Wednesday, April 23, 2014

The Worst Business Decision Ever Made. . .That I Can Remember


In the May issue of The Atlantic magazine, "The Big Question" asked 17 entrepreneurs, journalists and academicians what they believe to be the worst business decision ever made.

That is not an easy question.  Human beings have been conducting business of all kinds for a long, long time.  I wondered, would the answers involve singular cultural moments, like the leader of a hunting and gathering band who dismissed farming communities as a passing phase?  How about a  Babylonian trader who went bankrupt because he wouldn't adopt the zero.  Maybe something terrible happened on the Silk Road to change civilization forever?  Or, perhaps it was China accidentally missing the Industrial Revolution?  If someone was claustrophobically, provincially American he might even offer Britain's introduction of the Stamp Tax, ultimately losing the American colonies, or Henry Ford's tragic misread of the American consumer.

I don't pretend to be a global business historian, but I love this kind of stuff and was anxious to see what the best and brightest gathered by The Atlantic would have to say.

Tuesday, April 8, 2014

The Outsiders: The One Thing CEOs Need To Do Well

From time to time I've sat on endowment committees with truly smart investors.  I don't pretend to be one of those myself, but quarter after quarter I watched with them as the money managers came and went, the stocks and bonds went up and down, the markets rose and fell, the pundits huffed and puffed--and I listened really hard to what these investors inevitably and consistently said:  Most of the value in a portfolio is created in the allocation of assets.  In other words, the very first thing we did as an endowment committee--set a risk profile and chose our asset classes--turned out to be the single thing that drove the most value long term.

You'd have thought it would have dawned on me that this powerful idea applied to operating businesses as well--the GEs, GMs, and Apples of the world--but no, sometimes it takes a sledgehammer.  And that's what I got hit with last weekend when I read William N. Thorndike, Jr.'s terrific 2012 book, The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.  (Thanks to my friend, Henry Ames, for gifting this great read to me.)

Thorndike opens with a simple question: "Who's the greatest CEO of the last fifty years?"  Some people might answer (incorrectly) Steve Jobs; others (like me, who are old enough to be a little confused on his dates: Alfred Sloan).  But the consensus answer is undoubtedly Jack Welch.  Welch ran GE for 20 years, achieved an annual compound return of 20.9%, and outperformed the S&P by 3.3 times.  Welch also played at business like Lawrence Taylor played linebacker (ok, for those of you who picked Steve Jobs: Ray Lewis) with a kind of high-energy, smashmouth style that got him magazine covers and lots and lots of press.  Welch was a hard-charging, gifted CEO, but compared to a guy named Henry Singleton, Thorndike says, Welch "wasn't even in the same zip code."

Wednesday, April 2, 2014

The Education of a (Diminishing) Baby Boomer

One of my favorite books is The Education of Henry Adams, published at Adams’ death in 1918 and winner of the Pulitzer Prize.  Henry was born in 1838, just as the railroad and telegraph were emerging, and long before the electrical grid, telephone or automobile that would be so much a part of American life by the time he died.  Adams grew up in a country half-slave and about to be torn asunder but died in one that was a unified, world power.  He saw factories in old age beyond anything he could have imagined as a child, and a nation of disconnected farmers turned into a mass market of connected cities.  These changes were so dramatic, Henry believed, “the old universe was thrown into the ash-heap” and something brand new had been created over the course of his lifetime.  “At the rate of progress since 1800,” Adams concluded, “every American who lived into the year 2000 would know how to control unlimited power.” 

We know better, of course, but were Adams to return and play with a smartphone, surf the Web or visit an automated factory, he might very well think we had arrived.

For me to have the same 79-year time horizon as Henry Adams, it would need to be 2036.  For me to have the same perspective I would need another 20 or 30 points of IQ, and it wouldn’t hurt to have grown up the grandson and great-grandson of Presidents.  Or, as Henry was, be a brilliant writer and historian.  Still, on the off-chance I don’t make it to 2036, I thought it would be worth surveying my own ash heap—or more properly now, my Municipal Solid Waste Landfill-- to see in 2014 what’s been tossed of my old world, and at the same time, what’s been created anew.

Sunday, March 23, 2014

The Leader as Horse-Trader

From time to time over the last 25 years we would find ourselves in a cafeteria somewhere, facing an anxious group of employees whose company we had just acquired.  A few of us would smile, tell a joke, talk about our grand goals, explain our vision for the future, and detail how our nervous new staff would be essential to achieving success.

It became apparent to me after doing this a couple of times, however, that nobody was listening, or listening much.  Many were wondering if they still had a job.   Others if the new benefits program would cover their prescriptions or upcoming surgery.  Some worried that they might have a new title, a new boss, a new office.  They might have to prove themselves all over again, after a decade or two of work.  Would we honor their bonus structure or time in service?  And, hey, what about accrued vacation!?

We like to think of leaders as setting big, audacious goals and leading troops up the mountain to victory.  That's certainly the part that gets written about, the superior person who has chosen a path worthy of being followed.  But there's another critical dynamic in organizations having to do with goals, and not much to do with the leader's big, audacious one.

Friday, March 14, 2014

Why Doesn't the Web Make Us More Productive?

I admit, I've been beating this horse for a while now and need to get on to other things, but I thought I'd launch one more salvo at what now passes for our best and brightest technology.

