« June 2011 | Main | September 2011 »

August 30, 2011

Great Britain, United States - and China

www.mixnerstrategy.com

Great Britain 

Winston Churchill became Prime Minister at a time when his leadership skills were direly needed by the British government. Hitler was about to dominate the continent with a lightning fast warfare that no country had yet been able to hold at bay. In order to survive, someone needed to lead while providing an image of certainty that would inspire the whole country not only to survive, but dominate a clearly superior force intent on winning. Churchill's War Lab could be about all the inventions that flowed from British science during the war years. My first thoughts were that the book would list them all out and work through all the technologies on-by-one. Radar. Aircraft. Ships. Communications. The bomb. Operations research. They all came out of British labs in the early forties. War Lab didn't even try to explain things scientifically. It was all about leadership. Aggression was part of it. If the British were to win, their leaders had to focus on aggressively attacking the Germans. They had to get there first time after time. The first step entailed micromanaging. Churchill had experience in all the facets of governance in Britain. Since, in a way, he knew more, he trusted his intuition and started directing in all sorts of minute and grand ways. How many bombs arrived at such and such a port today? Move them out to the troops. Now. How many troops are available for re-assignment to Northern Africa - today? Move them there. Now. So direction was a big part of it. Maybe even micromanaging. Attracting the best scientists around him was another step. His dinner parties on weekends at his country estate might have the best scientists sitting next to the leading generals, discussing what to do next and how to do it, and, then, doing it Monday morning because Churchill directed it so. He visited the troops, on the front lines repeatedly. He visited the leaders in their capitals repeatedly. Face-to-face was better than a personal letter was better than a typed letter was better than a telegram, although he used all those methods. Amazing story.

America

Jacqueline Kennedy Onassis wasn't an elected leader certainly, in fact her portfolio was limited to the White House and the tasks of being the First Lady. We all know it wasn't so simple. I'd forgotten about all the crowds abroad and in, say, Louisiana, who shouted, "Jackie! Jackie! Jackie!" over and over. But that happened, even early on in the Kennedy years. She re-decorated the White House in a politically tense environment. Big deal, no, not really, when you contrast it to Jack Kennedy facing down the Russians over Cuba. The tone, however, showed through. This is an important place. Important things happen here. It deserves respect. Lastly, we forget about Jackie's last years in the publishing world. She obviously could have just sat back and waited for people to come to her, or, more likely, lived behind a wall. She didn't. She used all her contacts, all her skills, to bring some seventy or more books to market, some of them best sellers from the best authors. She used her rolodex, yes. She also used her sense of style and all her learning to make sure the books she chose to support were the right books, that they were well written, obviously, and more, that they were presented as art pieces in themselves, something easily forgotten. Quite a lady.

China

Now, a new face, Jianying Zha. Lucky enough to get into Peking University shortly after the Cultural Revolution ended in China, she could have taken a nice job somewhere in China and lived an easier life. She chose instead to come to America for more schooling, to South Carolina of all places, and then on to New York City. We're lucky she was here. Bright. Focused. Open. Lots of adjectives apply. One of them, the ability to listen, if probably very important, as is her skill at forcing what she hears onto the printed page. She ended up with best sellers in Chinese for the Chinese market, and, hopefully, with best sellers in English for our markets. She doesn't interview folks we've heard of before. A retailer who grows a market, and then sells at the opportune time. A printer who comes to America for a start but who returns home to challenges the publishing world at home to allow things that might not have happened before. Two of the biggest real estate developers in China today who got their start with aggression on a small scale, and who then had the nerve to grow things into the big scale using not only business skills, but artistic ones, as well. Finally, Zha takes through the politics of the Chinese University as it figures out how to become not only big, but world class. The first step? Admit, basically, that being big doesn't necessarily mean world class, and that, yes, there are wonderful scholars in China while at the same time recruiting competitively around the world. We've seen all this before. China is reliving the process now, but at a pace unseen before.

References

Downing, Taylor. Churchill's War Lab. Code-breakers, scientists, and the mavericks Churchill led to victory. The Overlook Press. 2011.  

