You are currently browsing the monthly archive for February 2010.

Innovation Blog

How to Start Up HR in a Startup

By Shlomo Maital

(with Sarah Karu)

  (this blog is based on a short piece published in Israel’s on-line HR journal, Mashabei Enosh, vol. 265-266, Jan-Feb. 2010). 

    “You get one chance!”

    This is what legendary entrepreneur Kenneth Levy told us, when we brought a group of Israeli startup managers to visit the company he founded, KLA Tencor, in Silicon Valley. 

    What he meant was:  The corporate culture, the organization’s “DNA”, is set on day one, when the company is founded. After that, it is very difficult to change it, just as it is difficult to change more than one or two of a human being’s 23,000 genes. 

    What principles should be followed, in choosing and directing a startup’s human resources?  Here are seven principles my colleague Sarah Karu and I have identified:

Use the term Human Capital (HC) instead of Human Resources:   Great startups invest in their people from the outset, and make sure each has a Personal Development Plan.  By using the term Human Capital, this is more likely to be sustained.

* Align Human Capital with strategy:   Make sure the people who run human capital have business experience, and not just degrees in organizational psychology.  Otherwise they will  not be able to align human capital with the business strategy of the company.

* Build culture and values from day one:  Decide what your core values are, from the start.  Google did this only three years after their launch. The result was “Don’t Be Evil”.  Google no longer emphasizes that mantra.  It proved unworkable….

  * Get the right people on the bus:  Nothing is more important for a startup than the 3rd, 4th and 10th hires.  They set the tone.  But why should a startup entrepreneur trained in bits and bytes know how to interview or ‘read’ people?  Find someone who does.  This is crucial.   For Israel’s global firewall company Checkpoint, the three founders were brilliant — but the fourth hire, whom I spoke with this week, was the key; he linked the company’s technology with its marketing.  And almost no-one has heard of him. 

* Build HC measures of success:   Treat human capital management the same as you treat profit centers.  Give them measures of success, and run HC as a business, with a bottom line. This is possible. Make them measure the ROI for investment in training programs.

 * Align structure with strategy:   Make sure the organizational structure of your company exists solely to implement the strategy. And make sure this structure is flexible and changes rapidly to match changes in strategy.  Again, HC people must understand business strategy well in order to do this.

Lead change processes:   Like growing snakes, startups shed their ‘skins’ many times.  This change process is vital and exceedingly difficult.  Only if HC people know how to manage change effectively can they succeed.  The CEO alone cannot in general do this.


     Roughly the same time our piece appeared, another excellent piece on a related subject appeared in Business Week’s excellent Entrepreneur’s Journal, February 23, 2010, by Caterina Fake.  She is a social media pioneer and co-founder of the photo-sharing service Flickr;  she led the technology development group at Yahoo (YHOO) after it acquired her company in 2005. In 2008 she left Yahoo and joined Hunch as co-founder. And she’s only 40 years old!

     Here is her ‘take’: 

  “… the idea is just the starting point, just the first step. You also have to find the right people to help you do it. No successful company has have ever been the product of just one person.  As an example, there were probably about 100 companies that were doing a YouTube-like video sharing service in 2005-07. But the reason YouTube succeeded is it had all the essential elements together: the right team, the right product, the right location in Silicon Valley, the right execution. The entrepreneurs were able to raise the capital they needed to build and scale it. Obviously, it was a good idea, but the combination decided who the winner was.  The combination of the idea and who is doing it can’t be emphasized enough. Obviously, lots of factors go into the success of a company, but in my experience, those two are the most significant. You have to be building the right thing, first of all. And the right people can figure out how to build it, how to market it, and how to make it a winner.”



Global Crisis Blog

The REAL Sovereign Debt Crisis

By Shlomo Maital

     In general, the truth lies not IN the headlines, but behind them, in the back pages. 

