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Global Trade: More Information Than Goods

 By Shlomo Maital

information

McKinsey Global Research points out a remarkable fact about global trade: “Soaring flows of data and information now generate more economic value than the global goods trade.”   According to McKinsey:

    “….   although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information.   Remarkably, digital flows—which were practically nonexistent just 15 years ago—now exert a larger impact on GDP growth than the centuries-old trade in goods, according to a new McKinsey Global Institute (MGI) report, Digital globalization: The new era of global flows.”

So, what does this key fact mean for innovators and entrepreneurs?

   Here are a few important implications:

  • “Individuals are using global digital platforms to learn, find work, showcase their talent, and build personal networks. Some 900 million people have international connections on social media, and 360 million take part in cross-border e-commerce. Digital platforms for both traditional employment and freelance assignments are beginning to create a more global labor market.”
  • “….not all countries are making the most of this potential. The latest MGI Connectedness Index—which ranks 139 countries on inflows and outflows of goods, services, finance, people, and data—finds large gaps between a handful of leading countries and the rest of the world. Singapore tops the latest rankings, followed by the Netherlands, the United States, and Germany. China has grown more connected, reaching number seven, but advanced economies in general remain more connected than developing countries. In fact, each type of flow is concentrated among a small set of highly connected countries.”
  • “…over a decade, all types of flows acting together have raised world GDP by 10.1 percent over what would have resulted in a world without any cross-border flows. This value amounted to some $7.8 trillion in 2014 alone, and data flows account for $2.8 trillion of this impact. Both inflows and outflows matter for growth, as they expose economies to ideas, research, technologies, talent, and best practices from around the world.”

     Bottom line?   Innovator, wherever you are, if you have an Internet connection (true, 4 billion people, or over half the world, do not), you have access to the New World of trade in information data and knowledge.   Perhaps trade in goods is lagging, owing to the Great Recession, but globalization of knowledge is alive and well.

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Buurtzorg: Innovation in Managing People

 By Shlomo Maital

Buurtzorg

   Buurtzorg Nederland is a Dutch home-care organization which has attracted international attention for its innovative use of independent nurse teams in delivering high-quality, relatively low-cost care.  Buurtzorg is Dutch for “neighborhood care”. According to Wikipedia: When they go into a patient’s home, Buurtzorg’s nurses provide not only medical services but also many support services, such as dressing and bathing, that are usually delegated to lesser-trained and cheaper personnel. Self-governing teams of 10 to 12 highly trained nurses take responsibility for the home care of 50 to 60 patients in a given neighborhood. This permits flexibility in work arrangements to meet both nurses’ and patients’ needs.  Buurtzborg employs 8,000 nurses.

   What is special about Buurtzorg? What can we learn from it?

“The organization has the most satisfied workforce of any Dutch company with more than 1,000 employees. A study by KPMG published in January 2015 shows that the company is a low-cost provider of home-care services, and that this is not attributable to its patient mix. When the patients’ nursing home, physician, and hospital costs were added to the analysis, total per-patient costs were about average for the Netherlands.”

   So why do people love working there?

   Buurtzborg has no ‘managers’. It has no hierarchy. Everyone earns the same (subject to education and seniority). Workers get bonuses if they meet their goals. The bonuses are the same for everyone. Everyone has the same clear sense of the importance of their work and their mission – caring for those who desperately need care, in their own homes. And most important – Buurtzborg is pro-nepotism. Nepotism, a no-no word for HR experts, means employing family members and favoring them. Buurtzborg loves employing members of the same family. The founder Jos de Blok employs his son and his wife in the organization, and many couples work together for it.

   Admittedly what makes Buurtzborg really work is the charismatic leadership of its founder de Blok.     Workers wonder, what will happen when de Blok retires or leaves?


 

 

 How to Cure Cancer: Zelig Eshhar’s Breakthrough

By Shlomo Maital

Eshhar

Prof. Zelig Eshhar

 

   Media reports last week brought exciting news about a new breakthrough in the fight to cure cancer.

