When Industry Analysis Goes Flat
Posted: December 27, 2012 Filed under: are you kidding me?, Corporate strategy, current events, economics, law and society, Markets, Vertical integration 1 CommentBarry Lynn, apparently some sort of John Kenneth Galbraith wannabe, has an amusingly cockeyed post over at the Harvard Business Review blog. He seems to think that state regulations protecting local beer distributors from vertically integrated competitors are the font of virtue, preserving needed diversity in the beer market by allowing craft and micro-brewers to get their product delivered. But if the big brewers were legally able (and motivated) to foreclose distribution of the small brands, they would be legally able to do it without vertically integrating into distribution (by requiring exclusivity).
A simpler analysis: When there were many competing major brewers, independent multi-brewer distributors made economic sense, since they eliminated needless duplication of sales and delivery of all those brands to retail establishments. With the consolidation of the beer industry into two giant companies that own all the big brands (and a shift from on-premises to at-home consumption), a single-brewer distribution firm can now internalize almost all those economies. Then the beer industry starts to look a bit more like the soft-drink industry, where two major firms own and develop all the major brands and we don’t blink an eye at their bottler/distributors having exclusive relationships with the upstream brand owners or even being vertically integrated with them. If your local Costco or supermarket won’t carry a micro-brew or an off-brand soda, it’s unlikely to be due to market power on the part of the distributors.
UPDATE: It seems that AB InBev, owner of Budweiser and many other beer brands, is indeed shifting to more of a product innovation strategy and running into distribution problems with these new products:
“That’s not to say that AB InBev has perfected the process. Profit this year was hurt by higher distribution and administration costs in the U.S. as the brewer struggled to keep up with demand for Platinum and Lime-A-Rita, which required extensive — and expensive — countrywide distribution.”
So maybe there are strategic reasons why AB InBev would want more control over its distribution pipeline.
David Stern and the Aging Emperor-CEO Syndrome
Posted: December 3, 2012 Filed under: are you kidding me?, current events, rants, Uncategorized 2 CommentsNBA Commissioner David Stern recently fined the San Antonio Spurs $250,000 and severely chastised them for the decision by Gregg Popovich, their near-legendary coach, to rest his aging stars at home rather than fly them to Miami for a meaningless (but nationally televised) tilt with the defending-champion Miami Heat. Is Stern losing his grip? Does he need an intervention and/or a forced retirement as he reaches his managerial dotage? While I haven’t heard of Commissioner Queeg–whoops, Stern–clicking steel balls in his hand or searching for the keys to the strawberries, a Caine Mutiny scenario may be approaching if he continues to deteriorate. Other firms with long-term, successful “emperor” CEOs have found their later years to be problematic. See Eisner, Michael (Disney) or Olson, Kenneth (Digital Equipment Corporation) or maybe Cizik, Robert (Cooper Industries).
Are You in The New-Wave Utility Business?
Posted: October 30, 2012 Filed under: competitive advantage, current events, Stakeholders Leave a commentA long time ago, in a blog far, far away, I outlined the idea of a “new-wave utility.” The idea was that some innovative high-growth service businesses were transitioning into utility-like systems whose large and diverse customer bases implicitly depended on them for ubiquity, reliability, and stability of offering. One example I mentioned in passing was Starbucks. Apparently, in Manhattan, Hurricane Sandy has revealed the truth of this classification. From the story in the link, access to bathrooms has been a key issue in the Big Apple. That’s less of a factor in L.A., but power outlets, WiFi, and table space in a congenial environment have certainly put Starbucks (and its smaller rivals such as the Coffee Bean and Tea Leaf Co.) in the category of utilities for the city’s horde of writers, students, and deal-makers.
Fallacious Reasoning on Clean Coal
Posted: September 11, 2012 Filed under: competitive advantage, current events 1 CommentOver at the Atlantic, Jordan Weissmann argues that the Obama administration’s claim to be pursuing an “all of the above” energy strategy is unrealistic because the EPA’s new CO2 emission rules will make traditional coal plants untenable while “clean coal” technology is uneconomical relative to natural gas. Fine.