    The sovereign debt crises in Greece, as well as in Ireland, Portugal,  Spain, and before them, Iceland, capture the media’s attention.  Because of bailout and fiscal stimuls spending, public debt as a percentage of GDP will exceed 110 per cent in 2014, in the G20 countries.  Under Europe’s Masstricht  Treaty, signed in 1992,  60 % was regarded as an upper limit.  But an insightful brief article by Richard  Barley, in the Global New York Times (Feb. 17) goes behind the headlines.[1]   The REAL debt crisis, it emerges, lies elsewhere.

     During the boom times of the ’90s and ’00’s, “recklessly generous social contracts offered to their citizens in the boom years [social security, health care, etc.]”  created enormous contractual legal entitlement debts stretching 50 years into the future.  These contracts, motivated by politicians’ desire to gain votes, represent irresponsible unforgiveable risk, because no government will be able to fulfill these obligations.  Governments in the US, UK and elsewhere have misled their citizens, leading them to believe they will be ‘taken care of’ after retirement, when in fact the money for this will not be available.  Compared to the reckless risk mismanagement  of the banks, governmental risk mismanagement is orders of magnitude worse.

      Here are the numbers.  According to the International Monetary Fund (IMF), an impeccable source, as well as a study by economist Jagadish Gokhale for the U.S. National Center for Policy Analysis,   the net present value of age-related deficit spending, as a per cent of GDP  [i.e., the present value today of future pension and health obligations to retired persons ]   is: 

             Greece 900 %   Canada 600%  US  500%  UK 450%   Portugal 500%

 In other words,  these governments have accepted such huge age-related commitments, that they will doubtless be unable to pay for them.  If you are aged 50 or more,  start saving.  Those benefits you think you will get on retirement?  Probably, you won’t get most of them. 

      Here is some simple economic analysis about how this age-related debt crisis will play out.  * As governments try to pay for these expenditures by borrowing, they will issue increasing amounts of government bonds. (Politically, in the US social security is known as the ‘third rail’ for politicians — touch it and you die — after the electrified 3rd rail on train and subway rails).   * Higher supply of bonds causes their price to fall, and yields (interest rates) to rise steeply.

    If you are invested in government bonds, take into account that there will be tremendous long-run downward pressure on their prices.   Another implication is inflation.  Governments in the past escape burdensome debt by inflating the currency, reducing the real cost of that debt.  Will they do this again?  In an age of deflation, the shortsighted do not worry about inflation. Yet a future inflationary scenario is highly plausible, given the huge amounts of money now floating about in the system, and the debt scenario described above.    

[1]  “After Greece, the real sovereign-debt challenge”,  IHT/Global New York Times, Feb. 17.

Innovation Blog

Five Minutes on 60 Minutes:   Six Lessons Innovators Can Learn from Don Hewitt

By Shlomo Maital


   The inventor, and long-time producer, of the leading CBS News program 60 Minutes, Don Hewitt, passed away last summer.  He was 86.  He invented this documentary program, and brought it to the air in 1968,  nearly 42 years ago.  He was its producer until he retired at age 81, in 2004. 

    Innovators can learn many key lessons from his life and work. Here are a few of them.  Reading this takes less than five minutes.

  * 1.  “Tell me a story”. 

     Hewitt, when asked to define good journalism, said, “Four words!  Tell me a story!”.   He insisted on a good story, not on dry facts.   TV news tends to be very dull.  Hewitt showed how to make it interesting.    Strong innovations tell a story too.  They create meaning, by creating a narrative, and context, for their users.   If you, innovator, want to communicate a strategic direction to your people — tell them a great story, and vividly portray, with details, where you expect to arrive if everyone fulfills their mission.

    Hewitt once used this principle to explain the success of the Bible.  The people who wrote the Bible, he said, wrote stories about evil in the world.   “And I latched on to this idea. “

* 2.  Foster controlled chaos: 

    Hewitt was a dictator, contentious, argumentative, fierce-tempered, who fought bitterly and continually with his journalists — an all-star cast, including Ed Bradley, Morley Safer, Mike Wallace, Lesley Stahl, Steve Croft.  His battles with Mike Wallace were legendary.   He did not use focus groups, panels, surveys, or anything else, to tell him what people wanted to watch.  Out of this controlled chaos, came great TV journalism.  The arguments ended in fast friendships, because the people who worked for him realized how deep his passion for TV news was, and how everything he did was driven not by his own ego, but by his passion for telling great stories.   Most people who worked for him did so for many many years, despite the constant conflict.  The situation at 60 Minutes was controlled chaos — little formal organization or process.  But it worked well, for creative people. 