       In an article in the journal Science Translational Medicine, a team at the University of Pennsylvania’s Abramson Cancer Center and the Perelman School of Medicine reported that 27 out of 29 patients with an advanced blood cancer saw their cancers go into remission or disappear altogether when they received genetically modified T-cells that were equipped with synthetic molecules called chimeric antigen receptors, or CARs. Those T-cells were able to target and destroy the tumor cells – specifically the ones that were responsible for the acute lymphoblastic leukemia the patients were suffering from. According to officials at the Fred Hutchinson Cancer Research Center, where the research was carried out, patients in the trial – some of whom were told in 2013 they had barely a few months to live – not only survived, but now, after the therapy, “have no sign of the disease.”

One of the pioneers of this approach is Prof. Zelig Eshhar, of Israel’s Weizmann Institute. According to press accounts:   “Eshhar has been conducting T-cell research for over a decade, and in 2014 was recognized by leading industry publication Human Gene Therapy for his work, along with Dr. Carl June of the University of Pennsylvania for their work in the field. In an article called “From the Mouse Cage to Human Therapy: A Personal Perspective of the Emergence of T-bodies/Chimeric Antigen Receptor T Cells,” published for the occasion, Eshhar laid out the mechanics of CAR T-cell immunotherapy – showing how his work on mice progressed to the point where the American team was able to pick up the cudgel and conduct a study on humans. With that. Eshhar cautioned Wednesday, the breakthrough did not in any way represent a “cure for cancer” – at least not yet. “Obviously much more work is needed,” he said. “One issue with this kind of therapy is that you have to develop specific T-cells for each kind of cancer. But studies like those are a great impetus to move forward with research. I believe the day will come when we will see many more cancers treated in this manner.”

     T-cells are the white blood cells produced by our immune systems that fight invading germs and microbes (and cancer cells). But they are generally too weak to fight off cancer cells, which have several clever defense mechanisms. However, by removing T-cells, and genetically modifying them, they can be strengthened – a bit like taking a Chevrolet Impala and souping it up with a Corvette 400 hp. engine. Eshhar has cured mice of cancer using this method, and the U. of Pennsylvania team extended his method to humans, with success.

     Will such T-cell therapy defeat all cancer, not just a form of leukemia and lymphoma? Let us hope!    

How to Pitch Your Idea: Secrets from TED

 By Shlomo Maital

storyteller 

     My Entrepreneurship courses, taught in Israel and in China, always end with each student team giving a ‘pitch’ – presenting their ideas to potential investors.   Even seasoned educators are often poor communicators, let alone very young students. What advice can I give, to help make ‘pitches’ highly interesting and effective – especially when you are pitching to a jaded audience, one that has heard it all before?   I’ve been reading a book by Carmine Gallo, Talk Like TED, about the most popular TED talks and what makes them so popular. The book is very useful, because it is based on a democratic ‘election’ – number of views. Here are the top TED talks of all time: (See List below).

   What makes for a TED talk that millions watch? I can boil down Gallo’s fine book into one recommendation, in two words: Tell stories!   Tell your own personal story. Get your message across with N=1, not boring N=5,000.   People relate to stories, learn from stories, their own and others.   Take for instance the TED talk by Jill Taylor. She is a neuroscientist, who had a serious stroke. She welcomed the stroke, because, as she explains, she could analyze the post-stroke brain “from the inside”, inside her own brain. And in 18 minutes, she tells the story. Watch it – it’s gripping.

   So – you have an idea for a product or service? Tell it as a story.   Who uses it? Name a real person. Why do they love it? How does it change their lives? Be authentic. Be real. Skip the Power Point. Slip in 2-3 key facts, but only as part of the story.   Try to add some ‘surprises’ – those who have heard it all need something to jolt them… wow, that’s interesting, haven’t heard that before.   Start with a punchy short key sentence… like Sergio Brin’s and Larry Page’s pitch to Sequoia, that got them a big check…and the rest is Google history. [“our search engine brings you all the world’s information in one click”].  

 

                                                            Top TED talks of all time

 

Ken Robinson. Do schools kill creativity?   Sir Ken Robinson makes an entertaining and profoundly moving case for creating an education system that nurtures (rather than undermines) creativity.

Amy Cuddy. Your body language shapes who you are. Body language affects how others see us, but it may also change how we see ourselves. Social psychologist Amy Cuddy shows how “power posing” — standing in a posture of confidence, even when we don’t feel confident — can affect testosterone and cortisol levels in the brain, and might even have an impact on our chances for success.

