You are currently browsing the monthly archive for February 2009.

In writer F. Scott Fitzgerald’s remarkable short story collection, Tales of the Jazz Age, there is a modest little story that doesn’t seem to fit with the rest. Its title: “The Curious Case of Benjamin Button.” In it Fitzgerald tells of a person who is born an old man, then gets younger as the years pass, finally becoming a tiny baby and disappearing. The recent movie based on it won three Academy Awards, including visual effects, art direction and makeup. Producers worked on the film for 18 years before finally completing it. It has been a box office flop in America but leads foreign box office revenues. 

button

At a very personal level, this movie means much to me. I took early retirement from my university at the age of 61.   I then began a new career, working with managers and companies. That new career gave me many insights into how best to do executive development, as an educator.  

I wish I were Benjamin Button. I wish I could now go back and apply that knowledge, in my university. It is a bitter paradox that we gain wisdom through life, and just when it peaks, as pensioners we are probably unable to apply it — and then the wisdom, most of it tacit, disappears together with us, is never transferred to others and is thus lost forever.

One of the great innovations we need today is a “Benjamin Button button.” Press a button, and the wisdom of older people is digitized, captured, organized and transferred to others. As this happens, the persons imparting the wisdom become younger.

On second thought — such an invention exists. It is called a digital recorder. 

I urge my fellow golden-agers to find ways to capture and impart what they have learned. It will make you younger, in spirit if not in years. 

Can someone build a website that might facilitate a Benjamin Button process?

Advertisements

 Who invented GDP?  

Like many powerful management tools, the idea to compile data on a nation’s output was born not as an academic theory but out of a pressing practical need — in this case, the need to manage Britain’s meager resources in the desperate early stages of World War II.   

In a series of three articles published  in The Times of London, Nov. 1939, economist John Maynard  Keynes noted that in World War I, excessive money creation stemming from defense spending led to inflation, which greatly hurt the working classes. Can we avoid this in World War II? asked Keynes. We can. But how? First by calculating “the maximum current output we are capable of organizing from our resources” (i.e. GDP). Next, “by estimating how fast we can safely draw on our foreign reserves by importing more than we export” (i.e. Imports minus Exports). Next, by estimating the minimum necessary capital formation needed to maintain plant and buildings (Gross Capital Formation). Next, by estimating how much will be required by our war effort” (Public Defense Consumption). What is left is “the size of the cake which will be left for civilian consumption” [i.e. both personal and public]. Keynes recommended using taxation and compulsory saving to ensure that consumption spending  did not exceed that ‘cake,’ so that demand-pull inflation should not emerge. Keynes’ little 1940 book How to Pay for the War provided some initial estimates for Britain, 1940 (building on data collected by Colin Clark):

GDP = £4,850 m. = Personal and Public Consumption plus  Exports – Imports (£ 4,140 m.) plus Gross Investment (£ 710 m.).  

Partly as a result of Keynes’ influence, Britain did finance World War II with relatively little inflation, far less than in World War I.  

If management begins with measurement — how in the world did governments build economic policy without knowing GDP, before 1940? And why did not economists invent the GDP metric centuries before Keynes?  

Perhaps my fellow economists can provide some answers.

Michael C. Leach is the current head coach of the Texas Tech Red Raiders football team. He is regarded as one of the most innovative offensive minds in college football.  With a budget a fraction that of other top teams (Nebraska, Texas, Texas A&M, Oklahoma) and with only limited ability to recruit top high school talent, Leach has taken Texas Tech to a #2 ranking in America, and ended last season as #7. Most of his players are from Texas.

Leach’s Red Raiders ended the 2008 regular season with 11 wins and 1 loss, the best in school history. The season also marked Tech’s first win over a #1 ranked team — Texas. Tech, along with Oklahoma and Texas, shared the Big 12 South division title. The Associated Press named Leach the Big 12 2008 Coach of the Year.  

Leach did by changing the paradigm.

Leach’s teams are intelligent. He stresses to his players that they are there to study and gain a degree, not to play football. An intellectual himself, he addresses his players on a vast array of subjects, including pirates and DNA — each of his mini-lectures or parables has a football moral at the end. Tech football players have among the highest graduation rates among all leading college football teams. They are very smart. They have to be.

On a recent segment of the CBS program 60 Minutes, interviewer Scott Pelly (himself a Texas Tech alumni) showed a very short videotape segment of Leach’s quarterback throwing a forward pass. Pelley asked the quarterback to describe what he was thinking and deciding. The response took three full minutes, for a play that took two seconds. 

Leach trains his quarterbacks in a potent passing offense. On any given play, there are five potential receivers. The offensive line is spread widely across the field. At half time, Leach asks the players, socialist style, whether they feel they have all been given equal opportunities to ‘touch the football.’ Why?  Fairness and efficiency. If one player gets the ball too often, the defense can ‘key’ on that player. If the ball is evenly distributed, the defense has no idea who will get it on any given play. This is at odds with standard coaching (for instance, the Super Bowl game in which star wide receiver Larry Fitzgerald nearly won the game singlehandedly, scoring with only two minutes remaining;  Pittsburgh came back to score a touchdown just 32 seconds from the end.), which seeks to get the ball to the ‘money player’.