Flaherty, Tina Santi. What Jackie Taught Us. Lessons from the remarkable life of Jacqueline Kennedy Onassis. Perigee. 2004.

Zha, Jianying. Tide Players. The movers and shakers of a rising China. The New Press. 2011.

August 28, 2011

On My Desk

www.mixnerstrategy.com

References

Anderson, Chris. Free. The future of a radical price. Hyperion. 2009.

Bauby, Jean-Dominique. The Diving Bell and the Butterfly. A Memoir of Life in Death. Vintage Books. 1998.

Brooks, David. The Social Animal. The hidden sources of love, character, and achievement. Random House. 2011.

Buckingham, Marcus. Standout. The Groundbreaking New Strengths Assessment from the Leader of the Strengths Revolution. Thomas Nelson. 2011.

Bush, George W. Decision Points. Crown Publishers. 2010.

Churchill, Winston S. Never Give In! The Best of Churchill's Speeches. Hyperion. 2003.

Daughn, George C. 1812. The Navy's War. Basic Books. 2011. 

Di Silvestro, Roger L. Theodore Roosevelt in the Badlands. A young politician's quest for recovery in the American west. Walker & Company. 2011.

A definitive account of Roosevelt's time in the west as rancher, cowboy, conservationist and adventurer. Always sickly, Roosevelt used physical challenges to regain his health after his wife's and his mother's deaths. Over time, he probably didn't make much money at ranching. The health and vigor he regained, however, helped him regain elective office as Vice President and then President after McKinley's assassination. In a way, the stories related in Di Silvestro's book make for better reading than a cheap cowboy novel, as they're true - and, sometimes, sad. Arriving in the west just after the demise of the buffalo, Roosevelt killed way too much game, more than he could ever eat. He took the racks on the best examples, and maybe a prime cut of meat, and left the rest. That was life on the range in the 1880s.

Downing, Taylor. Churchill's War Lab. Code-breakers, scientists, and the mavericks Churchill let to victory. The Overlook Press. 2011.  

Felton, Eric. Loyalty. A Vexing Virtue. Simon & Schuster. 2011.

Ferling, John. Independence. The struggle to set America free. Bloomsbury Press. 2011.

Those of us who write a bit are always hoping to effect people by what we write. The one pamphlet that in fact effected the future course of America was Thomas Paine's Common Sense. The King has just said he meant to punish the colonies for their actions (Ferling, 217). Paine made it clear that reconciliation was not in the cards. His pamphlet changed history.

Flaherty, Tina Santi. What Jackie Taught Us. Lessons from the remarkable life of Jacqueline Kennedy Onassis. Perigee. 2004.

Gaddis, John Lewis. George F. Kennan. An American Life. The Penguin Press. 2011.

Gawande, Atul. The Checklist Manifesto. How to get things right. Metropolitan Books. 2009.

Gill, Michael Gates. How Starbucks Saved My Life. A son of privilege learns to line like everyone else. Gotham Books. 2007.

Grant, U. S. Personal Memoirs of U. S. Grant. Konecky & Konecky. 1886. 

Hill, Linda A. and Kent Lineback. Being the Boss. The 3 imperatives for becoming a great leader. Harvard Business Review Press. 2011.

Humes, Edward. Force of Nature. The unlikely story of Wal-Mart's green revolution. Harper Business. 2011.

Jones, Steve. The Darwin Archipelago. Yale University Press. 2011.

Lewis, Michael. Moneyball. The Art of Winning an Unfair Game. W. W. Norton & Company. 2004.

Levine, Robert. Free Ride. How digitial parasites are destroying the culture business, and how the culture business can fight back. Doubleday. 2011.

Levinson, Marc. The Great A&P and the Strugle for Small Business in America. Hill and Wang. 2011.

Lohr, Steve. Reaping the Rewards of Risk-taking. New York Times. 27 August 2011. http://www.nytimes.com/2011/08/28/technology/steve-jobs-and-the-rewards-of-risk-taking.html?hpw

Lowenstein, Roger. The Nixon Shock. Bloomberg Businessweek. 8-14 August 2011. 74-78. http://www.businessweek.com/magazine/the-nixon-shock-08042011.html

Mackay, Harvey. The Mackay MBA of Selling in the Real World. Portfolio / Penguin. 2011. 

