clients.
How To Lead a 21st Century Organization
Don’t travel so much. Organize your travel. It is important that you see people and that you are seen by people maybe once or twice a year. Otherwise, don’t travel. Make them come to see you. Use technology–it is cheaper than traveling. I don’t know anybody who can work while traveling. Do you? The second thing to say is make sure that your subsidiaries and foreign offices take up the responsibility to keep you informed. So, ask them twice a year, “What activities do you need to report to me?” Also ask them, “What about my activity and my plans do you need to know from me?” The second question is just as important.
Prisoner of Your Own Organization
When you are the chief executive, you’re the prisoner of your organization. The moment you’re in the office, everybody comes to you and wants something, and it is useless to lock the door. They’ll break in. So, you have to get outside the office. But still, that isn’t traveling. That’s being at home or having a secret office elsewhere. When you’re alone, in your secret office, ask the question, “What needs to be done?” Develop your priorities and don’t have more than two. I don’t know anybody who can do three things at the same time and do them well. Do one task at a time or two tasks at a time. That’s it. OK, two works better for most. Most people need the change of pace. But, when you are finished with two jobs or reach the point where it’s futile, make the list again. Don’t go back to priority three. At that point, it’s obsolete.
How Organizations Fall Down
Make sure the people with whom you work understand your priorities. Where organizations fall down is when they have to guess at what the boss is working at, and they invariably guess wrong. So the CEO needs to say, “This is what I am focusing on.” Then the CEO needs to ask of his associates, “What are you focusing on?” Ask your associates, “You put this on top of your priority list–why?” The reason may be the right one, but it may also be that this associate of yours is a salesman who persuades you that his priorities are correct when they are not. So, make sure that you understand your associates’ priorities and make sure that after you have that conversation, you sit down and drop them a two-page note–“This is what I think we discussed. This is what I think we decided. This is what I think you committed yourself to within what time frame.” Finally, ask them, “What do you expect from me as you seek to achieve your goals?”
The Transition from Entrepreneur to Large Company CEO
Again, let’s start out discussing what not to do. Don’t try to be somebody else. By now you have your style. This is how you get things done. Don’t take on things you don’t believe in and that you yourself are not good at. Learn to say no. Effective leaders match the objective needs of their company with the subjective competencies. As a result, they get an enormous amount of things done fast.
How Capable Leaders Blow It
One of the ablest men I’ve worked with, and this is a long time back, was Germany’s last pre-World War II democratic chancellor, Dr. Heinrich Bruning. He had an incredible ability to see the heart of a problem. But he was very weak on financial matters. He should have delegated but he wasted endless hours on budgets and performed poorly. This was a terrible failing during a Depression and it led to Hitler. Never try to be an expert if you are not. Build on your strengths and find strong people to do the other necessary tasks.
The Danger Of Charisma
You know, I was the first one to talk about leadership 50 years ago, but there is too much talk, too much emphasis on it today and not enough on effectiveness. The only thing you can say about a leader is that a leader is somebody who has followers. The most charismatic leaders of the last century were called Hitler, Stalin, Mao and Mussolini. They were mis-leaders! Charismatic leadership by itself certainly is greatly overstated. Look, one of the most effective American presidents of the last 100 years was Harry Truman. He didn’t have an ounce of charisma. Truman was as bland as a dead mackerel. Everybody who worked for him worshiped him because he was absolutely trustworthy. If Truman said no, it was no, and if he said yes, it was yes. And he didn’t say no to one person and yes to the next one on the same issue. The other effective president of the last 100 years was Ronald Reagan. His great strength was not charisma, as is commonly thought, but that he knew exactly what he could do and what he could not do.
How To Reinvigorate People
Within organizations there are people who, typically in their 40s, hit a midlife crisis when they realize that they won’t make it to the top or discover that they are not yet first-rate. This happens to engineers and accountants and technicians. The worst midlife crisis is that of physicians, as you know. They all have a severe midlife crisis. Basically, their work becomes awfully boring. Just imagine seeing nothing for 30 years but people with a skin rash. They have a midlife crisis, and that’s when they take to the bottle. How do you save these people? Give them a parallel challenge. Without that, they’ll soon take to drinking or to sleeping around. In a coeducational college, they sleep around and drink. The two things are not incompatible, alas! Encourage people facing a midlife crisis to apply their skills in the non-profit sector.
Character Development
We have talked a lot about executive development. We have been mostly talking about developing people’s strength and giving them experiences. Character is not developed that way. That is developed inside and not outside. I think churches and synagogues and the 12-step recovery programs are the main development agents of character today.
Wow. And that was in print.
Again, don’t forget to listen to the interview here

