Why You Must Listen to Sales!

By Shlomo Maital  

sales

As a management educator, I recall doing Workshops for senior management, and asking participants what their job function was. More often than not, one key position was missing – Sales. The sales personnel had no time for Workshops. They were out in the field, selling, because much of their income was based on commission…and you get no commissions sitting and listening to a professor.  

     Far from sight, far from mind. When sales does not sit in headquarters, it is often underused or even forgotten. Yet it is sales, not marketing, that has the key market insights.

     Now comes Sony, comes an object lesson in why you must listen to sales. Sony has been struggling for years. Finally, it has a winner – Sony Interactive Entertainment (its video game division) has a winner, PlayStation VR, a virtual reality headset. Since it went on sale in October, it has been scarce in stores, especially in Japan.

     Why?

       Andrew House, global CEO of the division, among those inside the company advising that Sony make fewer of the headsets, explains, “it’s the classic case in any organization – the guys who are on the front end in sales are getting very excited, very hyped up….you have to temper that with other voices inside the company, myself among them, saying let’s just be a little bit careful.”

       Let’s think about that. Those who make the sales, and who earn their income from them, are hyped up. They know the market. They know what they can sell and how many. But the headquarters gang, up in the corner office, on the 42nd floor, who haven’t talked to a real customer for a decade – they are cautious.

       So whom to you listen to?

       For innovators, and startup entrepreneurs:   At the outset, forget about marketing. Focus on sales.   Find a great salesperson. Get them out into the market. And consult with him or her frequently, often, and really listen, and take their advice seriously.

       Lost sales due to undersupply will usually not be recovered. Sony’s VR has competitors. Four months after it went on sale, Sony’s VR headsets sold 915,0000! This is not that far from iPhone’s 1.4 million unit sales in three months, after launch in 2007. So, did Andrew House learn a lesson?   I wonder.

Source: Global NYT, Int. edition, March 1/ 2017, p. 9.

Forgotten Farmers

By Shlomo Maital

sheep

Today’s New York Times has an unusual Op-Ed piece by James Rebanks, a British sheep farmer, who lives in the lovely Lake District. (I recall hiking there, when I was a student at U. of Manchester 50 years ago). He is touring the US to promote his new book, a memoir, “The Shepherd’s Life”.

   Here is a key passage: “Economists say that when the world changes people will adapt, move and change to fit the new world. But of course, real human beings often don’t do that. They cling to the places they love, and their identity remains tied to the outdated or inefficient things they used to do, like being steel workers or farmers. Often, their skills are not transferable anyway, and they have no interest in the new opportunities. So, these people get left behind.”

     We economists spin theories from our comfy offices, about how the force of social Darwinism (competition for resources) drives efficiency. You’re a farmer? Herd sheep? Your country imports cheap mutton? Tough for you. Find another trade. That’s life.

     This is the economic theory. It’s time to rethink it.

       Economic freedom should also mean the freedom to choose our livelihood, and to engage in it as long as we wish.   Farmers are so few, so forgotten, and are so threatened..Rebanks writes about abandoned farms through the US, but who cares? Who even notices? America is flooded with cheap (and mostly unhealthy) food from abroad.

       Rural America matters.   So does rural EVERYwhere. Rebanks is right. Time to rethink the cruel free-market theory economists sold the world.

       Last Saturday (shabbat), I had the privilege to read a passage from the Bible, Kings 2, in our synagogue. The passage tells how young King Joash restores the Temple, by raising crowdfund money, “everyone according to his heart” and to his soul. Money. Heart. Soul. Those three things must go together in any economic system that claims to be just and fair.   An economic system without a heart or soul is unacceptable.

 

Mildred Dresselhaus, 1930-2017

By Shlomo Maital

dresselhaus

Mildred Dresselhaus

   On Feb. 20, MIT Professor of physics and electrical engineering, Mildred Dresselhaus, passed away at her home in Cambridge, MA. She was 86. Born Mildred Spiewak, she was the very first female Institute Professor at MIT (an Institute Professor is a super-distinguished professor).