Mandal, Jay. LawPivot. A Q&A website that matches cash-sensitive startups with the lawyers who might be able to help them.  https://www.lawpivot.com/

Marcello, Simonetta and Norga Arikha. Napoleon and the Rebel. A Story of Brotherhood, Passion, and Power. Palgrave Macmillan. 2011.

Meyers, Christopher C. Junion General John A. McClernand and the Politics of Command. McFarland & Company, Inc. Publishers. 2010.

Morrell, Margot. Reagan's Journey. Lessons from a remarkable career. Threshold Editions. 2011.

O'Brian, Patrick. Master and Commander.  W. W. Norton & Company. 1970.

Ranadive, Vivek and Kevin Maney. The Two-Second Advantage. How we succeed by anticipating the future-just enough. Crown Business. 2011.

Ries, Eric. The Lean Start-up. 2011. http://theleanstartup.com/

Sorkin, Michael. All Over the Map. Writing on Buildings and Cities. Verso. 2011.

Stalk, George Jr. and Thomas M. Hout. Competing Against Time. How time-based competition is reshaping global markets. The Free Press. 1990.

Taleb, Nassim Nicholas. The Black Swan. The Impact of the Highly Improbable. Random House. 2007.

Thomas, Hugh. The Golden Empire. Spain, Charles V, and the Creation of America. Random House. 2010.

Trout, Jack, with Steve Rivkin. The Power of Simplicity.  McGraw-Hill. 1999.

Watts, Duncan J. Everything is Obvious*. *Once you know the answer. Crown Business. 2011.

Watts makes a case that wasn't obvious at first: things are never as simple as they seem. Quants of all sorts have always been convinced that analysis of problems will yield simple - and quick - results. He

Wills, Garry. Verdi's Shakespeare. Men of the Theatre. Viking. 2011.  

Zha, Jianying. Tide Players. The movers and shakers of a rising China. The New Press. 2011.

August 26, 2011

Bottom of the Pyramid Lessons

www.mixnerstrategy.com

Banerjee and Duflo recognize five lessons from their extensive research about the realities of being poor (Banerjee, 268-271):

  1. The poor often lack critical pieces of information and believe things that are not true.
  2. The poor have responsibility for too many aspects of their lives.
  3. There are good reasons that some markets are missing for the poor.
  4. Poor countries are not doomed because they are poor.
  5. It is possible to change governance and policy without changing the existing social and politcal structures.

Let a farmer know where the best market his, and what a reasonable price is, and he will modify his farming habits to take advantage of this new information. The poor have to worry about all aspects of their lives, to be experts at too many things, from health to nutrition to education for their kids, to markets, to politics. It is over-whelming. Making sure public nurses actually show up for work at the local infirmary makes a difference. Poor countries, by focusing on crucial first steps, are able to extricate themselves from poverty. It might be a health step, like immunization or figuring out whether you need to charge for a mosquito net, or whether, if you give it away, folks will use it more. A role for aid exists - beyond the normal supply of grain based food. Infrastructure particular to a specific community my work better. Help farmers get their produce to market, or create a market for their produce. Governance is important to long-term growth. Methods exist to right long histories of wrongs. Again, focus on a crucial few strategies makes sense. Alleviating corruption, if only in one part of interaction with the government, makes a difference. Just steps to provide legal identification might be enough to enfranchise a whole population.

Seemingly simple steps to get the ball rolling.

Reference

Banerjee, Abhijit V. and Ester Duflo. Poor Economics. A Radical Rethinking of the Way to Fight Global Poverty. PublicAffairs. 2011.

Machiavelli's Sensibilities

www.mixnerstrategy.com

Here's Erasmus in 1516, writing to Charles I of Spain, soon to be Holy Roman emperor Charles V (Unger, 221, quoting Erasmus's Education of a Christian Prince, 1516):

Wisdom is not only an extraordinary attribute in itself, Charles, most bountiful of princes, but according to Aristotle no form of wisdom is greater than that which teaches a prince how to rule beneficently.