But Weissmann goes on to argue that the reason why clean coal R&D is a big waste of money is because of the lack of a cap-and-trade policy that would put a price on CO2 emissions. That’s dead wrong. With a price for carbon dioxide, just as with the EPA’s technology or emissions standards, power producers would look for the cheapest alternative to coal. That would be natural gas (given the same forecasts Weissmann relies on). So the clean-coal subsidies are unlikely to pay off regardless of what kind of policy we pursue, be it a CO2 tax, cap and trade, or emissions or technology standards for power plants. Cheaper is cheaper. It’s amazing how often people fail to grasp principles of competitive advantage.
(We could, of course, come up with a convoluted policy to keep coal miners employed, similar to how the 1977 amendments to the Clean Air Act were set up to penalize low-sulphur Western coal so as to keep Eastern mines open, but I’m hopeful that we can avoid that kind of perversity this time. If you see laws or regulations that punish natural gas use in electric power, though, you’ll know my hopes have gone unfulfilled.)
Marginalism and the Higher Ed Paradox
Posted: June 19, 2012 Filed under: business school, current events, economics, education, human capital, teaching 48 CommentsBy now, you may be getting sick of reading articles and blog posts about the crisis in higher education. This post is different. It proposes an explanation of why students have been willing to pay more and more for undergraduate and professional degrees at the same time that these degrees are becoming both less scarce and more dumbed down. And that explanation rests on a simple and plausible economic hypothesis.
Excessive government paperwork–meta edition
Posted: May 15, 2012 Filed under: are you kidding me?, collective behavior, current events, law and society, political science, rants Leave a commentAn earlier post described the sclerotic impact of excessive regulatory documentation requirements on real-estate development projects. it turns out that the private sector isn’t the only victim of this tendency:
- The Pentagon got concerned that it might be suffering from hyper-cephalization–too many studies and reports on every topic.
- The Pentagon commissioned a meta-study to estimate the costs of all the studies and reports.
- The Government Accounting Office performed a meta-meta-study saying that the meta-study wasn’t performed correctly according to existing rules and standards.
I think we all know what the logical response to the GAO meta-meta-study is…
H/t Instapundit.
Crowd-sourcing Strategy Formulation
Posted: May 10, 2012 Filed under: collective behavior, competitive advantage, current events, entrepreneurship, incentives, innovation, networks, open innovation, organization design, research, Stakeholders, technology 24 CommentsThe current issue of McKinsey Quarterly features an interesting article on firms crowd-sourcing strategy formulation. This is another way that technology may shake up the strategy field (See also Mike’s discussion of the MBA bubble). The article describes examples in a variety of companies. Some, like Wikimedia and Redhat aren’t much of a surprise given their open innovation focus. However, we should probably take notice when more traditional companies (like 3M, HCL Technologies, and Rite-Solutions) use social media in this way. For example, Rite-Solutions, a software provider for the US Navy, defense contractors and fire departments, created an internal market for strategic initiatives:
Would-be entrepreneurs at Rite-Solutions can launch “IPOs” by preparing an Expect-Us (rather than a prospectus)—a document that outlines the value creation potential of the new idea … Each new stock debuts at $10, and every employee gets $10,000 in play money to invest in the virtual idea market and thereby establish a personal intellectual portfolio Read the rest of this entry »
The History Tax
Posted: May 10, 2012 Filed under: current events, economics, ethics, law and society, political science, rants, Uncategorized 2 CommentsTry to guess the context for this piece of writing. Is it part of a scholarly study on the history of convention centers? A tourist guidebook? Is it the catalogue to a museum display on convention-center architecture?
In order to attract growing numbers of conventions in the
second half of the twentieth century, cities incorporated
convention center construction within urban renewal and
redevelopment schemes, usually at the edge of core urban
areas where space would be available for construction of
large buildings with contiguous, flat-floor space.
A New Era of Cooperative Strategies in Cell Phones?
Posted: April 10, 2012 Filed under: competitive advantage, current events, game theory, intellectual property, Uncategorized 1 CommentI read about Microsoft’s acquisition of patents from AOL with some interest. They note that this reflects a price of $1.3M/patent and compare it to other recent escalations in the IP arms race. Analysts estimate that Google only paid $400k/patent in the $12B acquisition of Motorola Mobility. Nortel patents recently went for about $750k each. Of course, given the wide variance in the value of a patent, clearly the average is not particularly informative — it treats all of these patents as homogeneous which is certainly not the case. Nevertheless, the escalating prices do suggest that the arms race is unlikely to create much value for the firms (and certainly not for consumers).