   Dresselhaus was known as the Queen of Carbon, in scientific circles. She used magnetic fields and lasers to map out the electric structure of carbon and found that by stitching in alkali materials, carbon can become a superconductor. She pioneered in researching “buckyballs” (fullerenes), soccer-ball shaped cages of carbon atoms, widely used for drug delivery, lubricants and catalysts. She also had the idea of rolling a single layer of carbon atoms into a hollow tube, the nanotube, making a structure with the strength of steel but just 1/10,000th the width of a human hair.

     Dresselhaus published over 1,700 scientific papers.   Her life was one of struggle and perseverance. She was the daughter of poor Jewish immigrants from Poland, and grew up in the Bronx.   She went through university on scholarship.  

     She once recounted, according to the New York Times, “my early years were spent in a dangerous multiracial low-income neighborhood. My early elementary school memories up through ninth grade are of teachers struggling to maintain class discipline with occasional coverage of academics”.   From age 6, she travelled long distances on the subway. She got in to Hunter High School, in Manhattan, and then Hunter College. Her lifelong mentor was Nobel Laureate Rosalyn Yalow, from whom she took an elementary physics course.

     Why did she choose to study carbon? Because it was unpopular and considered uninteresting, she observed. She and her husband were hired by MIT in 1960, because MIT was one of the few places that would hire a husband and wife team. At Lincoln Labs, she was one of only two women, out of a scientific staff of 1,000.

         She is survived by her husband Gene, and four children, Marianne, Carl, Paul and Eliot, and five grandchildren.   She will be remembered as the first woman to secure a full professorship at MIT, in 1968, and she worked “very vigorously to ensure she would not be the last”, observed Natalie Angier, in the New York Times.

How Life Began on Earth

By Shlomo Maital

urey1urey2

Miller and Urey                         …. And their famous experiment

 

   Stephen Hawking’s brilliant PBS series Genius has a segment on how life began and evolved. In it the amazing 1952 chemistry experiment of Stanley Miller and Harold Urey (U. of Chicago) was described. The experiment shed light on how life began on earth.

     The experiment was beautifully simple. We know now that life is mainly made of proteins, and proteins are made up of amino acids.   But how did amino acids form? And what do amino acids do for us?

  • In the brain, glutamate is the main neurotransmitter (sending signals from one neuron to another, known as thinking) as neurotransmitters;   hydroxyproline is an important component of our connective tissue; glycine is crucial for red blood cells (that carry oxygen to all parts of the body); and another amino acid carries fat cells (lipids).

       Miller and Urey took methane gas, ammonia, and hydrogen gas, the gases prevalent in the earth’s atmosphere billions of years ago; they boiled water to create ‘clouds’ in the atmosphere; and added sparks, representing the lightning then occurring. Basically a very simple simulation of the gases in the earth’s atmosphere as it was when early life first formed, with some electrical energy from lightning.

       They ran the experiment for a week, then opened the flask and checked to see what happened.

         They found that three amino acids were formed. Amino acids are made of carbon, hydrogen, oxygen and nitrogen. The experiment showed how amino acids could have formed in the earth’s atmosphere…and, presumably, life began later, as the amino acids combined and became complex.

           For those who love the Bible, does this demean our faith? Not in the least. I asked a very religious relative about this, and his response was that evolution, and the Urey experiment, confirm the Biblical creation account, rather than deny it.   The beauty and complexity of all the forms of life that evolved from a handful of amino acids are surely inspiringly divine in their nature.

     As a postscript:     After Miller’s death in 2007, scientists examining sealed vials preserved from the original experiments were able to show that there were actually well over 20 different amino acids produced in Miller’s original experiments.  

Our Amazing Brains: It’s All About Connections

By Shlomo Maital

  synapses

Synapses: human brain

    

       Some truly amazing facts emerged from a Horizon documentary featuring British anatomist Professor Alice Roberts.

