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Archive for November, 2008

Quotable Quotes: Charles Darwin

Sunday, November 30th, 2008

darwin.jpgCharles Darwin is best know for his Theory of Evolution and his amazing work in that field, but much of that work applies equally well to business—only not in the generally accepted way.

“A man who dares to waste one hour of time has not discovered the value of life.” (Time to think and dream does not count as waste.)

“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.” (As companies who promoted closed systems learned—to their detriment and eventual extinction.)

“…it is always advisable to perceive clearly our ignorance.” (Which, one can but hope, our fearless corporate leaders will do in the future, since it a prerequisite for the next thought…)

“It is not the strongest of the species that survive, not the most intelligent, but the ones most responsive to change.” (Change. Maybe that can include a focus on something other than short-term and ‘maximizing shareholder value’. Wall Street, are you listening?)

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Image credit: flickr

mY generation: Black Friday

Sunday, November 30th, 2008

See all mY generation posts here.

Saturday Odd Bits Roundup: Corporate Culture

Saturday, November 29th, 2008

First up today is a review from Knowledge @ Wharton Of Dov Seidman’s HOW: Why How We Do Anything Means Everything … in Business (and in Life). The book focuses on building a corporate culture where “”how” matters more than “what” in business, and how “should” matters more than “can.”” Seidman believes that “companies and their people can operate in both a principled and profitable way.” He believes that “A leading company should be a company of leaders.”

Next, and interesting interview on IT World with CIO Tony Scott who is charged with creating a culture of innovation a la Google at Microsoft—wow, talk about a challenge!

Third, a look at Charles Liang, co-founder and chief executive of $600 million Super Micro Computer, a 15-year-old computer maker with 850 employees. Liang is a one-man management band, so the big question is what happens if he goes poof?

Finally, from Business Week, the opportunity to nominate your choice for the best—or worst—Manager of the Year. The worst category offers the most opportunity, but for a greater challenge think about who deserves best. Please share your nominations here, too.

Image credit: flickr

Book Review: Leadership And The Sexes

Saturday, November 29th, 2008

No question, men and women think differently—at work, at home and in every other situation.

And for years the argument has raged as to which approach is better; which thinking clearer; which to follow.

When ignored, the differences are the basis for miscommunication and the resultant misunderstandings, dissatisfaction, frustration and anger.

In rare shows of common sense, some companies focus on understanding the differences, sharing the intelligence across their workforce and creating a stronger corporate culture that takes advantage of both sets of styles and skills. The result is more employee satisfaction, improved productivity, and better retention—all direct contributions to the bottom line.

If you’d like to get a handle on this Leadership and the Sexes: Using Gender Science to Create Success in Business is a good place to start. Authored by Michael Gurian, best-selling The Wonder of Boys, and Barbara Annis, a top consultant on gender issues, the book provide and in depth look at two decades of both scientific research and real-world anecdotal evidence that different isn’t better or worse, or, as Gurian says, “I think what we’ve been able to prove over the last 20 years is that there is not superiority or inferiority.”

Homogeny isn’t good, especially in business. To interact and do commerce with the real world requires not only diversity of thought—gender, racial, ethnic—but respect for and the ability to interact and work together for a common goal.

The major part of Leadership And The Sexes is in the form of five gender tools that walk you through a process to help you understand the differences and effectively deal with them.

  1. GenderTool 1 Improving Your Negotiating Skills with Both Genders
  2. GenderTool 2 Running a Gender-Balanced Meeting
  3. GenderTool 3 Improving Your Communication Skills with Men and Women
  4. GenderTool 4 Improving Your Conflict Resolution Skills with Men and Women
  5. GenderTool 5 Practicing Gender-Intelligent Mentoring and Coaching in Your Corporation

Written as pure brain science the book would be much drier, but the real-world examples and anecdotes offered save it from that and make for a more relatable read.

The need to acquire gender-intelligence is undisputed, whether for your company or yourself. No matter what you do or how powerful you are gender-intelligence will help you improve.

Finally, to give you an additional inducement to dig into this subject and absorb what it offers, here’s an interview with Michael Gurian.

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mY generation: Thanks, But No Thanks… giving

Thursday, November 27th, 2008

Jim Gordon shares his own view of the world here every Sunday. Today is the first of three holiday specials sure to tickle your funny bone and add to your fun. See all mY generation posts here.