However, buried in the stories is another rather interesting observation – some of the key players earn more from selling rivals’ handsets than their own. Read the rest of this entry »
2012 Strategic Management Society Conference in Prague
Posted: February 21, 2012 Filed under: conferences, current events 3 CommentsJust a reminder to anyone interested (or out of the loop): the deadline to submit something for the October 5-7 Strategic Management Society conference is in two days (Feb 23). This year’s theme is “Strategy in Transition” (here’s the call for proposals). I like SMS’s approach of requesting paper “proposals” (essentially extended abstracts rather than full papers): easier on both the reviewers and authors.
My verdict on SMS? I like the conference. It is quite pricey (the conference fee is a hefty $1000+), but generally the sessions are good. And most of all, it’s fun to interact and meet up with strategy colleagues, co-authors and friends in a somewhat smaller setting (not quite the zoo that the Academy of Management can be — SMS is far more targeted).
And, as a bonus, the locations tend to be excellent. I attended the Rome SMS conference in 2010 and this year’s conference will be held in Prague. Maybe we’ll live blog from the conference this year.
Jeremy Lin and Moneyball: The Problem of Identifying Talent
Posted: February 11, 2012 Filed under: are you kidding me?, competitive advantage, current events, economics, human capital 7 CommentsAfter watching Jeremy Lin (Knicks) score 38 points against the Lakers tonight, I’m now on the Lin bandwagon. I don’t really even follow basketball that closely, but this seems like an intriguing story.
How on earth did someone like this go unnoticed? Seriously. He happened to get an opportunity to show his stuff as Carmelo Anthony and Amare Stoudemire are injured – and boy has he delivered.
Here’s a kid who didn’t get recruited for college ball, despite a tremendous record in high school. He was a superstar at Harvard but went undrafted by the NBA after graduating from Harvard (in economics) in 2010. He played a few games for Golden State and Houston, but was cut by both. He has played D-league basketball this year, until a few weeks ago. As of last week, he did not have a contract.
But come on: is basketball truly this inefficient at identifying and sorting talent? The comparisons and transfer of ability across “levels” (high school-college-professional) of course is tricky, though you would think that with time there would be increased sophistication.
Now, four games of course doesn’t make anyone a star. But even if Lin proves to “just” be a solid bencher, it seems that talent scouts clearly undervalued Lin (who lived in his brother’s apartment until recently). How much latent talent is out there? (I think that at the quarterback position in professional football – there are significant problems in identifying talent, but that’s another story.)
There are of course also some very interesting player-context/team-fit, interaction-type issues here, and I’m not sure that this really gets carefully factored beyond just individual contribution (thus not recognizing emergent positive, or negative, player*player effects). It’ll be interesting to see what happens, for example, when Carmelo Anthony is added back into the mix.
Well, it’ll be interesting to see how all this plays out. There is in fact a sabermetrics-type, stats-heavy, Moneyball-like thing in basketball as well – called ABPRmetrics. I would be curious to know whether there are ways to statistically identify Lin-type undervaluation and potential, and whether phenoms like this lead to better metrics for identifying talent.
UPDATE: Here’s ONE analyst/statistician who saw Lin’s potential in 2010.
Urban Strategy Fads
Posted: January 14, 2012 Filed under: current events, economics, law and society, political science Leave a commentMario Polese provides a nice short history (up to the present) of oversold urban revitalization strategies in City Journal. Interestingly, these theories succeed with municipal decision makers for the same kinds of reasons that pop-strategy notions flourish with company managers: They fit the zeitgeist, they flatter the preconceptions and prejudices of the decision-making class, they claim to magically bypass the obstacles to success, and they enable the rent seeking of powerful coalitions. Their obvious theoretical and empirical drawbacks as all-purpose nostrums have little effect on their propagation, and their promoters often flourish despite a complete lack of proven efficacy.
One useful thought exercise for assessing urban development strategies is to imagine yourself the monopoly landowner in a city and think about what policies would maximize the value of your holdings (or rent stream). It quickly becomes apparent that for cities of any size or complexity, your chances of picking sectoral, much less firm-level, “winners” are very low, unlike the owner of, say, a shopping mall. The peculiar difficulty is that cities have both the “internal” complexity of closed systems and the “external” complexity of open systems in a turbulent environment.