Simon Sinek. How great leaders inspire action   Simon Sinek has a simple but powerful model for inspirational leadership — starting with a golden circle and the question “Why?” His examples include Apple, Martin Luther King, and the Wright brothers …

Brené Brown. The power of vulnerability. Brené Brown studies human connection — our ability to empathize, belong, love. In a poignant, funny talk, she shares a deep insight from her research, one that sent her on a personal quest to know herself as well as to understand humanity. A talk to share.

Jill Bolte Taylor. My stroke of insight   Jill Bolte Taylor got a research opportunity few brain scientists would wish for: She had a massive stroke, and watched as her brain functions — motion, speech, self-awareness — shut down one by one. An astonishing story.

Creativity: The Dark Side

By Shlomo Maital

 dark side

      Some 53 years ago, Harvard Business School Prof. Ted Levitt, as always ahead of his time, noted in the Harvard Business Review that creativity has a dark side.

     “Creativity…can actually be destructive to businesses. By failing to take into account practical matters of implementation, big thinkers can inspire organizational cultures dedicated to abstract chatter rather than purposeful action. In such cultures innovation never happens – because people are always talking about it but never doing it.” [“Creativity Is not enough”, HBR 1963. Reprinted August 2002].

   My friend and colleague Prof. Ella Miron-Spektor drew my attention to this wonderful article.

     Levitt’s prescient insight shows how and why organizations tend to stress one half of the creativity yin-yang circle – novelty – and fail to invest time and resources in the crucial second half – usefulness and implementation. A case study of an Israeli high-tech company shows how it pioneered a unique approach for overcoming creativity’s dark side.   The key is in having high-level managers examine every creative suggestion, while guiding the workers toward ideas that are BOTH novel and highly useful.    

      ‘Innovative’ organizations, large and small, often fail to generate successful innovation, because their innovation process puts far too much weight on ‘novel’ and far too little weight on ‘useful’ and ‘creating value’.    One reason for this is that process innovation – how you do things, not what you do – is often neglected. Process innovation pays a far higher return than product innovation, yet many organizations don’t bother much with it. Why?

 

Innovator – Ask Dumb Questions!

By Shlomo Maital

 dumb questions

   How can one person change the world?   By asking dumb questions.

   Really?

   Here is what I mean. Last week I spoke with a founder of a startup called Aquarius. All four  founders are in their 50’s… not spring chickens. Not the twenty-somethings we often picture as startup entrepreneurs. One of the other founders is a serial inventor. And one day he asked a dumb question.

   The world auto industry is enormous, selling 90 million vehicles a year, with nearly a billion vehicles on the roads today. It is a major source of pollution and global warming. Car and truck engines burn hydrocarbons, either gasoline or diesel, and heavily pollute.

     Conventional car engines have worked on the same principle for at least 130 years. Gasoline is burned in a cylinder  when combined with air, driving the piston up and down. The up-down motion is converted into rotary energy, to turn the car wheels. The conversion process loses huge amounts of energy, making the conventional internal combustion engine only 20 % efficient.

     The Aquarius founder, Shay, asked: Why? Why convert up-down piston action to rotary wheel energy?   Duh… because, like, wheels go round and round, right?   For many decades, and many billions of dollars in research, huge companies have tried to improve car engines, without asking that dumb question. It’s obvious. Because wheels are round, you need rotary energy.

     Shay said, wait. Let’s lengthen the piston, and use its action to charge a battery. Then let’s send the electric energy to two electric motors attached to each of the front wheels.  No rotary conversion. No loss of energy.

     Result: 40% engine efficiency.   40%!!! Fuel saving. Plus, the key fact, far far less pollution, because by increasing air intake of the cylinder, the fuel is burned far more efficiently.     The whole engine is only 500 cc’s, about enough for a Fiat 500,   yet it is powerful enough to drive a larger vehicle. The engine generates an enormous 34 kilowatts of power, more than twice the power generated, for instance, by my Toyota Auris hybrid, (which I love, and which is wonderfully fuel efficient), which has an enormous heavy battery and generates only 14 kilowatts.   The Aquarius battery is very small, because there is no need to store electricity, it gets delivered immediately to the wheels. 