 *  3.  The “Mildred” principle —  the common touch:

     Hewitt knew who his viewers are.  They are “firemen, policemen, hardhats”, he once said.  When accused in a Fox TV interview of being “elitist” (the very worst word Fox can think of),  Hewitt said that he uses the “Mildred” principle.  

   “Hey, Mildred!   Do you know what these guys are talking about?  Let’s shut it off or watch the basketball game.”   Hewitt knew he had to catch Mildred’s interest, that 60 Minutes pieces had to be clear, simple, gripping, interesting, telling a great story that you just HAD to watch.  

    Innovators — be sure you always remain in close touch with your clients, as Hewitt did; never forget who they are, how you are serving them, and what they need and want.   If your innovation succeeds, it is the fastest and easiest thing in the world for you to lose touch with your clients, because you are busy, wealthy, bored, or simply neglectful.

*  4. Don’t be afraid! 

     Hewitt was fearless.  He employed people who were fearless too.  Just after the American hostages were released, in Iran, Mike Wallace interviewed  the Ayatollah Khomeini for 60 Minutes.  Wallace said, quote:  “Sir,  forgive me, but, President Mubarak thinks you are a “lunatic”.  Forgive me — those are his words.  How do you respond to this?”…  He told President Clinton, interviewed after the Monica Levinsky affair:  Tell us the truth!  Then when they keep asking you, tell them you said it all on 60 Minutes!   Hewitt was fiercely competitive, and constantly checked 60 Minutes’ ratings.  He once stole an NBC TV truck and hid it in a cornfield (during the Khruschev visit to an American farm), to gain an advantage. 

*  5. Never hire people who always agree with you.

    Hewitt told ABC interviewer Barbara Walters: “Everyone who works for me is smarter than me.  No one is afraid to argue with me.  And they always do.”

*  6.  Turn your failings, your problems, into levers for success, not excuses for failure.

    Today, Hewitt would be diagnosed by child psychologists as “ADHD” (attention deficit hyperactive disorder).  He could not sit still for 15 minutes.  He flunked out of college.  He was endlessly restless and hyperactive.  He brought this quality to 60 Minutes. Each segment was no more than 15 minutes long, because he felt that was the maximum attention span of the viewer, no matter how gripping the story.  He made sure that every minute of the 15 minutes was gripping and interesting, part of the story, because if he lost interest, so would his viewers.

   Hewitt said that he did not understand the 21st C.  He was still living in the 20th C. But perhaps that was an advantage.  Perhaps many of his viewers were puzzled too by the 21st C.  Hewitt helped them understand it. 

Innovation Blog

Reinventing the Sandwich — How to Get Free R&D

By Shlomo Maital

  Visit the  Parish Café  in downtown Boston, on Boylston St. [1]  You’ll have the best sandwich you’ve ever tasted.       And to boot, you’ll learn a small lesson in innovation — the process, not the product.

   The owners of the  Parish Café  came up with a simple innovation.

  They asked the leading chefs of Boston’s top restaurants each to ‘design’ a sandwich.  The sandwich was named after the chef.

    The Paris Café menu is comprised of those ‘designer’ sandwiches.

    When a new star chef arrives,  he or she too gets their own designer sandwich.

    This is free R&D.  It employs the combined knowledge and experience of top chefs, gratis.  And it is win-win.  It gives each chef some publicity, builds business for their restaurant (“if you liked the sandwich, go eat at the authentic source”), and tickles some ego.  

     The idea cannot be patented or copyrighted.  Anyone can do the same. Tomorrow someone could open the London Café next door and do the same. 

     The only way to protect this idea is to implement or executive it flawlessly, and to broadcast “authenticity” — we are the source, the original, the authentic.

    Can this model be applied to products other than food?  I’m pretty sure it can.   Name a model of your product after a top designer — after he/she designs it for free…. 