  • We humans share 99% of our genes with chimpanzees. In fact, we are more closely related to chimpanzees, genetically, than chimpanzees are related to, say, gorillas.
  •    Our brains are very large, relatively. The brain weighs about 3 pounds (1.4 kilo), and has a volume of about 1,200 cm3. But it is not just the size that matters. What makes us smarter than chimps is the connections! A human brain has 100 billion neurons, or nerve cells. These neurons are connected by synapses. There are at least 100 trillion synapses, and maybe as many as 1,000 trillion. That means each neuron is connected to at least 1,000 other neurons, and maybe 10,000.
  • It is these connections that are crucial. The internal network of the brain is what makes us creative, able to think and reason, to link ideas together, and to imagine things that do not yet exist.
  • According to Prof. Walker, geneticists have discovered a key gene, that differentiates between our brains and that of the chimpanzees. This gene controls the size and number of the synapses, or network connections. Chimps have one such gene. Humans have four of them.   When the researchers genetically inserted the gene into mice, the synapses of the mice became thicker and more numerous. So —   humans have evolved to be smarter than chimps, because we have these four powerful genes that build our brainy networks.
  • Brains are ‘neuroplastic’. If part of the brain is damaged, by stroke for instance, other parts can compensate.   To some extent, the brain can reinvent itself, to do tasks normally assigned to brain parts that have been damaged.
  • Walker, an anatomist, dispels the “obstetric paradox” — women’s pelvis must be wide enough to permit birth, but not so wide as to hinder mobility, walking and running. Researchers have shown that in fact, the female pelvis, though angled wider than that of the male, is highly efficient in walking and running.   So why then are babies born at 9 months?  There is another reason.
  • Babies consume large amounts of energy.   Mothers’ ability to supply that energy continually grows, to meet the embryo’s needs – but the rate of growth slows. At 9 months, the ability of the mother to supply energy to the fetus exactly equals the needs of the fetus for energy. If birth were delayed, the fetus would be starved. So nature conspires to initiate birth, right when the supply and demand of fetal energy match.

     Humans have one more advantage over chimps, according to the Horizon documentary. Humans cooperate altruistically. Chimps cooperate too, but only to get an individual reward. Human children, even very young ones, cooperate, and then share rewards, if the rewards are given unequally (more to one child than to another).  

     This innate sense of fairness exists in children – but, in modern capitalism, seems to disappear. The very wealthy seem to believe they somehow deserve vast wealth. How then do we restore the innate sense of fairness that exists among young children?

BBC: Origins of US (Horizon).

Why U.S. Dams (and Society) Are Crumbling

By Shlomo Maital

dam

      Two newspaper items (one in New York Times, the other, Financial Times) reveal why America is crumbling.

         California’s Oroville Dam, America’s tallest, has a crumbling spillway that forces evacuation of 200,000 nearby residents. (A dam collapse in California in 1928 killed 400, as a wave of water swept over them). As early as 2005, experts spotted a design flaw in the dam – never corrected. Heavy rains filled the reservoir to capacity, and severe weather because of global warming reveals that this dam, and many others, are not up to the changing weather patterns, for which they were not designed.

         There are 1,585 dams in California, notes the NYT, and 90,000 dams across the U.S. Many are in poor shape. Why? “Government is more inclined to invest money in building new projects, than in less visible and glamorous maintenance”.

         America is a consumption-driven society that under-saves. A $500 b. trade deficit (imports minus exports) for nearly 3 decades is a symptom. China is not to blame. The U.S. itself is. It is comfortable to borrow money from China to buy consumer goods. Some 23 years ago, my wife Dr. Sharona Maital and I published an article, in the Journal of Socioeconomics, in which we warned about a drastic fall in savings behavior in the US and    Western countries. *   Nothing has changed since.

           The Financial Times notes today:

     “China ended a six-month streak disposing of its US Treasury holdings in December, adding to its position for the first time since last May as the country’s central bank seeks to manage capital flight. The country, which ceded its status as the world’s largest owner of haven Treasuries in October to Japan, added $9.1bn of US sovereign debt to its reserves in the final month of 2016, new data from the Treasury and Federal Reserve showed on Wednesday.”