Life, Kindness And Thanksgiving Wishes

Thursday, November 27th, 2008

turkey_pilgrim.jpgI’m a bit ambivalent about Thanksgiving along with many other holidays, such as Mother’s Day. While I understand and even agree with the idea of honoring a certain attitude, it seems hypocritical when it’s done only on that day.

Sadly, many of the people most vocal about a holiday are the same people whose actions during the rest of the year belie their holiday attitudes.

That said, here are my suggestions regarding Thanksgiving.

No matter how bad things are in your corner of the world give thanks that you are alive to read this. As long as you’re breathing you have a shot at changing your circumstances or improving someone else’s. Several years ago I had a terminally ill friend. Her final Thanksgiving act was to sign papers consigning all her useable body parts to an organ donor program; She died just a few days later. Her action infuriated her family, but she had made sure they couldn’t stop her choice.

Which brings us to my second suggestion.

Remember the words of Plato, “Always be kind, for everyone is fighting a hard battle,” and follow the advice of Anne Herbert, “Practice random kindness and senseless acts of beauty” daily.

Get in the habit of doing one small, unplanned thing every day—drop a quarter in an about-to-expire meter; pick up a piece of litter; help someone across the street. Just think of the difference if everyone did just one random act every day.

And courtesy of the Internet comes just the right thought to round out this post,

May your stuffing be tasty
May your turkey plump,
May your potatoes and gravy
Have never a lump.
May your yams be delicious
And your pies take the prize,
And may your Thanksgiving dinner
Stay off your thighs!

Happy Thanksgiving Everyone—be sure not to farctate on the farcing today!

PS Enjoy a Thanksgiving special edition of mY generation, Thanks, But No Thanks…giving.

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Image credit: sxc.hu

Wordless Wednesday: Leaders Of Our Times

Wednesday, November 26th, 2008

 turkey_mba.jpg

Click to learn what planning can do for you!

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Image credits: flickr

Wordless Wednesday: Planning Pays

Wednesday, November 26th, 2008

Be sure to check out my Thanksgiving salute to our current leaders

Image credits in order: flickr flickr flickr

Evolution Of Business: Selection

Tuesday, November 25th, 2008

Previously…. We reviewed in some detail how the lessons of evolutionary replication and variation may provide insights into business. This time we will begin exploring the third of the three basic elements of evolution:

  • Replication;
  • Variation;
  • Selection.

How Does Evolution Pick Winners?

The title question is a trick.

Evolution does not pick winners.

In the first post on this topic we discussed how the environment provides the fitness criteria.

Evolution simply generates a large number of variations. Each variation then “discovers” one specific segment of the environmental topography. With enough variations, evolution can draw a pretty good topographical map of the environment for that species.

In some sense, the species itself is the map of the fitness criteria of the environment. The more closely a species conforms or adapts to the topography of the environment, the better is its fit to that environment.

Good adaptation to the environment is the definition of fitness and survivability.
The simple figure below illustrates how an organism with five features fits its environment. Obviously, it drastically oversimplifies the selection process, but provides a useful starting point for our discussion.

Evolution does not use a calculator to determine fitness. It simply generates millions of organisms, and lets the survivors map the terrain.

We may want to think of each survivor as a single yes/no vote, but evolution does not tabulate the votes to select a winner. Each survivor is a winner in the evolutionary selection sweepstakes, so that winning organism gets to transfer its entire DNA to the next generation.

Evolution may be very harsh, but it is also extremely respectful of each organism. Each survivor wins in toto.

Measuring Fitness—Non-Linear Optimization

Mathematically, we can calculate the fitness of the organism to its environment by measuring the difference between feature points of the organism and corresponding points in the environment. One such calculation is a “least squares” error, which sums the squares of the differences, or errors, between each pair of points.

In addition to the squares algorithm, which measures how well two irregular lines fit each other, mathematicians have developed the linear programming algorithm, which actually calculates the best fit of any set of points (service features) with any other set of points (environmental features).

If this linear programming technique is so powerful, why don’t we just put all the business environmental variables into it and solve for the perfect service?

Because linear programming is much too simple to capture the complexities of the environment for any service.

To be solvable, a non-linear program requires “n” equations with no more than “n” variables, and all variables must be connected in linear relationships.

The real-world environment of survival has many characteristics which defeat a linear optimization program:

  • many variables are unidentified;
  • most variables have non-linear relationships;
  • many variables and relationships change over time;
  • many variables work in clusters.

Selection is an arms race.

Many variables are unidentified. In fact, one of the big challenges is to identify which variables participate (or are relevant) to the cluster of fitness criteria for a specific service.