Machiavelli, conceiving of a world "filled with violence, subject to sudden, inexplicable transformations" (Unger, 223-224), says "All human affairs are in a state of flux," forcing the prince to continually adjust" his actions. Unger goes on (Unger, 224):

To Thomas Aquinas, who wrote in his Commentary on Politics "No one can be called a good prince unless he is good in the moral virtues and prudent," Machiavell might well have responded: No one can be considered a good prince, or any prince at all, who loses his kingdom through a foolish adherence to such platitutes. The very notion of a fixed morality is preposterous in a lawless world.

Unger understands that Machiavelli has just left thirteen years of dealing with esentially ruthless, successful leaders. Erasmus and he take two points of view. One says do the right thing. Always. The other says do what gets you the result you need. Always.  It may be that Erasmus is correct. Machiavelli's suggestions, however, probably will get you the results you need. Two different things.

Reference

Unger, Miles J. Machiavelli. A Biography. Simon & Schuster. 2011.

August 17, 2011

Water Strategy

www.mixnerstrategy.com

In 1976, Orange County installed the first reverse osmosis treatment plant to purify household wastewater to drinking-water standards (Prud'Homme, 109). That means it had to convince the populace that this was a good idea. They were, after all, early adopters of a new technology. There was a very specific need, not drinking water, but water to stop the migration of salt water into the very plentiful (but receding) Orange County aquifer. That story, told repeatedly, became the basis for a very strategic adoption of treated sewer water into the Orange County drinking water system. Even today, the treated water is still injected into the ground, but now it has a different use. Transported inland more than ten miles, the water is injected into the aquifer, the same aquifer from which many Orange County communities pump their drinking water. An interesting thing happened. The mainstream populace didn't object to what was going on. The water didn't hurt anyone when it was used as a salt water barrier. Therefore, we all assumed, it wouldn't hurt anyone when it flowed through the aquifer to local pumps. It'll be a while, I predict, before we are ready to accept the treated water flowing straight from the treatment facility into the drinking water system. It's pure and healthy. The adoption cycle will take some more time before everyone accepts that purity. We're no longer as squeamish as we once were. We do, however, have a way to go before we totally accept this new technology in Orange County.

Interesting side note: other communities are still having this battle, some of them not so far away from Orange County. Their alternative strategies work just as well as Orange County's - they just cost a whole lot more in money, and resources.

Reference

Prud'Homme, Alex. The Ripple Effect. The fate of freshwate in the twenty-first century. Scribner. 2011.

Maximizing Moore

www.mixnerstrategy.com

Moore's first book,  Crossing the Chasm, is easily prescriptive in that it had one message:

  • there is a continuum of technology adoption spread consecutively from innovators, early adopters, early majority, late majority and laggards that is dichotymous in that innovators act differently than early adopters, and that
  • early adopters are separated in their buying behavior from the early majority by specific buying traits, like willingness to take risks on products and technologies that don't have clearly defined reasons to buy the product, not just that it is a cool new product.

Moore's Dealing With Darwin addresses all the other strategies that Chasm ignores. Not only is there a single way to cross the chasm (identify a single specific order-of-magnitude leap in benefits), there are multiple other strategies that address other chasm-like challenges at each stage, not in the technology adoption cycle, but in the corporate life cycle. Early stage firms need to worry about crossing the chasm, yes. Later stage firms (already rapidly growing, or, horrors, in decline) have a whole series of other strategies they could address. Recognizing that they have an opportunity to choose a good strategy is the first step. Choosing a strategy - and here things get good - actually adopting it, is the second step.

Chasm addresses a specific need for early stage companies that need to make it past the innovators and early adopters in their market place. Darwin has a whole other group of strategies to choose from when growth has begun and for each of the other stages that succeed growth.

Organizing your company to take advantage of specific strategies makes sense as profits increase, and, in fact, odds of survival of the firm increase, as well.