Centrally planning complementarities and synergies within the city overwhelms the monopoly landowner’s knowledge and modeling prowess, because 1) the interactions are manifold and hard to decompose and 2) the city itself is what Hayek called an order (or cosmos) with different people pursuing different objectives, not an organization (or taxis) where a single hierarchy of objectives can be imposed; the denizens of the city don’t work for the landowner and are not deployable resources. The best you can do is provide the most effective sector-neutral institutions and infrastructure you can think of given your geographic and historic legacy. Any “natural” advantages a city has in specific sectors can be accommodated by policy (e.g., tourism-friendly policing in a natural tourist area), but trying to create such advantages from scratch seems foolhardy.
Deliberately positioning the city as a competitor against other cities then becomes something of a fool’s errand. The very sort of maneuverable, focused tradeoff-making needed to pursue competitive “good strategy” as an open system with shared objectives (a taxis) in a turbulent environment conflicts with the efficient policy neutrality needed to manage the city’s internal complexity as a cosmos.
Interesting question: How big does a piece of land have to be before planned synergy-mongering and focused strategy should give way to neutral governance? There are large master-planned communities put up by real-estate companies that include residential, commercial, and office components. I conjecture that that size is about the limit of effectiveness for guided, synergy-conscious development strategy.
MBA tuition bubble update: Thoughts on the brave new world of MBA education
Posted: December 20, 2011 Filed under: business school, current events, education, innovation, teaching 5 CommentsHere it is: MIT Announces Platform for Free Online Courses
MIT is planning to launch an open platform for free online classes, complete with certification for those who demonstrate mastery of their topics.
The key part of that sentence is the, “complete with certification” bit. I have to admit, that came faster than even I expected. As many who read this site will know, MIT has been running the OpenCourseWare site for 10 years which, according to this article, boasts 2,100 courses and has been used by 100 million people. Offering actual courses with instructor interaction and evaluation is new.
In related news, my good friend Scott Page (Leonid Hurwicz Professor of Complex Systems at Michigan) is going to teach a free online course on modeling in January that presently has over 10,000 people signed up. I understand the free online course in Technology Entrepreneurship being offered in Jan. by Stanford’s Chuck Eesley beats that by a factor of 3+. A couple of days ago, I commented to a colleague, “Well, when they figure out how to add the certification function, we’re in trouble.”
It is now official: we’re in trouble. In case it is not obvious, let me explain why. This technology removes a significant number of capacity constraints. Now, basically every student interested in, e.g., technology entrepreneurship can sign up for a course offered by one of the best researchers and most outstanding teachers at one of the world’s the top business schools … and obtain evidence of having completed it satisfactorily. Admittedly, the certification is not, for the moment, what it needs to be. For example, my guess is that verification of who is actually being assessed is not airtight. However, this technology will certainly evolve. At that point, why does Stanford need an admissions policy? Just let everyone who wants to take a shot at learning enroll and, then, let the chips fall where they may. Let’s face it, admissions procedures are notoriously inaccurate anyway.
Here’s a prediction about what will happen in the near future. With places like Stanford and MIT racking up tens of thousands of students for their free online courses, top-tier wannabes will have to follow suit. I can pretty much guarantee that sometime soon your dean will figure out that having thousands of students enrolled in your free online courses will be a necessary component of marketing the bricks-and-mortar program. The fear will be that schools that don’t offer such programs won’t be taken seriously. And, ultimately, I think, that fear will be well-founded. Also, given the fact that every university enjoys government subsidies of some kind or another, there will be major political pressure to provide the social good of low-cost, open access courses.
Then, eventually, the marketing device will actually become the core educational product. What will that wold be like? Will we see Stanford or HBS or Chicago become the Amazon.com of MBA education? At p = 0 pricing, does everyone but a few super-programs go out of business? If so, would that have the perverse effect of turning university-based b-schools into pure, state-supported research institutions?
Folks have long argued whether MBA education is more about learning things versus providing aspiring business managers with a signaling device (see, e.g., Ezra Zuckerman’s comments to my related post over at orgtheory.net) . If I had to make a conjecture, at least for the medium-term, I believe that the online course technology is going to make the split between the signaling and actual learning functions more pronounced. The bricks-and-mortar programs will be all about signaling and the online courses will be mostly about learning content. In their refined role, the bricks-and-mortar MBA will continue to be pricey and even more about being accepted into one’s aspirational social network, much like the private mens clubs of the 18th and 19th centuries. At the same time, those who are interested in learning graduate-level business content will be able to do so at relatively little cost online (though, this too will serve as a signal in its own right and may even be a requirement to admission to the social club, er, full-time MBA program).