Managing Ignorance: The Passing of Peter Drucker


Farewell Peter Drucker.
The biggest business thinker of them all is gone. Perhaps business will start listening to him now. A sad day.
from the NY Times:
Peter F. Drucker, the political economist and author, whose view that big business and nonprofit enterprises were the defining innovation of the 20th century led him to pioneering social and management theories, died yesterday at his home in Claremont, Calif. He was 95.
His death was announced by Claremont Graduate University.
Mr. Drucker thought of himself, first and foremost, as a writer and teacher, though he eventually settled on the term “social ecologist.” He became internationally renowned for urging corporate leaders to agree with subordinates on objectives and goals and then get out of the way of decisions about how to achieve them.
He challenged both business and labor leaders to search for ways to give workers more control over their work environment. He also argued that governments should turn many functions over to private enterprise and urged organizing in teams to exploit the rise of a technology-astute class of “knowledge workers.”
Mr. Drucker staunchly defended the need for businesses to be profitable but he preached that employees were a resource, not a cost. His constant focus on the human impact of management decisions did not always appeal to executives, but they could not help noticing how it helped him foresee many major trends in business and politics.
He began talking about such practices in the 1940’s and 50’s, decades before they became so widespread that they were taken for common sense. Mr. Drucker also foresaw that the 1970’s would be a decade of inflation, that Japanese manufacturers would become major competitors for the United States and that union power would decline.
For all his insights, he clearly owed much of his impact to his extraordinary energy and skills as a communicator. But while Mr. Drucker loved dazzling audiences with his wit and wisdom, his goal was not to be known as an oracle. Indeed, after writing a rosy-eyed article shortly before the stock market crash of 1929 in which he outlined why stocks prices would rise, he pledged to himself to stay away from gratuitous predictions. Instead, his views about where the world was headed generally arose out of advocacy for what he saw as moral action.
His first book (“The End of Economic Man,” 1939)was intended to strengthen the will of the free world to fight fascism. His later economic and social predictions were intended to encourage businesses and social groups to organize in ways that he felt would promote human dignity and vaccinate society against political and economic chaos.
“He is remarkable for his social imagination, not his futurism,” said Jack Beatty in a 1998 review of Mr. Drucker’s work “The World According to Peter Drucker.”
Mr. Drucker, who was born in Vienna and never completely shed his Austrian accent, worked in Germany as a reporter until Hitler rose to power and then in a London investment firm before emigrating to the United States in 1937. He became an American citizen in 1943.
Recalling the disasters that overran the Europe of his youth and watching the American response left him convinced that good managers were the true heroes of the century.
The world, especially the developed world, had recovered from repeated catastrophe because “ordinary people, people running the everyday concerns of business and institutions, took responsibility and kept on building for tomorrow while around them the world came crashing down,” he wrote in 1986 in “The Frontiers of Management.”
Mr. Drucker never hesitated to make suggestions he knew would be viewed as radical. He advocated legalization of drugs and stimulating innovation by permitting new ventures to charge the government for the cost of regulations and paperwork. He was not surprised that General Motors for years ignored nearly every recommendation in “The Concept of the Corporation,” the book he published in 1946 after an 18-month study of G.M. that its own executives had commissioned.
From his early 20’s to his death, Mr. Drucker held various teaching posts, including a 20-year stint at the Stern School of Management at New York University and, since 1971, a chair at the Claremont Graduate School of Management. He also consulted widely, devoting several days a month to such work into his 90’s. His clients included G.M., General Electric and Sears, Roebuck but also the Archdiocese of New York and several Protestant churches; government agencies in the United States, Canada and Japan; universities; and entrepreneurs.
For over 50 years, at least half of the consulting work was done free for nonprofits and small businesses. As his career progressed and it became clearer that competitive pressures were keeping businesses from embracing many practices he advocated, like guaranteed wages and lifetime employment for industrial workers, he became increasingly interested in “the social sector,” as he called the nonprofit groups.
Mr. Drucker counseled groups like the Girl Scouts to think like businesses even though their bottom line was “changed lives” rather than profits. He warned them that donors would increasingly judge them on results rather than intentions. In 1990, Frances Hesselbein, the former national director of the Girl Scouts, organized a group of admirers to honor him by setting up the Peter F. Drucker Foundation for Nonprofit Management in New York to expose nonprofits to Mr. Drucker’s thinking and to new concepts in management.