Most teams run 70 plays a game. Leach’s team runs 90 — a 28% increase. Why? Leach’s offense moves super-fast so that the defense cannot have time to organize and prepare.   

How do we know Leach has created a paradigm shift?

According to experts, all the leading American college football teams now use elements of Leach’s innovations. You cannot patent a football innovation. All Leach can do is continue to innovate, stay one step ahead of his opponents and emulate Texas Tech’s Masked Raider mascot (a masked rider on a black stallion): race onto the field and surprise and terrify his opponents.

By the way: Leach himself is one of the few leading American college football coaches who never played football himself. He is a lawyer who once considered public interest law. Right now, the public interest lies in his upsetting teams more wealthy, more powerful and less innovative than his. 

Tomorrow is the 200th anniversary of the birth of Charles Darwin, discoverer of the principle of natural selection and the theory of evolution. And in October we will mark the 150th anniversary of the publishing of his landmark book On the Origins of Species, a book that changed the way we think about the world.

What can we learn from Darwin’s life and discoveries about innovation?

1. Curiosity: Darwin was exceptionally curious about everything, from the time he was a small child. In his long four-year voyage on the Beagle, he visited Chile. He made extensive notes on everything he saw. There, he climbed high mountains and noted how layers of soil had been pushed up to form mountains. In the layers he found fossils of seashells and crustaceans. Aha! He thought. These layers were once, therefore, under the sea. How did a layer under the sea become a 12,000 ft. mountain? Later, he found the answer in a book by geologist Charles Lyell, who theorized (against conventional wisdom) that earthquakes pushed the earth up, twisting horizontal layers into near-vertical mountains. This process must have taken millions of years, Darwin thought. He filed this insight away — for later use.

2. Integration: Darwin read widely. He read about geology. And he read about economics. In 1798 an economist named Thomas Robert Malthus wrote an essay, An Essay on the Principle of Population, in which he observed that population expands rapidly, geometrically, while food expands only as an arithmetic series, meaning that food per person declines, leading to a struggle for survival. Darwin later remembered this idea and integrated it, along with his geology readings, into his theory. The theory of evolution owes its discoveries to Darwin’s ability to understand and use ideas very far from biology.

3. Courage: Prevailing theory about how species evolved attributed them mainly to Divine Providence. At the time Darwin lived, the Church was very powerful. Theories that contradicted doctrine were labeled as blasphemy. Nonetheless, Darwin published his insight, published in 1859, despite the consequences. Species evolve, he wrote, as they struggle for survival; only species who have traits that help them survive to reproduce will endure and pass on those traits. He used his observations of mockingbirds, collected in the Galapagos Islands, whose beaks had adapted according to conditions in different islands. This process, he noted, took many thousands of years. It contradicted the literal Biblical theory of creation (though, not entirely — the sun and stars were created only on the fourth day, so the first three “days” could have lasted for many millions of years). But Darwin wrote what he believed was the truth, regardless of Church sanctions.

Innovators should follow Darwin, as a role model, and constantly seek new ideas and information. One day, perhaps, you will take a piece from geology, a piece from economics, and a piece from botany and zoology, like Darwin, assemble it, integrate it, and find something so beautiful, so insightful, so earthshaking that the world will never again be the same.

A rhyming Hebrew cliché says, mi shematzbia — mashpia. Roughly translated: Those who cast — last.  
On Tuesday, as Israel endures its ritual held every two years since 1996 — national elections — a large minority of Israelis, perhaps as much as one-third, will choose not to vote at all. And if the weather forecast is accurate, predicting heavy rain, the turnout may be even lower. It may be as low as 63%, or lower, which is the percent of eligible voters who voted in America’s November 2008 Presidential election. The difference is, 63% will be close to the lowest turnout in Israel’s history, while 63% ranked as the highest American turnout since 1960 (when Kennedy was elected).

Many of those choosing not to vote will be younger voters, who see no difference between the leading parties and candidates and no real discussion of issues. I can’t blame them.

What can be done? I cannot transform Barak, Livni and Bibi into Obama. But perhaps I can make a modest suggestion for an innovation.

Two years ago we brought TIM managers on a benchmarking visit to Estonia, the tiny Baltic country a short ferry-ride southeast of Finland. There, Prime Minister Andrus Ansip himself told us that Estonia had held the world’s first comprehensive on-line ballot. Estonians voted from home, via computer; 3.5% voted online, on February 2007. It was the second time they did; the system was tried in municipal elections in 2005.

There are two major advantages. First, nations that aspire to be technology leaders, like Israel, should walk their talk. Second, on rainy days, like Tuesday, those who might be reluctant to go out in the rain, or who need to travel distances to vote (because they’ve changed their residence and did not update their voting information) will vote in two minutes from their armchairs. And young people, especially, are more likely to vote if they can do so while surfing the Net. 