  • Does gasoline color affect the demand for it? No, color doesn’t matter.
  • Does smell affect the demand for natural gas? Ironically, we know this is true. The smell of natural as is injected artificially, specifically to alert a person to a gas leak. Odorless natural gas is not saleable.

Most variables have non-linear relationships. That is, the service needs some amount of a specific variable, but too much or too little makes no difference to the ultimate fitness of the service. For instance, let’s look at one possible curve for the effect of price on demand.

Below some price, the demand for any product is extremely large. At the extreme low, a price of $0, people will simply use all that they can consume. This typically remains true until the price reaches some threshold value, at which demand now becomes sensitive to it. That is, each penny of increase in the price reduces the demand linearly. Finally, at the far right of the curve, the price reaches a point where the demand drops nearly to zero. This is the classical lazy-S adoption curve.

The price of gasoline is an excellent example of this.

  • Below $2.00 per gallon, the demand for gasoline is relatively flat. In other words, prices below $2.00 per gallon do not significantly affect our consumption.
  • Above $3.00 per gallon, we start to reduce consumption.
  • Above $4 per gallon, we dramatically reduce our consumption.

This has been irrevocably proven in Iran and Venezuela. Both countries subsidize gasoline, with prices well below $1 per gallon. In both countries demand far exceeds availability, so much so that other rationing mechanisms have developed—lines at distribution points, and black markets that offer gasoline at much higher (market) prices, but with easy availability.

At the other extreme, consider markets in Europe, where the price of gasoline is routinely $10.00 per gallon. The obvious results are smaller cars, lower gasoline consumption per capita, and much greater use of alternative transportation. The less obvious results are reduced sensitivity to further price increases. Further increases in the price of gasoline will have more limited effects on consumer behavior because consumers have already made significant adjustments.

All this proves that evolution’s selection process is active  and accurate in the business arena.

We have covered a lot of ground to date, with an introduction to evolution and its three basic functions.

Join us next week when we take a moment to review the fundamental parallels between evolution and business.

Wes Ball: Business Leadership Isn't About Providing More For Less

Tuesday, November 25th, 2008

Sadly, this is Wes’ last post; his heavy schedule and several new projects preclude him from continuing to write for Leadership Turn. Wes sends this message,  “Thank you all for visiting and reading my posts each Tuesday for the past several months.  I hope that you were challenged to think differently about leadership and business management.  My best wishes go to Miki and the entire B5 team.” I want to thank Wes for his insights on creating a leader-of-the-pack company; if they’ve proved useful to you please take a moment and say so. Finally, you can find more of Wes’ insights, as well as contact him, at the Ball Group.

wes-ball.jpgAre you shooting yourself in the foot by giving away more and more in an effort to grow/maintain your business during bad times?

A proven secret to getting more [for you] is offering less [to them].

  • When the San Diego Padres moved to their new stadium in 2004, they had one-third fewer seats to sell, yet they sold a million more tickets at 32% higher prices that first year.
  • Subway franchisees have learned the best way to boost total sales is to reduce seating.
  • Many retailers have discovered that a smaller parking lot increases store traffic.

When you want to boost demand for almost anything, just tell people that availability is limited.  Likewise, if you want more people to take you seriously and aspire to own what you sell, raise your prices.

Since all of the above are proven to work, why is it that as soon as the economy looks a little shaky, otherwise smart business owners and managers start trying to provide more for less?

There is an irrational fear that overtakes even the toughest and savviest business owners as soon as they start to project less demand ahead.

Instead of working on how to increase demand among the 85+% of those customers who still have needs on which they will spend, they focus on the 10-15% of customers who are willing to risk failure and loss rather than spend money and doing that undermines the value of their products/services to all customers.

Businesses start discounting.  They work on giving away more for less.  They make even well-heeled customers believe that their product or service is worth less.

Anyone, who has read my writing for more than a few weeks or who has seen any of the research I have conducted on what creates sustainable success, knows that I get really annoyed with marketers who needlessly give things away.

It harms them.  It harms their competitors.  It harms the category in which they sell.  And it harms the economy.

It also works to prolong economic downturns, because it not only undermines the financial well-being of many companies, but also makes customers believe that prices should stay that low, extending the pain for months longer than necessary.

Take a clue from the Padres.  If you have something worth selling, look for ways to give away less and grow your demand.

As counter-intuitive as it sounds, you will do better and gain more long-term.  You will also help the market in general.

Is your company reacting to the economy by doing more for less or less for more?

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