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November 29, 2007

New Books This Month

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These readings are basically about political history from all sorts of points of view. The 600s

"Why were the Arab conquests so swift and far reaching - and permanent? ( Kennedy. 366.)" 

  • Declining population - "demographic decline" -as a result of Bubonic plague in the region. That the booty of war included many human captives supports this, along with the speed of success in Iran and on the Iberian peninsula.
  • Earlier battles and wars between the Romans and the Iranian empires were far reaching and destructive. The decline of the Babylonian Empire was a symptom of this, along with the weakening control of local religions it precipitated. The strength of these older Empires was also a weakness in that the defense of the Empire relied not on local peoples but on armies raised elsewhere. Government was more "sophisticated" (Kennedy, 369).
  • The strength of the older empires the Arabs supplanted was a weakness in that the local populations were will to support the Arab conquests as they were, perhaps, the lesser of two evils from the locals point of view.
  • While it might not be said that the Arabs were benevolent rulers, local opposition did not instantly spring up in defiance.
  • Martyrdom and paradise were incentives for the Arabs in battle in ways never seen before.
  • This wasn't migration. It was war by an invading army. Households joined the armies only after military success.
  • Mobility played a role. The Arab armies moved literally astonishing distances. The Muslim world stretched 7,000 kilometers; the Roman world stretched 5,000 kilometers.
  • Leadership played a crucial role. Hereditary posts and the ability of designated leaders contributed.
  • Strong direction from afar, namely Medina and, later, Damascus, were important.
  • Finally, one key point. While armies were conquered, absolutely, terms for governing the newly conquered were comparatively easy.

The 1940s

Jackie Robinson led the way toward integration of major league baseball. That's an old story. In other places, we've made the point that success isn't about experience or training, although both are important. Success is about talent. Robinson had the talent to keep his mouth shut while competing fiercely at the same time. His talents helped a whole lot of other players succeed, as well.

The 2000s

Since we're telling sports stories, how about this one: Jimmy Carter raised $175,000 for The Carter Center by selling a baseball signed by Fidel Castro and himself. The ball was the first pitch in a Cuban baseball game attended by Castro and Carter during discussions addressing freedom of expression and association, amnesty for political prisoners, right of private enterprise, direct election of public officials, and general elections. 

On his return to the US, Carter presented his findings to congressional leaders, George W. Bush and Condoleezza Rice. Almost immediately of Carter's meetings with senior leaders restraints against Cuba were increased (Carter, 88).

2006

Golf is always about individual stories. Take all the stories together and you have a book like no other. The Scorecard Never Lies reads almost like a diary with the weakness of lack of focus, and the strength of focus on individual performance, constant training - and luck.

Tiger stories are what we all look forward to today so here's one: Tiger cried for the first time in public after winning the 2006 British Open, the first Open his father hadn't attended with him. A sad time (Lewis, 258).

References

Carter, Jimmy. Beyond the White House. Waging Peace, Fighting Disease, Building Hope. Simon & Schuster. 2007 

Eig, Jonathan. Opening Day. The Story of Jackie Robinson's First Season. Simon & Schuster. 2007. 

Kennedy, Hugh. The Great Arab Conquests. How the Spread of Islam Changed the World We Live In. Da Capo Press. 2007.

Lewis, Chris. The Scorecard Always Lies. A Year Behind the Scenes on the PGA Tour. Free Press. 2007.

 

Winning at Innovation

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The fifties and sixties saw the disk drive companies continue to innovate to increase the utility of their storage devices for the main frame business. This was sustainable innovation. The flaw? Incremental changes made to existing products allowed them to miss out on new innovations on the periphery of their product lines.

The seventies and eighties showed the problems in the disk drive business which still focused on main frame computers. Taking off-the-shelf technology and repackaging it in new ways allowed new, small companies to address the needs of the personal computing industry with smaller, more easily packaged disk drives. The drives were less efficient, yes, but they addressed the needs of personal computer size - and price - requirements nicely. These were disruptive technologies. The disruptive companies ended up owning the business (Christensen).

It would be easy to preach that innovating for a disruptive technology is the only way to succeed and that sustainable innovation is the way to lose out over time. That sermon would miss out on other ways to grow, however, ways that large companies (normally tagged with the sustainable innovation moniker, not that of disruptive innovators) are best advised to address.

Cross-boundary, disruptive innovation does things differently. A big company eyes a possible new application for its capabilities. Apple jumps into music, for instance, and succeeds in ways that traditional players didn't. WalMart enters healthcare with their with their low cost doctor's offices in local stores a radical change for the heath care - and retail - environments. GE has a huge opportunity to enter the automotive marketplace with an electric automobile because of its skills in batteries and energy from atypical sources (Grove).

Incremental changes on your existing product line? You're probably innovating sustainably. Big companies do all right at this.

Disruptive, incremental changes on an existing product - into a new marketplace? You're probably innovating disruptively. Start-ups do a better job here.