Mr. Drucker’s greatest impact came from his writing. His more than 30 books, which have sold tens of millions of copies in more than 30 languages, came on top of thousands of articles, including a monthly op-ed column in The Wall Street Journal from 1975 to 1995.
Among the sayings of Chairman Peter, as he was sometimes called, were these:
¶”Marketing is a fashionable term. The sales manager becomes a marketing vice president. But a gravedigger is still a gravedigger even when it is called a mortician – only the price of the burial goes up.”
¶”One either meets or one works.”
¶”The only things that evolve by themselves in an organization are disorder, friction and malperformance.”
¶”Stock option plans reward the executive for doing the wrong thing. Instead of asking, ‘Are we making the right decision?’ he asks, ‘How did we close today?’ It is encouragement to loot the corporation.”
Mr. Drucker’s thirst for new experiences never waned. He became so fascinated with Japanese art during his trips to Japan after World War II that he eventually helped write “Adventures of the Brush: Japanese Paintings” (1979), and lectured on Oriental art at Pomona College in Claremont from 1975 to 1985.
Peter Ferdinand Drucker was born Nov. 19, 1909, one of two sons of Caroline and Adolph Drucker, a prominent lawyer and high-ranking civil servant in the Austro-Hungarian government. He left Vienna in 1927 to work for an export firm in Hamburg, Germany, and to study law.
Mr. Drucker then moved to Frankfurt, where he earned a doctorate in international and public law in 1931 from the University of Frankfurt, became a reporter and then senior editor in charge of financial and foreign news at the newspaper General-Anzeiger, and, while substitute teaching at the university, met Doris Schmitz, a 19-year-old student. They became reacquainted after waving madly while passing each other going opposite directions on a London subway escalator in 1933 and were married in 1937.
Mr. Drucker had moved to England to work as a securities analyst and writer after watching the rise of the Nazis with increasing alarm. In England, he took an economics course from John Maynard Keynes in Cambridge, but was put off by how much the talk centered on commodities rather than people.
Mr. Drucker’s reputation as a political economist was firmly established with the publication in 1939 of “The End of Economic Man.” The New York Times said it brought a “remarkable vision and freshness” to the understanding of fascism. The book’s observations, along with those in articles he wrote for Harpers and The New Republic, caught the eye of policy makers in the federal government and at corporations as the country prepared for war, and landed him a job teaching at Sarah Lawrence College in Bronxville, N.Y.
Writing “The Future of Industrial Man,” published in 1942 after Mr. Drucker moved to Bennington College in Vermont, convinced him that he needed to understand big organizations from the inside. Rebuffed in his requests to work with several major companies, he was delighted when General Motors called in late 1943 proposing that he study its structure and policies. To avoid having him treated like a management spy, G.M. agreed to let him publish his findings.
Neither G.M. nor Mr. Drucker expected the public to be interested because no one had ever written such a management profile, but “The Concept of the Corporation” became an overnight sensation when it was published in 1946. ” ‘Concept of the Corporation’ is a book about business the way ‘Moby Dick’ is a book about whaling,” said Mr. Beatty, referring to the focus on social issues extending far beyond G.M.’s immediate operating challenges.
In it, Mr. Drucker argued that profitability was crucial to a business’s health but more importantly to full employment. Management could achieve sustainable profits only by treating employees like valuable resources. That, he argued, required decentralizing the power to make decisions, including giving hourly workers more control over factory life, and guaranteed wages.
In the 1950’s, Mr. Drucker began proclaiming that democratic governments had become too big to function effectively. This, he said, was a threat to the freedom of their citizens and to their economic well-being.
Unlike many conservative thinkers, Mr. Drucker wanted to keep government regulation over areas like food and drugs and finance. Indeed, he argued that the rise of global businesses required stronger governments and stronger social institutions, including more powerful unions, to keep them from forgetting social interests.
According to Claremont Graduate University, Mr. Drucker’s survivors include his wife, Doris, an inventor and physicist; his children, Audrey Drucker of Puyallup, Wash., Cecily Drucker of San Francisco, Joan Weinstein of Chicago, and Vincent Drucker of San Rafael, Calif.; and six grandchildren.
Early last year, in an interview with Forbes magazine, Mr. Drucker was asked if there was anything in his long career that he wished he had done but had not been able to do.
“Yes, quite a few things,” he said. “There are many books I could have written that are better than the ones I actually wrote. My best book would have been “Managing Ignorance,” and I’m very sorry I didn’t write it.”