What happens in the long-run is less obvious. After all, once the local, full-time MBA experience becomes pure signaling and social networking, it will face numerous substitutes. After all, there are lots of ways to burn money … and bona fide social clubs still exist. What then?
Finally, there is the question of what happens to the business research community? While I can easily imagine a superstars market evolving, in which the Scott Pages and Chuck Eesleys of the world educate a massive share of the market, I also see an educational role for those doing relevant, state-of-the-art research. Those of us who manage to establish international research reputations are, almost by definition, in possession of scarce, valuable knowledge. Therefore, I am reasonably optimistic that most of us will continue to make a living doing some facsimile of our present jobs. Whether richer or leaner, I can’t say — the monetization model of the future is opaque.
Jerry Fodor on the Darwin Wars
Posted: December 7, 2011 Filed under: collective behavior, current events, evolutionary theory, philosophy Leave a commentAnd, here’s a response by Alexander Rosenberg, how Jerry Fodor slid down the slippery slope of anti-darwinism, and Paul Griffiths on how evolution selects truth, and Richard Boyd on evolutionary psychology.
DOE makes $150m loan conditional on matching private funds – firm folds
Posted: December 3, 2011 Filed under: are you kidding me?, current events, entrepreneurship, incentives, innovation, open innovation, rants 2 CommentsHere is the WIRED link: EV Startup Aptera Motors Pulls the Plug: “The company that brought us a three-wheeled sperm-shaped two-wheeler shuts its doors after four years.” More here: The 190 MPG Aptera electric care that never was.
No kidding. My faith in government bureaucrats to make successful commercialization picks is, as we used to say in Nevada, lower than a snakes belly in a wagon rut. How many Department of Something-or-Other types do you think have the slightest idea of what Porter’s Five Forces are? And that’s a 30-year-old framework in strategy. Don’t even get me started on the open invitation to political corruption that these policies tend to create.
Those who worry about our dependence on foreign oil – a worry I share, by the way – often cite historic examples of government projects that successfully developed new technologies that would never have seen the light of day (or, at best, would have seen it decades later) had the country relied on the private sector to do it. The Manhattan Project to develop the nuclear bomb during WWII is a favorite citation.
The problem we are seeing today is that the government is presently throwing money at firms claiming they can commercialize green technologies that, in reality, have not yet passed the basic development stage. You can’t get private investors to ante up when taxpayers are shouldering half the risk? That’s a very strong signal that those who spend their lives evaluating such things believe your technology is not ready for prime time. There is a big difference between government involvement in basic technology and government involvement in its commercialization.
Now, if folks are really serious about a Manhattan Project-style effort to, say, develop an efficient electric car, then let’s do it right! Get the smartest scientists from the top schools, fence them in at a top-secret facility in the middle of some desert, and don’t let them out until they succeed. I think that might work. And, I’m pretty sure the scientists’ home institutions would go for it.
Then, turn the technology over to the VCs to compete in the commercialization stage.
Can There Be Strategy in Distributed Movements? Linux and #OWS
Posted: November 19, 2011 Filed under: collective behavior, current events, incentives, innovation 6 CommentsAn an ongoing research puzzle for me has been how distributed movements, open source|wikipedia, mobilize collective action and get individual incentives and actions aligned. Is the apparent lack of “strategy” a virtue or a vice? For example, Linus Torvalds, founder of Linux, has argued that “brownian motion” drives Linux development:
<From: Linus Torvalds
Subject: Re: Coding style – a non-issue
Date: Fri, 30 Nov 2001 16:50:34 -0800 (PST)On Fri, 30 Nov 2001, Rik van Riel wrote:
>
> I’m very interested too, though I’ll have to agree with Larry
> that Linux really isn’t going anywhere in particular and seems
> to be making progress through sheer luck.Hey, that’s not a bug, that’s a FEATURE!
You know what the most complex piece of engineering known to man in the
whole solar system is?Guess what – it’s not Linux, it’s not Solaris, and it’s not your car.
It’s you. And me.
And think about how you and me actually came about – not through any
complex design.Right. “sheer luck”.
Well, sheer luck, AND:
– free availability and _crosspollination_ through sharing of “source
code”, although biologists call it DNA.
