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Some readers may recall Errol Morris’ Oscar-winning 2004 documentary The Fog of War, comprising a long interview with Robert McNamara, Presidents Kennedy and Johnson’s Defense Minister and former CEO of Ford. Always off-screen, Morris simply films and interviews McNamara and brings his words of wisdom to the viewer.

Here are McNamara’s 11 lessons of life. He applies them to his experience in government, specifically to the Cuban Missile Crisis (1962) and the Vietnam War. But they are equally applicable to innovators and entrepreneurs:

THE FOG OF WAR is built around eleven lessons from the life of Robert McNamara.

Lesson #1: Empathize with your enemy.
Lesson #2: Rationality will not save us.
Lesson #3: There’s something beyond one’s self.
Lesson #4: Maximize efficiency.
Lesson #5: Proportionality should be a guideline in war.
Lesson #6: Get the data.
Lesson #7: Belief and seeing are both often wrong.
Lesson #8: Be prepared to reexamine your reasoning.
Lesson #9: In order to do good, you may have to engage in evil.
Lesson #10: Never say never.
Lesson #11: You can’t change human nature.

Empathy is vital – not only with your enemy (competitor) but with your customers. America won the 1968 Tet battle, some 75,000 Vietnamese soldiers died – yet scenes of carnage on US TV catalyzed opposition to the war. In this sense the battle was lost. Failure to empathize with both friends and enemies was fatal.

Rationality is overplayed; people usually behave, if not irrationally, then non-rationally. Try to understand this non-rationality and employ it. Proportionality is important, in business and in war. Using your time and resources in proportion to priority, urgency and potential is important. And basing decisions on real data, especially in product design, is often underplayed. Be skeptical – even what you see may be misleading. Challenge your beliefs constantly; ‘read’ human nature, you probably cannot change it. And, of course, never use the word ‘never,’ because never is never forever.   

What would Google and its ‘do no evil’ say about you may have to do evil to do good? Perhaps, in defending a nation, this may be true; but rarely if ever, in business. 

Arie Rutenberg, former student of mine at Technion, went on to build Israel’s leading advertising agency Kesher Bar-El (now, McCann-Erickson). He has now embarked on a new career. His new venture is called Club 50, founded together with Amnon Herzig, and offers a variety of services to those over 50 who seek to build a second productive life. It already has 150,000 members.

Ruttenberg enlisted Carlo Strenger, Tel Aviv University psychologist, as co-author. Their new book Life Take 2: The Freedom of Midlife will appear soon, and their Harvard Business Review article “The Existential Necessity of Midlife Change” has just been published.  

“Roll up your sleeves,” they advise. “Midlife is your best and last chance to become the real you.”  

We often believe that innovation and entrepreneurship are only for the young. But take, for instance, Shimon Eckhaus. A successful serial entrepreneur, he embarked on his career only after retiring from Rafael (Weapons Development Agency).  He attributes his success to his age. “I did not have time to fail,” he says. So he looked for product ideas that were very practical, met a need and could bring immediate revenue. For him, “Life Take 2” brought adventure and satisfaction.

My friend and co-author D.V.R. Seshadri provides another example – an Indian ophthalmologist, who instead of retiring to a rocking chair, ‘rocked the world’ with a new business design for cataract surgery that restored sight to many many thousands of Indian villagers. Here is the story, in brief, as recounted in Seshadri’s case study:

In 1976, Dr. G Venkatataswamy, popularly known as Dr.V, retired from Government service as Professor of Opthalmology in Rajaji Medical College, Madurai. On retirement, … he returned to Madurai to devote himself to the mission of eradicating preventable blindness among the poor in the immediate geographic area, southern Tamilnadu. He established an 11-bed facility in rented premises – the Aravind Eye Care Clinic, with support from his family members and other well-wishers.  They adopted a model that judiciously combined both business and social orientations – in which one paying patient would subsidize TWO free patients. This has resulted in a SUSTAINABLE organization which generates enough surpluses to fund its own expansion activities, with minimal external monetary support. It has expanded throughout India, became the gold standard of eye care for the poor worldwide, and restored sight to many many thousands of Indian villagers suffering from cataracts. 

What does the success of several Japanese baseball players in America’s Major League Baseball (for instance, Ichiro Suzuki, only major leaguer to have 200 hits or more in his each of his first seven seasons) have to do with innovation?

According to the International Herald Tribune (Monday March 10, p. 17), the answer is: a combination of a creative master coach, American Lou Piniella (former Yankees star and now a manager), and the discipline of Japan’s culture, expressed in its hitting stars.

Japanese batters in America, along with Piniella, have developed an innovative hitting style. They stand closer to the plate, and instead of stepping toward the pitcher when swinging the bat, they step toward first base (when hitting to right field), or toward third base (when hitting to left). In this way, they can hit the ball wherever they wish, almost. This hitting style requires many many hours of practice, and great discipline. The Japanese players have it. It is part of their culture. Together with the innovator who developed the approach, creativity and discipline make a winning combination. Recently Kosuke Fukudome has followed in Suzuki’s footsteps. So has the Yankees’ great hitter Hideki Matsui.

“Japanese players are taught to hit, not to ‘slug’,” Piniella says. He thinks it would be “hard teaching their style to our [American] hitters.”

Perhaps this applies to innovation. Creative ideas are the easy part. Disciplined operational excellence in implementation is the hard part. If only Israeli innovators could be as rule-breaking, creative, and unconventional as Israelis – and as disciplined and methodical as Japanese. If they could, they would hit many more startup ‘home runs.’

Hideki Matsui, hitting in the 2003 World Series

Innovate by designing and selling products specifically to the very poor?

Recall the rather cynical statement that the Lord of the Universe loves the poor, because he made so many of them. Some 1.4 billion people on earth have daily income of less than one dollar, according to the World Bank. How can this possibly be seen as a promising market?

One of the world’s leading management thinkers, C.K. Prahalad (co-author, with Gary Hamel, of the most-read business article, The Core Competency of the Firm) wrote a book in 2005 making the extraordinary claim that the poor can best be helped by market forces. Let companies design and sell them products, he wrote (in Fortune at the Bottom of the Pyramid, Wharton Press), for profit. Do good..and do well. Market forces work far better, he wrote, than do-good institutions, NGO’s or governments. 

How to do this? Among his dozen key principles: 

* focus on quantum reductions in price and cost (e.g. Tata’s new $2,000 car – not exactly for the very poor, but certainly a quantum reduction).
* blend old and new technologies
* scale operations across countries
* redesign products from the outset (e.g. Hindustan Lever’s shampoo that works best in cold water), to work in hostile environments.

Examples? The global Grameen micro-credit bank; India’s e-Choupal project, creating networks of farmers that bypass rapacious middlemen; S.C. Johnson Co.’s partnership with Kenyan slum youth to provide home cleaning and waste disposal services.

Ever looked closely at a U.S. dollar bill? Notice the 13-layer pyramid? In 1932 President F.D. Roosevelt said on the radio, “these unhappy times [Depression] call for the building of plans that rest upon… the forgotten man at the bottom of the economic pyramid.” In 2008, times are perhaps not as unhappy – but are still miserable for the very poor. There are fortunes at the bottom of the pyramid. We just need entrepreneurs with sharp enough vision to see, and develop, them. 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
March 2008
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