   Management consultant Peter Drucker once wrote a powerful article in Harvard Business Review, in which he challenged managers to challenge all their basic sacred cow assumptions. This is harder than you think.    We are often not aware of the things we believe are true, that in fact should and must be challenged. Drucker has a checklist that helps us run down all our assumptions and smash every single one, in search of a way to change the world.

   Remember the name. Aquarius. Will we live in the Age of Aquarius in the coming years? Stay tuned.

 

Business Ethics: Oxymoron?

By Shlomo Maital

   ethics

    I’ve just written my fortnightly column for a magazine (Jerusalem Report), about how “plunder and blunder” ruined a first-rate supermarket chain, endangering the livelihood of 3,500 employees, as it goes into receivership and bankruptcy. The shareholders plundered the profits rather than reinvest them. Legal? Sure. Ethical? Far from it.

   Strategy guru Gary Hamel has a new book out, What Matters Now: How to Woin in a World of Relentless Change, Ferocious Competition and Unstoppable Innovation. You can download a long summary by doing a Google search on the title.

     Surprisingly, this is not a book about how to compete at all costs, in a jungle. It is about values and ethics. Hamel writes, “managers are the ethics teachers of the company. They define the defining moments and how to deal with them.” He cites the 5 responsibilities of stewardship: fealty (view things with trust, not personal gain); charity (put others’ interest before your own); prudence (safeguard the future, don’t take great advantage of others or the present); accountability (take responsibility for your actions); and equity (distribute rewards based on contribution, not on power). The managers of the Israeli supermarket chain, the Board of Directors and the shareholders did none of the above.

     Hamel goes on: “We need an ethics revolution in business.   In a 2010 Gallop study, only 15% of respondents rated the ethical standards of executives as high or very high. Nurses came in first at 81%. Corporate lobbyists, at 7%”.

     I know countless businesses that were ruined by ethical corner-cutting. I know of a high-tech exec, billionaire, who back-dated options to the benefit of his workers….and fled a court summons, and now lives with his family in a very poor country, not his own, because it has no extradition agreement.

     Are you going to be a values leader? Hamel asks,   or a values laggard? “Having a set of ethical principles can ensure that our enlightened self-interest doesn’t go unchecked and cause a meltdown within our company.”

     Sounds like a sermon in church or synagogue? It’s actually a powerful, crucial business lesson. We would all do well to heed it.

 

How to Raise a Creative Child

By Shlomo Maital

creative child

Adam Grant, a Wharton management professor and New York Times Op-Ed contributor, has written a wonderful piece on “how to raise a creative child”, based on solid research. Here are a few of his observations. Parents (and grandparents): Take note.

  • Malcolm Gladwell, in one of his books, says success depends on investing 10,000 hours of practice. OK…but, says Grant, “can’t practice blind us to ways to improve our area of study?…the more we practice, the more we become entrenched – trapped in familiar ways of thinking?
  • What motivates people to practice a skill…is passion – discovered through natural curiosity or nurtured through early enjoyable experiences with an activity or many activities.
  • Psychologist Benjamin Bloom’s study of the early roots of world-class musicians, artists and scientists found that “their parents didn’t dream of raising superkids. They responded to the intrinsic motivation of their children. When their children showed interest and enthusiasm, their parents supported them.”
  • What does it take to raise a creative child? One study showed: parents of ordinary (non-creative) children had an average of six rules, like schedules, bedtime… parents of highly creative children had an average of fewer than one rule.
  • Harvard Prof. Teresa Amabile, creativity guru,  says parents of creative children placed emphasis on moral values, rather than on specific rules. At Grafton MA.’s Touchstone School, I had a wonderful discussion with children; they told me that once they integrated the school’s core values, rules of behavior were no longer necessary.
  • Parents of creative children encouraged their kids to find “joy in work”. Their children had the freedom to sort out their own values and discover their own interests. And that set them up to flourish as creative adults.

 

  •    It’s not rocket science. Find what your kids love doing, what stimulates their interest. Help them pursue them. Let them enjoy the pursuit. Build in their core values, then make them think for themselves about how to apply them. Avoid long lists of rules. Let them have fun. Give them freedom to explore.   And, though Grant doesn’t say this, make them T-shaped. Deep knowledge in something. Wide broad knowledge in many things.

Adam Grant. How to raise a creative child. International New York Times, Wed. Feb. 3, 2016, p. 9. 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
February 2016
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