– a rather unforgiving user environment, that happily replaces bad
versions of us with better working versions and thus culls the herd
(biologists often call this “survival of the fittest”)
– massive undirected parallel development (“trial and error”)I’m deadly serious: we humans have _never_ been able to replicate
something more complicated than what we ourselves are, yet natural
selection did it without even thinking.<….later in thread…>
A strong vision and a sure hand sound like good things on paper. It’s just
that I have never _ever_ met a technical person (including me) whom I
would trust to know what is really the right thing to do in the long run.Too strong a strong vision can kill you – you’ll walk right over the edge,
firm in the knowledge of the path in front of you.I’d much rather have “brownian motion”, where a lot of microscopic
directed improvements end up pushing the system slowly in a direction that
none of the individual developers really had the vision to see on their
own.And I’m a firm believer that in order for this to work _well_, you have to
have a development group that is fairly strange and random.To get back to the original claim – where Larry idolizes the Sun
engineering team for their singlemindedness and strict control – and the
claim that Linux seems ot get better “by luck”: I really believe this is
important.The problem with “singlemindedness and strict control” (or “design”) is
that it sure gets you from point A to point B in a much straighter line,
and with less expenditure of energy, but how the HELL are you going to
consistently know where you actually want to end up? It’s not like we know
that B is our final destination.In fact, most developers don’t know even what the right _intermediate_
destinations are, much less the final one. And having somebody who shows
you the “one true path” may be very nice for getting a project done, but I
have this strong belief that while the “one true path” sometimes ends up
being the right one (and with an intelligent leader it may _mostly_ be the
right one), every once in a while it’s definitely the wrong thing to do.And if you only walk in single file, and in the same direction, you only
need to make one mistake to die.In contrast, if you walk in all directions at once, and kind of feel your
way around, you may not get to the point you _thought_ you wanted, but you
never make really bad mistakes, because you always ended up having to
satisfy a lot of _different_ opinions. You get a more balanced system.
So the question for me has been if this is just an accidental feature of a distributed movement or can we actually drive collective action this way?
The recent emergence of #OWS provides an interesting case study unfolding in real time. Fast Company has a nice entry about how the movement came about:
And not posting clear demands, while essentially a failing, has unintended virtue. Anyone who is at all frustrated with the economy–perhaps even 99% of Americans–can feel that this protest is their own.
So is this the way to develop strategy?
A private Euro bailout–now with Italian flavor
Posted: November 2, 2011 Filed under: current events, international, rants, Uncategorized 2 CommentsNo matter how annoying the European debt-crisis soap opera has become–reminding me of the old Saturday Night Live Weekend Update routine about Generalissimo Francisco Franco still being dead–there’s no way to pretend that it isn’t going to cost us here in the land of the free and the home of the brave. Even before the Euro leaders huddled and brought forth their bailout mouse (getting their banks to “voluntarily” take a 50% haircut on Greek debt so as to avoid triggering the credit-default swaps that a formal default would entail, then promising to make the banks whole with taxpayer money), skeptics were predicting its failure. Now the PASOK government in Greece has scheduled a referendum on its austerity end of the bargain, and the likelihood of a rejection by Greek voters has spooked the markets more. New Eurozone manufacturing numbers are dire, suggesting another slowdown, lower tax revenues, increased deficits, rivers turning to blood, cats and dogs living together, and so on.
“So what?” you ask, with a Gallic shrug or perhaps some Teutonic schadenfreude. Well, the IMF, heavily backed with U.S. tax dollars, is in on the deal and will probably be hit up for more money later. What’s more, some of our banks have exposure to European sovereign debt and I’m not confident that equity or loss reserves will turn out to be adequate in all cases, given our past experience here with regulatory diligence (and given the regulators’ professional courtesy toward fellow governments, treating sovereign debt as “safer” than, say, bonds from cash-laden private companies). And finally, a big recession-and-default contagion in Europe is guaranteed to chop into the profits of U.S. and Asian firms, crippling confidence, investment, and hiring.
The central bankers and technocrats and politicians are not going to be able to stop this; they’ll ride out the crisis and take credit if everything works out and duck the blame if it doesn’t.
But fear not. Because I Have a Plan.