         So, in the post-Trump era, America has gone back to borrowing, to buy consumer goods rather than maintain its dams, its roads, schools and infrastructure.

       And President Trump? He is rapidly running down his checklist of promises, issuing so far 11 Executive orders.   But what about that trillion-dollar infrastructure plan? Dead silence. Why? Because it will take a vast plan to design and implement it. In the current chaos of the new Administration, it is unclear whether the Trump presidency is up to the challenge – or even whether it is aware of the problem.  

         So America – at least, its dams and roads – are crumbling. I don’t see a solution in the near term.

 

* Shlomo Maital and Sharone L. Maital. “Is the Future What It Used To Be? A Behavioral Theory of the Decline of Saving in the West”. Journal of Socio-Economics, vol. 23, 1,2.   1994.

Retirement Security: Not Just About Money

By Shlomo Maital

  

   Writing in the American Psychologist (2016, no. 4.),   Jacquelyn Boone James and Christina Matz-Costa, along with Michael A. Smyer, make a simple, key point. Retirement security is NOT just about having enough money.   It is also about “psychological security” — the desire to stay engaged, contribute to society, and feel a sense of belonging in later life.

     I am 74 and am keenly aware of this. At this age, it is a daily struggle to remain relevant for those around me. How to do it?

     Find new and better ways to “create value”, the mantra of entrepreneurs. Support grandchildren (and children), and provide them with the previous-generation computer, tablet, smartphone or automobile; encourage them, give gentle advice, and just be there to listen. Be a good colleague. I regularly bake bread for my officemates; small but for them, noticed and valued.  

     Bring your experience to the table. Do it gently, because the world changes rapidly – but often, noting what has gone before is of value to those who are unaware of it.

   Generate lots of ideas, and then give them away – let your colleagues grab them and run with them, and even own them.   Giving up a child for adoption is painful, but giving up ideas for adoption can be glorious.

     Give praise and encouragement generously. Often praise (when deserved) is a scarce commodity. Help even the score.

       Be a good listener. Offer your ear to your colleagues and your family, and simply listen attentively. Sometimes, that’s all they want. Not solutions, or suggestions, but simply, someone to listen.

       Invest time to keep up to date. A key part of relevance is knowing what is going on today. If your knowledge is dated, and it quickly becomes so, it will be less and less valuable, and you will be less and less relevant.

         Work at creating value for those around you daily, make it a part of your life, and you will ultimately achieve a large measure of psychological security, because you will be needed by those you love and care about – and nothing can be more important or meaningful, for seniors.

How Technion Physicists Cracked a Mystery of Biology

By Shlomo Maital

  hydra

Hydra

A team of Technion-Israel Institute of Technology physicists (led by Profs. Kinneret Keren and Erez Braun, with a group of students) has published breakthrough research in the journal Cell Reports. It is unusual for physicists to publish in a biology journal. Here is the story.

   The subject of the  research was the amazing ability of the “hydra”, a tiny fresh water animal, 1 cm. in size (about half an inch), to regenerate itself. The hydra’s skeleton has a built-in memory that enables it to regenerate.   If you take a piece of hydra tissue, it can soon regenerate the entire animal. But how?   Until now, it was thought that this worked through chemical signals that guided the tissue on how to create a head, tentacles and a foot.

   But the new Technion study finds a different explanation. It is done with thin protein fibers. The skeleton of the protein fibers survive, and they instruct cells how to arrange themselves to create an adult body. First, the pieces of tissue severed from the hydra form a small ball. This forces the protein fibers to balance the preservation of the old skeleton structure and adaptation to the new ball. New body parts develop, based on the pattern information stored in the skeleton. The ball soon sprouts a mouth and a whole new animal. The physicist researchers used their science to understand the physical role of the “ball”.

     Could this one day lead to a technology that enables humans to regenerate their body parts?   Far fetched? Indeed.   But it could happen.