Got skills and innovations applicable in a new marketplace that no one is properly addressing? Cross boundary disruptions by an big company into a new market make more sense. GE's deep pockets make a foray into the hugely regulated automotive marketplace sensible says Grove. A start-up disruptively addressing the market will have a harder time.

Microsoft and Intel have continually upgraded their offerings, lately in a sustainable manner. Negroponte at MIT pointed out the need for a low cost computer for third world applications, He designed it, sought funding, and went to market. What had been seen as a huge opportunity for a startup has in fact ended up being an opportunity for the sustainable Microsofts and Intels of the world to act disruptively by introducing a low cost alternative as well, if only to protect themselves (Stecklow).

The theory says that the big companies should fail and that Negroponte's One Laptop Per Child program should succeed. My suspicion is that there is another alternative: a company outside the normal technology realms, but with large ties to the Third World, will win at this battle by wrapping its contacts and marketing prowess with someone else's technology to sell a lot of cheap computers. The beauty of all this is that we get to wait and see.

Andy Grove says GE has an opportunity in electric cars. It looks like someone else has an opportunity in cheap laptops.

What are the opportunities for your expertise in other industries?

References

Christensen, Clayton M. The Innovator's Dilemma. When New Technologies Cause Great Firms to Fall. Harvard Business School Press. 1997. [Chapter One. How Can Great Firms Fail? Insight from the Hard Disk Drive Industry. http://www.businessweek.com/chapter/christensen.htm ].

Grove, Andy. Think Disruptive. Portfolio magazine. December 2007. http://www.portfolio.com/views/columns/2007/11/15/Innovation-At-Big-Companies

Stecklow, Steve and James Bandler. A Little Laptop With Big Ambitions: How a Computer for the Poor Got Stomped by Tech Giants. Wall Street Journal. 24-25 November 2007. A1. http://online.wsj.com/public/article/SB119586754115002717.html

November 28, 2007

Strategy By the Numbers

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Booz Allen keeps records on the status of companies asking for consulting services on strategy (Wheeler, 4):

  • 15 percent are truly in need of change.
  • 60 percent are in a state of inconsistency (of say six major initiatives, a couple aren't working).
  • 15 percent are doing well, but leaders want new challenges.
  • 10 percent are recovering from a "poorly designed full-scale transformation". 

In summary, four adjectives: "crisis, inconsistency, complacency, or exhaustion." Any of them sound familiar?

Maybe your company is just fine. Odds are, however, you've got issues.

Reference

Wheeler, Steven, Walter McFarland, and Art Kleiner. A Blueprint for Strategic Leadership. strategy+business. Winter 2007.  http://www.strategy-business.com/press/article/07405?gko=0a739-1876-26510307

November 19, 2007

Tough CEOs Finish First

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The list of adjectives for successful CEOs is straight forward.

Persistence, attention to detail, efficiency, analytical skills, hiring Grade A players, and setting high standards trump strong oral communications, teamwork, flexibility/adaptability, enthusiasm and listening skill as skills most likely attributed to successful CEOs (Anders).

Hiring a new CEO in the near term, especially at a private firm? Harder traits seem to score higher than soft skills.

Reference

Anders, George. Tough CEOs Often Most Successful, a Study Finds. Wall Street Journal. 19 November 2007. B3.

November 15, 2007

Is It Objectives First, Or Opportunitites?

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Maybe this fits the bill for "cutting edge" strategy:

New data (Duggan) says that setting objectives and doing whatever it takes to reach them might not be as useful a strategy as spending quite a lot of time on an opportunity scan and then picking the opportunities that have "large pay-offs" (Easterly).

We've said all along that opportunities are the hardest to find, and the most important part of strategic planning. Now more evidence supports that statement. Maybe even cutting edge evidence.

References

Duggan, William. Strategic Intuition. Columbia Business School. 2007.

Easterly, William. Surprised by Opportunity. Wall Street Journal. 14 November 2007. D16.

November 04, 2007

Scholarships for Football - or Academics?

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Chapman had a choice. It could keep Division I/II football and its requirements for athlete scholarships, or it could increase the number of scholarships for academics (Chambers). Chapman's President Jim Doti chose to increase the academic performance of the University by awarding academic scholarships and moving the football program to Division III which doesn't award athletic scholarships.

Pretty good move. SAT scores have increased from 997 in 1991 to 1219 today. The University is rated tops in the nation according to Doti's comments at their recent economic forecast.

Chapman was the first accredited four year university in Orange County. Looks to me like it is still a credit to us all.

Reference

Chambers, Bruce. Chapman ascends in stature. Led by mountain-climbing President Jim Doti, the little college that could has made dramatic strides over the decades. OC Register. 4 November 2007. http://www.ocregister.com/news/doti-chapman-college-1915381-school-campus#

November 03, 2007

She Founded Iraq

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Iraq is proving an interesting challenge to the US, no matter what your politics. We don't give much thought to it, but the origins of Iraq give some insight into today's problems.