* The Zuni Roll / $11.50   Created by: Cottonwood Café, Boston

Smoked turkey breast, crisp bacon, chopped scallions, dill havarti cheese, and cranberry-chipotle sauce wrapped in a flour tortilla and served warm with a side of homemade potato salad or cole slaw.

* Rowdy’s Famous Chicken Sandwich / $11.50  Created by: Rowdy Bessey, Chef-Flash’s, Boston

A baked, breaded chicken cutlet served on a deluxe roll with melted Swiss and cheddar cheeses, applewood smoked bacon,romaine lettuce and tomato. Sided with a homemade chipotle aioli and your choice of homemade potato salad or cole slaw.

* The Regal Regis / $12.50 Created by: Susan Regis, Chef-Upstairs on the Square, Cambridge

Sliced flank steak and portobello mushrooms in a soy, scallion and balsamic marinade. Served on Romano cheese crusted French bread with a side of homemade potato salad or coleslaw.

*  Elephant Walking on Eggs “Sandwich from the Mountain” / $11.25  Created by: Gerard Lopez, Chef/Owner-The Elephant Walk, Cambridge

An assortment of julienned vegetables sautéed with fresh goat cheese and New England eggs. Served omelette style on a French baguette. Sided with mixed greens, tomatoes and cucumbers with an herb vinaigrette.

* Sean’s Meatloaf Club / $12.75  Created by: Sean Simmons, Chef/Owner-Parish Cafe, Boston

Homemade chipotle meatloaf on Texas toast with romaine lettuce, tomatoes, applewood smoked bacon and chipotle-mayo. Served with garlic mashed potatoes and gravy.

* Veggie Wrap / $9.00  Created by: Jorge Ramos, Sous Chef- Parish Cafe, Boston

White bean hummus, tomatoes, romaine lettuce, alfalfa sprouts and crumbled feta cheese wrapped in a flour tortilla.  Served with a side of dill-yogurt spread and your choice of homemade potato salad or cole slaw.

* The Nebo / $11.25   Created by: The Pallotta Sisters, Executive Chefs-Nebo, Boston

Italian tuna on a crunchy baguette with an olive tapenade, Mediterranean aioli, lettuce, tomato, sliced hard boiled eggs, fresh basiland red onions. Served with a string bean-tomato salad.

* Mexican Meatball Sub / $13.00  Created by: Brian Poe, Executive Chef – Rattlesnake Bar and Grill, Boston

Cilantro infused Mexican meatball sandwich with a chipotle and jalepeno au jus, pepperjack cheese,red onions,lettuce and tomatoes on a toasted baquette. Served with an aguas fresca salad.

* The dbar / $13.50  Created by: Chris Coombs, Executive Chef- dbar, Dorchester

A pan-fried veal cutlet sandwich on a toasted baguette, topped with applewood smoked bacon, gruyere cheese, tomato-caper relish and tarragon-mustard aioli. Served with your choice of homemade potato salad or cole slaw.

* Egg Sandwich Lyonnaise/ $9.75   Created by: Tony Maws,Executive Chef/ Owner- Craigie on Main, Cambridge

Two eggs fried over easy and served on toasted white bread with applewood smoked bacon, sliced tomatoes, sliced red onions, frisee and dijon mustard aioli. Served with homemade potato salad.

* Steak and Blue / $15.75  Created by: Lydia Shire, Chef/ Owner- Locke-Ober, Boston

A sumptuous RARE tenderloin sandwich on blue cheese bread with roquefort butter and topped with marinated red onions. Served with mixed greens, pickled ginger cabbage and marinated red onions.

* Spicy Tuna Burger** / Market Price   Created by: Tim Cushman, Chef/Owner- o ya, Boston

Sashimi grade yellowfin tuna, finely chopped and formed into a patty and grilled to medium-rare. Served on a classic seeded burger bun with homemade spicey mayo, thinly sliced pickled ginger, scallions, mixed greens, roma tomatoes, toasted sesame seeds and a drizzle of kabayaki sauce. Sided with potato chips.