Two examples:

Researchers at Cornel University (Economist) are using CAT scans of fabric to help software engineer better looking textures for animated movies. If a company is formed around this technology, it'll need not only a patent or copyright on the algorithm, but a complete business plan that makes the case that there is something here for the general marketplace, that, essentially, this is more than a button on existing software, and that there is enough here for a company addressing not just the early adopters, but the main market.

Alternatively, a mainstream company, Intel, is hiring sci-fi writers (King) to help it come up with unthought-of new ways to package technology. Intel certainly isn't early stage. It's using a new way of looking at its current product lines to figure out how to, for instance, pack more transistors on a chip, or, perhaps, figure how to to make a chip with fewer transistors that is just a good as the old chip. The sci-fi writers dream up things that have been done before (in a sci-fi novel, perhaps) and suggest its applicability to current thinking. Intel is far beyond the early growth stages. It is, however, considering how to revamp what it is doing, to sell more of the next iteration of its current products, or, maybe, create new simpler products, that just happen to use fewer transistors. This is probably more of an enhancement innovation (Moore, Darwin, 62) from Intel's point of view, not a disruptive innovation an early stage company might use.

References

Fabricating Fabric. Economist. 13 August 2011. 76.

King, Ian. To Boldly Go Where No Chip Has Gone Before. Bloomberg Businessweek. 15-28 August 2011. 38.

Moore, Geoffrey A. Crossing the Chasm. Marketing and selling high-tech product to mainstream customers. HarperBusiness. 1991. (Soft-back edition, 1995.)

Moore, Geoffrey A. Dealing With Darwin. How great companies innovate at every phase of their evolution. Portfolio. 2005.

August 07, 2011

The Opportunity That Is China

www.mixnerstrategy.com

An interpretation in the New York Times (Barboza) of the Chinese announcement taking the U.S. to task for its "addiction to debts" says that, in a way, because other alternative bond sources don't really exist, the Chinese are stuck with investing in U.S. treasuries. Having financed the import boom in America, the Chinese are watching anxiously as U.S. bonds are down-graded.

Kissinger, while not responding to current events in On China, makes a different case, namely, that the U.S. and China have a forty-year-old opportunity to grow closer. While initially, what with Korea and to a lesser extent, Viet Nam, China seemed an aggressor uninterested in engaging the U.S., it has had the opportunity since ping pong diplomacy and the Nixon visit to re-consider our relations, and has, basically, constructively engaged in a non-adversarial relationship while making the decision to grow economically in an environment where it needed to learn a lot in order to catch up. The key is that during the eighties and early nineties, China engaged and grew, admitting and acting upon needs which Mao et al never would have admitted. The inner-looking China looked outside for guidance and training, and leveraged the energy and creativity of its populace to grow more quickly than the world had ever seen before.

So, we have two points of view. The Chinese announcement that the U.S. had better get its house in order, and Kissinger's longer view that China and the U.S. have an opportunity to "not shake the world, but build it" (Kissinger, 530). Yes, the U.S. needs to get its house in order. However, it can do that most constructively (if we buy Kissinger's analysis) by working with China for a better world, not in opposition to it.

Stepping back a bit, some interesting things are happening to the Sino-American relationship. Many of Apple Computer's hugely successful products are manufactured in China, some by Foxconn, a Chinese company of interest lately because of suicides in its workforce, and, alternatively, its rapid growth. Last week, Foxconn made an announcement (The Economist, 58) that it was going to "hire" one million robots to replace parts of its workforce. This is a good thing for productivity and, perhaps, a bad thing because almost necessarily, prices will rise. Apple and Foxconn obviously care. But so should we. Rising costs signal an opportunity for U.S. companies to bring tech manufacturing out from China, perhaps all the way to the U.S.

The Chinese relationship is a sympathetic one. The best course is for the U.S. and China to continue down the path of mutual understanding (maybe an improperly used Cold War term), respect, and dialog recognizing the fact that unless the U.S. and China continue to work together, both will ruin a strong opportunity.

Reference

Barboza, David. China Tells U.S. It Must 'Cure Its Addiction to Debt'. New York Times. 6 Aug 2011. http://www.nytimes.com/2011/08/07/business/global/china-a-big-creditor-says-us-has-only-itself-to-blame.html?src=me&ref=business

Kissinger, Henry. On China. The Penguin Press. 2011.