After WW I, the Armistice process led to the division of territories that until that time really weren't nations. They had been ruled more locally by local Sheiks and tribes. Iraq was such a case. The British ended up with the region under its sphere of influence during a time when the Empire was expiring. Britain didn't have enough wealth - or perhaps enough initiative - after the war to help pick up the regional economy. They were in charge, but didn't know really what to do.

Enter a "relic" of the Victorian age, a single heiress very interested in archeology and politics in a region teeming with both, Gertrude Bell. Young, energetic, trained at travel in primitive areas, politics, archeology, aware, intimately, with the vagaries of war and survivorship, and friendly with most of the leaders in the Middle East because of her remote desert travels, Bell was the perfect go-between to suggest a future direction for the Iraqi government and society.

Her ultimate contribution was the hand-off of Empire to King Faisal.

So what's the point?

Bell taught herself. She used family contacts, training not normally reserved for women, and tenacity to acquire the knowledge needed to foster growth of societies (read that governments) in the Middle East when before there were none.

Some of your best employees ultimately may come from this college of self-knowledge, tenacity and willingness to give with nothing offered in return.

Be patient when you meet such a person. They may help you grow your organization in ways you hadn't expected.

Reference

Howell, Georgina. Gertrude Bell. Queen of the Desert, Shaper of Nations. Ferrar, Straus and Giroux. 2007.

Churchill Ascends to Prime Minister

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Emboldened by the success of appeasement, Chamberlain held on the Prime Minister-ship long beyond his effectiveness. Churchill knew he was the best replacement, but he wouldn't do anything to upset the government. That was left to a group of young Turks who gave voice to the people and slowly upset the government in favor of Churchill. The best speech in Parliament was by Leo Amery. He quoted Cromwell (Olson, 294):

"This is what Cromwell said to the Long Parliament when he thought is was no longer fit to conduct the affairs of the nation: 

'You have sat too long here for any good you have been doing! Depart, I say, and let us have done with you!

In the name of God, go!'"

Everyone in Parliament knew he was right.

Chamberlain's government fell. Churchill became Prime Minister and began the long mobilization which led to winning the war.

Reference

Olson, Lynne. Troublesome Young Men. The Rebels Who Brought Churchill to Power and Helped Save England. Ferrar, Straus and Giroux. 2007.

Got Scoreboard, Will Grow

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Training employees makes sense, sometimes, especially when you know what to teach them. So, what do you teach them?

Macromedia, a software company in San Francisco, posts in its lobby a scoreboard with this information (Case, Open Book Management, 68):

  • Service revenue vs. plan
  • Revenues for every product line
  • Total revenue vs. plan
  • International revenue vs. plan
  • Products shipped to original schedule
  • Accuracy of product delivery dates
  • Marketing-driven calls per month
  • Departmental expenses
  • Annualized revenue per employee. 

So what do you train employees on? How about teaching them what each of the words above actually means and how to derive them from their own work.

Hire for specific talents like closing the sale.

Train on key attributes that will help your employees know where they - and the company - stand in terms of goals, all the time.

References

Case, John. Open Book Management. The Coming Business Revolution. HarperBusiness. 1995

Case John. The Open-Book Experience. Lessons from Over 100 Companies Who Successfully Transformed Themselves. Addison-Wesley. 1998.

Space Strategy

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Von Braun's talents were special. Involved in rocketry since the twenties, he migrated from private clubs, to clubs sponsored by the military (the army in Germany was supportive, as at that time, rockets were classified as munitions much like artillery), to helping the military design new rockets, and then, finally, to rocket manufacturing for the German government during WW II. This latter experience was controversial as it included slave labor to produce the rockets Germany used against the West.

Special talents?

Besides pretty good engineering skills (Einstein was helping him check his math while he was still in college [Neufeld, 45]), it ended up that Von Braun had two unique talents, one for managing large manufacturing projects and the other an intense personal interest in selling rocketry to the public.

Von Braun's management focused on three key attributes for success (Neufeld, 302):

  • Teamwork, meaning getting diverse in-house laboratories and contractors working on a team,
  • Dirty-hands engineering, meaning, basically, that managers didn't just push paper, they stayed close to the hardware and knew what was working, and what wasn't,
  • Automatic responsibility, meaning if you or your department made something, you stood behind your work both when it worked and when it didn't.

First in Germany and then later in Texas and Huntsville, Alabama, Von Braun excelled at keeping teams busy and focused on their tasks. From a bureaucratic point of view, over time, he also excelled at the big science game. He kept his large engineering team together through the vagaries of federal funding cycles.

What's the message from all this?

Early on, Von Braun excelled at technology. Later on, he grew the ability to manage large projects and to keep them funded. His team ended up being better at the technology than he was.

Sort of like a tech CEO, wouldn't you say?

Reference

Neufeld, Michael J. Von Braun. Dreamer of Space, Engineer of War. Alfred A. Knopf. 2007.