* Roasted Chicken Salad / $11.50 Created by: Mark Sapienza,Executive Chef- The Langham Hotel, Boston

Roasted chicken breast mixed with sweet garlic aioli, red onions, scallions, thyme and tarragon served on an Italian sub roll with sliced tomatoes and romaine and topped with crisp fried onions. Served with homemade potato salad.


[1] 361 Boylston St., downtown Boston.

Innovation Blog

Super Bowl Leadership:  Deeds, Not Just Words

By Shlomo Maital

Sean Payton   

   Sports legends are full of stories about inspiring half-time speeches by coaches, that energize his players and lead to victory.   The most famous is Notre Dame coach Knute Rockne’s “win one for the gipper” speech.

      George Gipp was a Notre Dame football All-American player, a star, who died tragically at age 25 of a strep throat infection.  Today, he would have been treated with antibiotics routinely.  Rockne asked his players to win the game in memory of “The Gipper”.  They did. The speech was immortalized by a B-movie actor named Ronald Reagan, in the film biography of Rockne.   Reagan went on to become U.S. President.

     In this year’s Super Bowl NFL championship football game  played in Miami, New Orleans coach did not make a stirring speech at half time, even though his team trailed Indianapolis 10-6 and looked outplayed and defeated.  Instead he made a risky decision. Here is how the press  (NY Daily News) described it:

Sean Payton coached one of the most aggressive games in Super Bowl history against Peyton Manning and the Colts and succeeded with perhaps the riskiest coaching decision ever in the championship game, an onside kick by a rookie punter to start the second half.

   Payton came to New Orleans after the Katrina disaster, in which the New Orleans SuperDome was used to house many thousands of homeless refugees, and was badly damaged.  For at least a season, his team could not play their home games at home.  They were once the worst team in the NFL, known by their fans as the New Orleans “aint’s” (rather than the Saints).  It became a fad to wear paper bags over your head (to signal the need for anonymity, as someone dumb enough to root for the team).  He rebuilt the team, bringing in a visionary quarterback named Drew Brees, who was motivated like Payton by the need to raise New Orleans’ morale.

     At the start of the second half, with New Orleans trailing 10-6,  Payton chose to do  an “onside kick”.  This means that instead of New Orleans’ kicker kicking the ball deep into the opponents’ end zone, he kicked it (as a strategic surprise) very short, bouncing the ball of the helmet of a Colts player, and then having the ball recovered by New Orleans, giving them possession. 

   This was a hugely risky decision.  Most onside kicks fail.  If this one had failed, Colts would have had huge momentum.  They would have gotten the ball close to midfield, and may well have marched downfield to score,  boosting their lead to 17-6. 

   Why did Payton do this?  As a powerful signal to his team: We’re here to win, we’re going to do everything possible to win, I’m willing to put my own neck on the line with a decision that, if it fails, will have me tarred and feathered.  And if I want to win so much, well, perhaps so should you. 

    His actions spoke louder than his words.  His players got the message. They outplayed the Colts in the second half by a wide margin and ended up winning 31-17.  It was a remarkable shift in the momentum of the game,  caused in large part by an inspired coach.

  And– by the way.   The team had practiced onside kicks intensively for two whole weeks before the game.  Innovation?  Sure — but, make sure you know what you are doing.  



Innovation Blog

Oldiepreneurs:  Gold Among Those Silver Threads

By Shlomo Maital

  Darling, we are growing old, silver threads among the gold…

    Darling, we are growing old,  this will make us far more bold…

  The first line is real, from a familiar song anyone over 80 years old will know.  The second line…I made it up.  But it reflects a trend, discussed in Peter Day’s BBC Global Business program.   Because of demographic aging, young people are scarce in Japan, Europe and even increasingly in China (because of the one-child policy).   As a result, countries will increasingly have to look elsewhere for entrepreneurial energy — perhaps to the oldies.

    Day notes that in Britain, some estimates show as many as one-fourth of all new startups are launched by people 55 or older.   In my own experience, one of Israel’s most successful serial entrepreneurs,  Shimon Ekhouse,  retired from a leading government high-tech company at age 48,  and began launching the first of (ultimately) nine successful startups (he’s on his ninth right now).   