Here is what WIRED magazine wrote about the Estonian innovation:

“The system, first tested in local elections in 2005, requires the use of a national ID card held by about 1 million of the country’s 1.3 million residents, which includes an electronic chip identifying its owner. Card readers were available from retailers before the elections for about $8, or are given away free by banks for use with e-banking applications. Election officials don’t know exactly how many people have the readers, but the number has grown sharply in recent months as prices have fallen, Koitmäe said.

And by the way — Estonia leads the world in on-line banking. Few Estonians actually visit their branch. Ansip holds cabinet meetings with absent ministers joining by Web, wherever they are in the world.  

There are technological and security problems to overcome. But, says Tarvi Martens, the person who built the Estonian system, “You trust your money with the internet, and you won’t trust your vote? I don’t think so.” 

Surely a nation as advanced as Israel in Information Technology can surmount them. Let’s bring the mechanism of casting a ballot into the 20th century (not to mention the 21st). Why is the ballot the last place that technology has yet to visit?

Turn threats into opportunities? Or, in Spanish, amenaza, no, opportunidad, si!

Here is a rather extreme example.  

Mexico suffers from widespread drug-related violence. Thousands of people have been killed. While El Paso, Texas, is one of America’s most peaceful cities, in Ciudad Juarez, Mexico, just across the Rio Grande, people are shot and killed daily.

Pretty threatening?

A boutique in Mexico City thinks its an opportunity. It sells only bulletproof clothing, including shirts and jackets.  True, their stuff is a bit pricey — say, up to $7,000. But hey, it’s a matter of life and death, literally. Apparently, their clothing is bought by Venezuelan President Hugo Chavez (just because he’s paranoid doesn’t mean they aren’t trying to get him), royalty and movie stars. 

How does the boutique know they are not selling to bad guys?

They run checks, using American databases. And they have little tracers in the clothing. If the clothes are used to commit a crime, the buyer can be traced. 

The boutique demands that its employees take bullets while wearing the clothing to prove it works. This brings new meaning to the “take a bullet for the team” phrase.  

“It feels like a punch,” some employees report. Those who live to comment, at least. Those who don’t? Well, nothing’s perfect. Employees reportedly love learning the high school physics equation: momentum equals mass times velocity, on their chests. Bullets have a lot of velocity: some travel 1,000 ft. a second, or 12 miles a minute.  

The boutique is especially hard to rob. If  robbers threaten employees with loaded pistols, the robbers are perplexed. The employees just say, hey thanks!  

Mexico allegedly spends $18 b. annually on private security. Can we hope for a bulletproof fashion show, in Tijuana, with the world’s top supermodel Gisele Bundchen (who made $35 m. last year) walking down the runway while taking  0.45 caliber bullets in the chest from fashion writers seated alongside?   

Beretta anyone?

How can you tell a good idea from a bad one? 

The way innovators answer this question is crucial. I caution my students and managers that  Type I errors (or “false positive”), or implementing a bad idea on the theory it is a good one, are far far worse than Type II errors, or rejecting a good idea on the theory it is bad.

Why? Because you can waste years of your life on a bad idea, a cost far worse and far dearer than wasting money.   And if you reject a good idea, well, there are thousands more like it.  So, invest considerable time and effort in checking out ideas; avoid Type I at all cost.

So, how can you tell a good idea from a bad one?  

A blog in Business Week’s “Innovation Engine” department (Jan. 27) by Michael Maddock and Raphael Viton, recommends — fun and laughter. Maddock and Viton run Maddock Douglas, a company that invents, brands and markets products for innovative firms.

For years I have told students — if your friends laugh at your idea, know that you are on the right track. Now Business Week’s experts validate that notion. 

People who work for Maddock Douglas meet daily at 9 a.m. for 9 minutes. They call it the ‘daily huddle’. The agenda: Share news. Maddock and Viton try to make the meetings fun. 

“There is a lot of silliness”, Maddock writes,” and a lot of laughter. Much of it has led to jokes, observations and comments that have in turn led to ideas that have directly impacted our clients and company.” The daily huddle, they relate, was invented by Verne Harnish, CEO of Gazelles, an “outsourced corporate university for midsize firms”,  based on his study of John D. Rockefeller.

The authors write:

Fun is the antidote to fear. If you are an innovation leader in a company that has become fearful, your people are on the road to failure unless you can change your culture. Cue the music,  it’s time to infuse some fun into the workplace.

In today’s global crisis, fear prevails in many organizations. Fear of job loss. Fear of error. Fear of mistakes. Fear of bankruptcy. 

Fear kills hope. Worse, fear kills ideas. 

Take the “F” in fear. Save the “F”. Strip the ‘ear’. Use the ear to listen. Do you hear fear? If so — add a “U” and an “N”.  Create fun.  

When was the last time your organization had a collective belly laugh?

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
February 2009
M T W T F S S
« Jan   Mar »
 1
2345678
9101112131415
16171819202122
232425262728  

Pages