Steve Jobs’ deification serves a very basic and fundamental human need
Posted: October 27, 2011 Filed under: current events, psychology, sociology | Tags: Apple, CEOs, deification, Steve Jobs 12 Comments“I am not that surprised that an academic of entrepreneurship (are you kidding me?) would lead a story about one of the world’s best innovators and CEO’s about that he actually and in fact ! OMG had body odour as a teenager because of his diet, not to mention the rest of your embarrassing piece. Forbes would be best sticking with writers that are inspired by such great entrepreneurs as Steve Jobs, and not with writers such as this, who are unhappy they have not had the courage to ‘live the life they love and not settle’ and so sit in front of their computer with not much else to do but trying to bring others down. Shame on you Mr Vermeulen”.
This is just one of the comments I received on my earlier piece “Steve Jobs – the man was fallible” (also published on my Forbes blog). Of course, this was not unanticipated; having the audacity to suggest that, in fact, the great man did not possess the ability to walk on water was the closest thing to business blasphemy. And indeed a written stoning duly followed.
But why is suggesting that a human being like Steve Jobs was in fact fallible – who, in the same piece, I also called “a management phenomenon”, “fantastically able”, “a legend”, and “a great leader” – by some considered to be such an act of blasphemy? All I did was claim that he was “fallible”, “not omnipotent”, and “not always right”, which as far as I can see comes with the definition of being human?
And I guess that’s exactly it; in life and certainly in death Steve Jobs transcended the status of being human and reached the status of deity. A journalist of the Guardian compared the reaction (especially in the US) to the death of Steve Jobs with the reaction in England to the death of Princess Diana; a collective outpour of almost aggressive emotion by people who only ever saw the person they are grieving about briefly on television or at best in a distance. Suggesting Princess Diana was fallible was not a healthy idea immediately following her death (and still isn’t); nor was suggesting Steve Jobs was human.
We are inclined to deify successful people in the public eye, and in our time that certainly includes CEOs. In the past, in various cultures, it may have been ancient warriors, Olympians, or saints. They became mythical and transcended humanity, quite literally reaching God-like status.
Historians and geneticists argue that this inclination for deification is actually deeply embedded in the human psyche, and we have evolved to be prone to worship. There is increasing consensus that man came to dominate the earth – and for instance drive out Neanderthalers, who were in fact stronger, likely more intelligent, and had more sophisticated tools – because of our superior ability to organize into larger social systems. And a crucial role in this, fostering social cohesion, was religion, which centers on myths and deities. This inclination for worship very likely became embedded into our genetic system, and it is yearning to come out and be satisfied, and great people such as Jack Welch, Steve Jobs, and Lady Di serve to fulfill this need.
But that of course does not mean that they were infallible and could in fact walk on water. We just don’t want to hear it. Great CEOs realize that their near deification is a gross exaggeration, and sometimes even get annoyed by its suggestion – Amex’s Ken Chenault told me that he did not like it at all, and I have seen that same reaction in Southwest’s Herb Kelleher. Slightly less-great CEOs do start to believe their own status, and people like Enron’s Jeff Skilling or Ahold’s Cees van der Hoeven come to mind; not coincidentally they are often associated with spectacular business downfalls. I have never spoken to Steve Jobs, but I am guessing he might not have disagreed with the qualifications “not omnipotent”, “not always right” and, most of all, “human”.
Interdisciplinary NSF Solicitation
Posted: October 20, 2011 Filed under: computer science, current events, economics, innovation, sociology Leave a commentHere’s an interdisciplinary NSF program solicitation that may interest strategy scholars.
An important research interaction has emerged at the interface of computing and economics and social sciences. The synergy between these fields creates a rich opportunity for studying questions that involve interconnected systems with economic and social aspects. This research interaction has already led to the identification of a number of underlying principles and research themes. These include network structures in economic interaction, theories of learning in the context of such networks, welfare properties of equilibria, the design of mechanisms with constraints, the complexity of computing equilibria, the robustness of equilibria, and the roles of information, reputation, and trust in economic and social interactions. These principles provide lines of attack on a set of important applications. These include the emergence of new kinds of on-line markets, the roles of economic issues in the architecture of the Internet, the design and analysis of markets in the developing world, and the roles of social and economic networks in innovation and knowledge creation.
waiting in line for an iphone 4S
Posted: October 14, 2011 Filed under: current events, live blogging, what does this have to do w/ strategy? Leave a commentThe Apple iPhone launch today is setting records. I’ve never stood in line for a product. But here I am, waiting in a thankfully short line for my iPhone 4S. Sorta ridiculous. It feels like the line is an homage of sorts to Steve Jobs. Or something like that.
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