    I think older people have many advantages as entrepreneurs. They have oodles of life experience.  They have time, if they are pensioners.  They have their pension, which provide security if they go bust, and some basic cash flow to start out.  They have many friends and contacts.  And they have intimate knowledge of a new, rich and promising market — oldies themselves! 

     The main obstacle?  I think it is simply mindset.  Pensioners simply do not think about the possibility of launching a business. But they should. And society should help them.  What about starting a VC fund dedicated solely to funding startups launched by oldies? 

    What about building a system, where young entrepreneurs are partnered with silver-haired oldies, combining youthful energy with senior life-experience? 

     There is definitely gold in those silver-haired oldies.   But gold has to be mined.   Countries that do such mining with persistence and wisdom will gain an important new resource.   


Innovation Blog:

Oh, Say Can You See?  How Innovators Can (and Must) Practice Sharpening Their Senses 

By Shlomo Maital

 Joshua Bell

    “Oh, say, can you see…” go the words of America’s national anthem, “in the dawn’s early light…”

      The answer for most of us is, frankly, No!   We cannot see.  Even in the bright sunshine of mid-day, let alone at dawn.  We cannot, do not, see.

      We do not see, hear, smell, taste or feel most of what goes on around us.  As a result, the spark for many great innovative ideas is utterly lost.  And much of the joy of daily life is lost.   

      Here is some vivid proof.   

       In a curious experiment initiated by Washington Post columnist Gene Weingarten, [famed concert violinist Joshua]  Bell donned a baseball cap and played as an incognito street busker at the Metro subway station L’Enfant Plaza in Washington, D.C. on a cold winter morning,  on January 12, 2007.   

 What was the result of the experiment?  Weingarten wrote, in his article:[1]

      It was 7:51 a.m. on Friday, January 12, the middle of the morning rush hour. In the next 43 minutes, as the violinist performed six classical pieces, 1,097 people passed by. Almost all of them were on the way to work, which meant, for almost all of them, a government job. L’Enfant Plaza is at the nucleus of federal Washington, and these were mostly mid-level bureaucrats with those indeterminate, oddly fungible titles: policy analyst, project manager, budget officer, specialist, facilitator, consultant.

       Each passerby had a quick choice to make, one familiar to commuters in any urban area where the occasional street performer is part of the cityscape: Do you stop and listen? Do you hurry past with a blend of guilt and irritation, aware of your cupidity but annoyed by the unbidden demand on your time and your wallet? Do you throw in a buck, just to be polite? Does your decision change if he’s really bad? What if he’s really good? Do you have time for beauty? Shouldn’t you? What’s the moral mathematics of the moment?

     The experiment was videotaped on hidden camera; among 1,097 people who passed by, only seven stopped to listen to him, and only one recognized him.  For his nearly 45-minute performance, Bell collected $32.17 from 27 passersby (excluding $20 from the passerby who recognized him).   (Weingarten won the 2008 Pulitzer Prize for feature writing for his article on the experiment.)   

  Gene Weingarten concludes:

   A onetime child prodigy, at 39 Joshua Bell has arrived as an internationally acclaimed virtuoso. Three days before he appeared at the Metro station, Bell had filled the house at Boston’s stately Symphony Hall, where merely pretty good seats went for $100. Two weeks later, at the Music Center at Strathmore, in North Bethesda, he would play to a standing-room-only audience so respectful of his artistry that they stifled their coughs until the silence between movements. But on that Friday in January, Joshua Bell was just another mendicant, competing for the attention of busy people on their way to work.

  There is a powerful lesson here.   

     Many wonderful things happen around us.  Most of them are seemingly small — a child playing a game, a puppy, a senior-citizen couple holding hands, a strange cloud — and most of the time, we are too busy, and in too much of a hurry to do “important” things, to take notice.   So when a world famous concert violinist plays in a subway station, few take notice.  They assume that a street musician is inferior,  otherwise, why in the world would he or she be a street musician?