     The fruitful research of physicists in biology reminds me of a meeting I had with a distinguished Indian scientist, during a recent visit, who decades ago pioneered in biophysics, which has since yielded huge bounties.

     Innovator – if you can link two fields that are heretofore unconnected, you may come up with change-the-world ideas.

 

Ashley vs. Ivanka: Choose Your Role Model

By Shlomo Maital

  biden

Ashley Biden & Father Joe

   President Trump recently tweeted his recommendation, that people buy his daughter Ivanka’s upscale fashion designs, after retail chain Nordstrom took her clothes off its shelves. (“They don’t sell,” Nordstrom claimed).

   Another famous politician has a designer-daughter – former Vice President Joe Biden and his social worker daughter Ashley.   Her story, and product, are a bit different.

   According to Elle Magazine: “Ashley’s new ethically produced, American-made clothing company, is a project any dad would be proud to get behind. It kicks off with a range of supersoft organic cotton hoodies on sale for just a few weeks, starting February 8, in partnership with the flash-sale behemoth Gilt: The entirety of the proceeds from the debut collection will be channeled to programs that work to alleviate poverty through education, training, and job placement.

     “Ashley, 35, who is also the executive director of the Delaware Center for Justice, a nonprofit that serves children and adults impacted by the criminal justice system, had toyed with the potential nature and mission of Livelihood for years. One thing that never wavered was the idea of the hoodie. This is partly because Ashley herself—who has a stealth charisma and a fondness for phrases like “heavens to Betsy”—describes herself as a “jeans-and-T-shirt kinda gal.” It’s also because she appreciates the symbolism of an item long connected to American laborers and more recently to Black Lives Matter. “Livelihood is specifically about income inequality,” she says. “And racial inequality and income inequality are directly related.”

     “By the time her parents moved into the VP’s mansion in 2009, Ashley—who did her undergrad at Tulane, then earned a master’s in social work from the University of Pennsylvania—had a job serving kids in the foster-care system. It was disorienting, to put it mildly, to travel from a juvenile detention center to, say, Air Force 2. What did become increasingly clear was how little privileged Americans understood about life below the poverty line, where 13.5 percent of the U.S. resides. “I’d hear about five siblings sharing one burger,” she says. “How does a kid do homework when there’s no desk or lamp? One of the biggest things I’ve seen in my work is that a lot of social ills directly result from poverty.”

   Does it take a privileged daughter of the U.S. Vice-President, to explain to us how little we the privileged understand about the life and hardships of the one in seven who live in poverty? And will we opt for the role model of Ivanka Trump, who sells to the wealthy, or Ashley Biden, who works for the poor, and has done so for her whole career?

Snapchat: Think Differently

By Shlomo Maital  

  snapchat

Snapchat Founders: Bobby Murphy, Evan Spiegel

     Stanford University undergraduates Bobby Murphy and Evan Spiegel had an unconventional observation about social media – one that made them billionaires.

     “What makes a social network valuable?   In the Facebook era, everyone believed they became valuable by amassing more and more users. Obvious, right?  

     But Spiegel noticed, that in real life, most of us spend more of our time with just a few friends, whose value outweighs huge numbers of looser ties. So from their Stanford dorm rooms, they made Snapchat an app that would send DISAPPEARING photos and images, n a way that “more closely mimicked the dynamics of a real world conversation” (See Katie Benner, NYT, Feb 3).   It would raise the appeal of Snapchat as a service that people used with a small number of good friends.

     And were they ever right!!   Snapchat is now close to an IPO, and it will be valued at billions of dollars.

     It’s not just that the two founders practiced ‘think differently’.   They did think differently, but in a way that appealed to the way we live, think, interact and chat with friends.   Think differently is fine, but it has to be focused, built on solid foundations of the way people behave, and the way we observe people behave.

   Innovator — check out social media, and innovations in general. Can you think different? Can you alter the basic principles, so that the device or service more closely matches the way we behave in the real non-digital world? If so, you can be the next Snapchat startup moguls.

   

Blog entries written by Prof. Shlomo Maital

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