Herb Kelleher: The Complete Interview

Here’s the best executive interview I’ve read in a long time. It took place back in 2003, but it reminds us why Southwest Airlines has succeeded where so many others have failed.
A few excerpts:
“We’ve never tried to lecture other companies as to how they should behave, what kind of environment they should try to create, because there are a hundred roads to Rome and you can get to Rome by any one of those roads. But our focus has always been on the well-being and the joy that we want our people to experience.
“I just always have felt that people should be natural in their behavior, that they should be able to derive enjoyment from whatever they do. When they derive enjoyment they tend to work together better, they tend to be more productive. One time a ramp agent wrote me, he said, Herb, I’ve caught on to what you’re doing, you’re making work fun – and home is work. Now, I’ve never repeated that to anybody because I thought that wouldn’t make me very popular in certain quarters but he did get it. And you know I don’t think that in order for people to be effective they have to act like automatons.
“We don’t hire a great many people in management positions from other airlines, but we have hired some over the years where we felt that the expertise was required as we grew. And it’s interesting to see their response because they get into the Southwest environment and for awhile they are like a new dog in town, just kind of sniffing around, because they want to see if this is legitimate, whether it’s genuine, whether it’s heartfelt. And after about six months, I would say, you get either one of two reactions: they feel liberated for the first time in their business lives and they say, “Hey, this is for real. I can say what I want to. I can joke. I can be friendly with people.” Or in some cases they say, “This makes me feel very insecure, the fluidity of it is daunting to me. I need a more structured environment than Southwest Airlines has in order for me to be comfortable.”
“one of the things that I want to tell you with respect to a mission statement is that a lot of people hire outside people to prepare their mission statements. My suggestion is that if you need someone outside your company to prepare a mission statement for you, then you really don’t know what your mission is and you probably don’t have one.
“the thing about it is that a group got together and said, We want to define spirit. And I said, I don’t think you want to do that. Because Wordsworth said, “It’s murder to dissect.” And I think it’s murder to dissect to take a concept like that and make it too narrow and make it confining and a strait jacket instead of as expansive as anybody wants it to be. So we’re not going to define it. As long as it’s a positive attitude, that’s the Southwest Airlines spirit. Don’t chain it. Don’t put it in jail.
“we’ve said we’re in the customer service business and we happen to operate an airline. But then any business is about providing great customer service to the people you serve. We just happen to be in one branch of the customer service business. And if you have a great customer service organization it doesn’t matter whether you’re flying people or selling steel or cleaning houses or whatever it might be.
“when we built this building I said give me an interior office because fundamentally bureaucrats scrap over space, which in and of itself I think should be somewhat meaningless, physical space. It’s the space between your ears that should be the important thing. So I did say, I want an office without a window, away from a corner.
Read the complete interview here.
We should all be so lucky to work with a leader like this!

The Green Business Plan Contest

ECOnomics: The Environmental Business Plan Challenge: GE and Dow Jones are looking for great business ideas that combine environmental innovation and profitability, because they truly believe that “green” business represents good business.
So if you’re a university student, an MBA candidate or a confident entrepreneur, submit your business idea and you could win $50,000. If you have an enterprise to help the earth, it’s time to get it off the ground.
Contest begins: Saturday, October 15, 2005 12:01 AM (ET)
Deadline for entries: Thursday, December 15, 2005 11:59 PM (ET)
Open to residents of the 50 United States and the District of Columbia who are 21 years of age or older.
Enter here >>

Trying to Understand the Riots in France

Two articles from BusinessWeek on the trouble in France:
– “Sarkozy Googles as Paris Riots” and
– “The Economics Fueling the French Riots
The articles are written from a “US viewpoint.” A comment left behind the second article is worth noting:
I did not expect BusinessWeek to come out with such a biased article, very pro-American. Very hypocritical as well. France’s social politics is set up to not “leave people behind” and give them an opportunity instead of straight poverty. The only thing that America does offer unemployed youngsters a job in the Army to support their own politics/shake-up/disrespect of Muslim countries; that attitude fuels Muslims worldwide with anger towards all Western societies, including France. The problem isn’t just unemployment but it’s more about France’s ancient “social class differences” and the non-white immigrant population doesn’t like to be called “scum” (a French minister’s outraged response to the first riots). This was written by a white guy from the Netherlands.
Another view from Parapundit: French Muslim Rioting Hits Yet Another High
I’m not sure what to think about all this craziness. The “white guy” in the Netherlands pretends he lives in a color-blind society. The BusinessWeek folk think it’s about unemployment rates. And the french politician is just covering his behind. I should ask Doug Smith.
UPDATE: Economist article