      Let us vow to do the following, for the coming seven days:

      Seek to notice small unusual things or events.  When you find them, be aware of them.  Sharpen your vision.  Practice makes perfect.  As you take note of these things, you will find that spotting them becomes much easier.  No matter how hurried you are, stop and take notice.  Take time to delight in the small things the world offers. 

      In his book How to Think Like Da Vinci, Michael Gelb notes how da Vinci, perhaps the most creative person in the history of the world, exercised his creativity muscles constantly by sharpening all his senses:   sight, hearing, touch, taste, smell.   

     We may not become da Vinci.  But we can become far more observant of the wonders that unfold around us.   We can hear a street violinist,  and stop for a moment to listen, and put some money into his/her cap. 

     We can, with practice, answer the rhetorical question in The Star Spangled Banner:  Yes!  I can see. 


[1]  Gene Weingarten, Pearls Before Breakfast:  Washington Post, Sunday April 8 2007.

Innovation Blog

Steve Wozniak’s EUREKA moment:  How Color Came to Apple Computers:

* with thanks to Blog reader Yoav Medan,  Insightec, for drawing my attention to this Eureka moment: 

Steve Wozniak:

     ” Nobody expected color to come into computers, at the time it  cost $1,000 and it took  tons of chips. I figured out how to do it with one little $1 chip. I was  without sleep for four days and nights, because [Steve]  Jobs and I got a project to design a game for Atari, it was called BREAKOUT and we needed the money.  I worked  four days and nights without sleep.  Games  in those days  were hardware — chips and voltage.  I  didn’t think it was possible to do it in four days, but we did, we  designed the whole thing in four days.  When you go without sleep, and then when you’re going to fall asleep, your head goes into a state of creativity, you are not restricted to normal thoughts.  That day, my head was in this floating state.  Now on the Atari floor, Atari was  only B&W, but they had this thing going across the TV screen changing colors, and they used little strips of Mylar (thin plastic)  on the TV screen to do it,  I thought it was so beautiful,  Steve was wiring up the board for Atari, and I started drifting, you know , thinking that signals from color TVs go up and down, so I thought, what if you made a signal that went up and down at different rates, would it look like color?     Then, oh my gosh, Eureka!  I figured out how 0,1 bits circling around, up and down, and red would become blue,  different patterns,  I had 16 patterns  (2 to the fourth power),  lighter, darker, color!  Finally I wired it up a year later, and brought Steve [Jobs] over, that was Eureka! It worked!   We knew this was a big change in the world.

    Sometimes you are not sure if something will work, and we did not follow all the methodology, all the science in the book, but the idea was similar enough so that it might work..and it did..”   


 Innovation Blog

The Devil Wears Prada — but  Innovators Win Oscars:  Charisma, Leadership and Innovation

By Shlomo Maital        Steve Jobs again took center stage on Jan. 27, announcing Apple’s $499 iPad.  His performance, as seen on YouTube, was theatrical, worthy of an Oscar.   Bouncing around the stage, effusing superlatives for a product whose innovativeness is minimal  (“phenomenal, an incredible experience!   a dream to type on!”…”),  Jobs’ hysteria raised a question in my mind.

     What in the world is he up to?  Is it all about him, Steve Jobs?  Has ego captured Steve Jobs, as Allied forces captured the beaches of Normandy in 1944?  Does his overpriced iPad enable us to do things easily that we do not really need to do at all?

     According to Harvard Business School Professor John Kao, a leadership guru, “Apple represents the ‘auteur model of innovation’.  There is a tight connection between the personality of the project leader and what is created.” [1]   Kao cites movies as a metaphor — Hitchcock’s “Vertigo” or Cameron’s “Avatar”, both bearing the powerful stamp of the director.   

     With due respect to Kao, I think he errs.  Movies are a team effort.  So is iPad.  Here is my defense of Steve Jobs’ behavior. 

     In my Dec. 20, 2009 blog,  “Avatar and Titanic: Innovation 20,000 Leagues Under the Sea — James Cameron and Robert Ballard”,  I noted the Jekyll & Hyde schizophrenic quality of large-scale innovators (like Cameron, who raised $400 m. to make Avatar) and Ballard (who constantly raises funds to support his expensive exploration vessel and laboratory).  Cameron and Ballard are willing to act like egomaniacs, make extravagant claims, excite their audience on TV and get them to whip out their checkbooks.  This is Mr. Hyde.  He is essential to large-scale innovations.  He is King of over-the-top charisma.