Economist. Robots Don't Complain. 6 August 2011. 58.

August 01, 2011

Bottom of the Pyramid - Profits Before Gifts

www.mixnerstrategy.com

Prahalad's now classic book on economic development strategy in India is well-known. It details a whole series of steps to take to help folks at the bottom of the pyramid help themselves up. Then it gives successful case studies from around the world that show that people, given tools and incentives, are very happy to help themselves succeed. Here are some words on governance that are applicable lots of places (Prahalad, 98):

The Bank of Madura initiated a model of village development in southern India that has shown great promise. It was based on three assumptions:

  1. Microsavings must precede microlending. Bottom of the Pyramid (BOP) consumers must learn to save, and there were no institutions to support microsavings.
  2. BOP consumers must start trusting themselves. They must be actively involved in solving their problems. Outside help (financial and other) can go only so far. The village must break its cycle of dependency built by more than 40 years of subsidies and government handouts, NGO interventions, and the like. Private-sector development (in this case, banking based on commercial principles) and subsidies do not mix.
  3. There is no dearth of latent leaders in the villages. Given the opportunity, they will emerge and will influence the start of a transparent and commercially viable system. This group will then become the custodians of transaction governance instead of lawyers or the local slum lords.

 Since Orange County is a medical device haven, I was enticed by the story of Jaipur Foot (Prahalad, 275). We have at least on major prosthetic manufacturer in town. Their devices cost thousands of dollars and are, indeed, wonderful. Jaipur Foot's devices are themselves wonderful. Wonder comes not only from their many satisfied customers who appear at the Jaipur Foot infirmary to leave, only days later (if not the next day) with a new foot. Wonder comes also from the price. Early on, Jaipur provided durable and very useful limbs for thirty dollars or so. The Orange County manufacturer's costs are significantly higher, being somewhere more than $8 thousand all the way up to $30 thousand. I'm not even going to do the math. This is wonderment.

When you take the time to consider the needs of your customer, to put them first, there are solutions that remain a wonder long after the sale. Prahalad's book is chock full of them.

Reference

Prahalad, C. K. The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Pearson Education. 2010.

Treasures in Reagan's Desk

www.mixnerstrategy.com

When a president and his family move out of the White House, things move pretty quickly. While the old president accompanies the new president to the inauguration, one set of possessions is replaced by another - in record time. Reagan's desk in the Oval Office was emptied into a box and labeled "RR's desk" (Reagan, xiii). It wasn't seen until years later - maybe twenty years later - when the Reagan library was redecorating and folks decided to look at what was in storage. Behold. The box. This wasn't just any box, it was a hand written archive of Reagan's thoughts, quotes, anecdotes and jokes, all in Reagan's own handwriting, each written on its own card. Take a stack of cards and, if you have Reagan's skill at talking to people, you have a ready made speech. The stack of cards? Well, it came from years of speeches, some of them probably back in Hollywood, some of them from the General Electric speechifying days, and, some of them from Reagan's campaigns and offices in California and in the White House. A speech writer would make up a speech. Reagan would fix it up with a proven one liner (or maybe a bit longer) from his trove of quotes and stories and jokes.

Here are three of them:

  • Greatness is measured by your kindness, your ed. & intellect. By your modesty. Your ignorance is betrayed by your suspicions & prejudices-your real caliber is measure by the consideration and thoughtfulness you have for others (Reagan, 142).
  • A state which dwarfs its men in order that they may be more docile instruments in its hands-even for beneficial purposes-will find that with small men no great thing can really be accomplished (Reagan, 36).
  • There are 3 kinds of lies: lies, d--m lies, & statistics (Reagan, 189).

The Reagan Foundation ended up owning the collection of cards. They've put out a book. Somehow, the cards need a better place. The book is nice. The cards are nice. They need to have a larger place in American history. My bet is that, ultimately, they will.

Reference

Reagan, Ronald. Edited by Douglas Brinkley. The Notes. Ronald Reagan's Private Collection of Stories and Wisdom. Harper. 2011.