     But when they work behind the scenes, with their team, they are Dr. Jekyll — amiable, modest team players, willing to listen to wild ideas, able to attract creative people and keep them happy.  He is the Prince of collaboration, sharing, understatement.    Mr Hyde is equally essential.  And Jekyll & Hyde must co-exist, without one dominating the other.  This is very difficult, and few leaders can manage to excel in both roles. 

     Steve Jobs is great at both.  He can win an Oscar on stage, and wins smiles  and super-creativity backstage.  Implementing “Think Different!” takes more than one Steve Jobs.

      But there is one major caveat.  The histrionics of innovation leaders on-stage can be ruinous, if these leaders insist of surrounding themselves with the trappings of their position: sumptuous offices,  $10,000 wastebaskets, and so on.  In their Harvard Business School study,  “The Devil Wears Prada?  Effects of Exposure to Luxury Goods on Cognition and Decision Making”,   Roy Chua and Xi Zou report that “…mere exposure to luxury goods increasesindividuals’ propensity to prioritize self-interests over others’ interests, influencing the decisions they make.”  

     In other words:  As an innovation leader, go ahead and win that Oscar on stage, to create buzz for your product.  But if you surround yourself with luxury, sooner or later it will corrupt you, and you will begin to believe your own hype.  

     The Devil wears Prada.  Innovators pitch, hype and exaggerate, but wear jeans and drive Fords and give maximum credit to their team-mates.

[1] Quoted in Steve Lohr, “At Apple, Innovation with a Personal Twist”, IHT Monday Feb. 1, 2010, p. 15.

Innovation Blog

Innovating by Defining (and Sticking to) the Rules

By Shlomo Maital

    More than once, in this space, I’ve defined innovation as breaking the rules.

    Dr. Atul GawandeWell, here is an innovation that focuses on obsessively defining and sticking to the rules — one that saves lives.

   Dr. Atul Gawande is a Harvard Medical School professor,  practicing surgeon, New Yorker staff writer and brilliant author.  His new book is called The Checklist Manifesto (Metropolitan Books: 2009). 

    Here is what Steven Levitt (author of Freakonomics) says about the book in his New York Times blog:

” It is the best book I’ve read in ages. The book’s main point is simple: no matter how expert you may be, well-designed check lists can improve outcomes (even for Gawande’s own surgical team). The best-known use of checklists is by airplane pilots. Among the many interesting stories in the book is how this dedication to checklists arose among pilots.”

    And here is what author Malcolm Gladwell (author of The Tipping Point and Blink) says about it:

        ” Gawande begins by making a distinction between errors of ignorance (mistakes we make because we don’t know enough), and errors of ineptitude (mistakes we made because we don’t make proper use of what we know). Failure in the modern world, he writes, is really about the second of these errors, and he walks us through a series of examples from medicine showing how the routine tasks of surgeons have now become so incredibly complicated that mistakes of one kind or another are virtually inevitable: it’s just too easy for an otherwise competent doctor to miss a step, or forget to ask a key question or, in the stress and pressure of the moment, to fail to plan properly for every eventuality. Gawande then visits with pilots and the people who build skyscrapers and comes back with a solution. “

   “Experts need checklists–literally–written guides that walk them through the key steps in any complex procedure. In the last section of the book, Gawande shows how his research team has taken this idea, developed a safe surgery checklist, and applied it around the world, with staggering success.”

    Management educators teach that business success requires three essential disciplines:  innovativeness, operational excellence and customer intimacy.  They stress that these disciplines are closely related.  Innovation succeeds only when combined with operational skill.  Operational skill, in turn, may require adherence to a checklist, as Gawande suggests. 

    The trick is,  how to combine  chaotic rule-defying creativity with the rule-adhering Prussian discipline of checklists. 

    Great innovators succeed.



Blog entries written by Prof. Shlomo Maital

Shlomo Maital
February 2010