In a recent New Yorker blog post, John Cassidy asked "What Happened to the Internet Productivity Miracle?" and then carefully stepped through the causes and theories of what's going on. We started as optimists, he said; the Web was going to be the third Industrial Revolution. For a long while, too, it looked like we were right.  From 1973 to 1996, for example, output per hour grew by just 1.5% annually.  Then, as the Web became broadly adopted, productivity grew from 1996 to 2000 at 2.75% annually.  That's the difference between our standard of living doubling every 26 years instead of 48.  That's remarkable and heartening.

Even as the bubble was bursting things improved further, with annual productivity climbing 3.5% annually between 2001 and 2004.

And that's when we stepped in it.  2004.

That's when we held our first Web 2.0 conference to celebrate the coming world of social networking, wikis, video sharing, user-generated content and virtual communities.  And that's when it all went to heck in a handbasket.

From 2005 to 2012, annual productivity fell to just 1.5%--right back to pre-Web levels.  In 2011 output per hour rose just .6%--and in the last quarter of 2012, it went backwards.

Monday, March 10, 2014

Sometimes, A Blunt Instrument Will Do Just Fine

When we look to hire management talent for our companies we seek people who are “data-driven.”  When we launch businesses it’s critical to have high quality quant on market size and customer segments.  When we debate an important issue we insist on facts and figures.  In fact, we now live in a world of emerging "Big Data" where we struggle mightily to channel the volume, variety and velocity of information flows so as to improve our decision making.  
And yet, when it comes to the really big stuff, I sometimes wonder how data-driven we really are.
When I first wrote in 2011 about Ted Levitt's 1960 Marketing Myopia article (perhaps the single most influential marketing piece ever written), I remarked that it’s hard not to appreciate and occasionally invoke its lesson in conversation.  Levitt challenged leaders to define their businesses around the consumer, not their product.  “What business are we in?” was the essential question taught my business school class.  After all, we were informed, the customer in the hardware store does not really want a quarter-inch drill bit, he wants a quarter-inch hole.
Who wouldn’t want to drop that pearl of wisdom in a branding meeting?  It’s like hitting one of your misguided co-workers in the head with a blunt instrument.
However, a peek under the covers reveals that Marketing Myopia is just that--an extremely effective but still very blunt instrument.  

Sunday, March 2, 2014

Ruminations on the First Weekend in March

March 2014 came in like a penguin Saturday morning at 4 degrees F.  I ran anyway because I can layer-up for almost any temperature, but I do worry about my iPhone (which I wear on my arm) becoming so cold that it shuts down my Runkeeper app.  Stupid, I know, but in this age of big and little data, if I don't record my run it's almost like I didn't do it.  In fact, it's exactly like I didn't do it.

Call this crazy, but I heard a guy on the radio the other day say he is a fanatic about his to-do list, so much so that if he completes something that he didn't originally have on his list, he writes the task down and checks it off.  He says it just makes him feel good.  I keep a to-do list (see here), but I'm not so hung up on tracking and recording that you'd ever catch me doing that.

Well, hardly ever.

Tombstones and Donuts: Watching Over Pvt. Flint

I stopped by to see my old friend, George Washington Flint (buried near the utilities, back by the dumpster, behind the abandoned Dunkin Donuts on Route 1) on my way into Boston on Friday.  (See Tombstones and Donuts on Old Route 1.)

Saturday, February 22, 2014

The Competing Narratives of Silicon Valley

In his New York Times column on Sunday (2/15), Thomas Friedman lavished praise on Silicon Valley.  He’d spent 48 hours visiting some of the region’s hottest companies, including Box, Airbnb, and Google.  This left Friedman gushing, “What they all have in common is they wake up every day and ask: ‘What are the biggest trends in the world, and how do I best invent/reinvent my business to thrive from them?’ They’re fixated on creating abundance, not redividing scarcity, and they respect no limits on imagination.”
It was American innovation boosterism at its finest, and while I’m a big fan of American innovation (and Friedman, for that matter), he still had me scratching my head just a little at the histrionics.
Two days later I chanced upon a Valleywag column by Sam Biddle in which he had the same impression I had, though more strongly felt.  (See Thomas Friedman Visited Silicon Valley and Is Wrong About Everything.)

Monday, February 17, 2014

The Future Trumps the Past (Silicon Valley, Mount Vernon, our swingset. . .)

The other evening I looked out across the lawn and was startled to see that someone had removed our swing set. It was one of those big, wooden contraptions with a treehouse and slide, so you can imagine the effort it must have taken to steal it from right under our noses.

Wait. Then I remembered: About a year ago, with our three kids in junior and senior high school and nobody paying much attention to it, we had given the swing set away to a friend. All that fun, all those sunny afternoons pushing kids. Gone.

Still, if I looked closely, I could see that the grass was a slightly different color where all the wood chips had been. In a few years time, though, even that evidence will be gone.  Someday when we sell the house the next family will never know just how special that patch of ground once was.

Monday, February 3, 2014

A Freestyle Mentality: Keeping the Human Touch in Big Data

When I was growing up, people believed that there could never be a computer smart enough to beat a human being at chess.  Now, we know there may never be a human being smart enough to beat a computer.

What nobody anticipated, however, is that the very best chess "player" happens to be a combination of man and machine, or what the chess world calls Freestyle.  Man + computer beats computer.  There are several reasons for this, one being that humans can see where different computers disagree--not unlike a weather forecaster looking at three or four storm models--and work within the variations to achieve a better result.

Of course, if chess is ever fully "solved," like checkers is today, than the machine is fine all by itself.  But then, fully-solved problems have never been things human beings spend a lot of time worrying about.

Another example where human touch applied to data improves the solution is genealogy.  In the old days before the Web, it took a Herculean effort to build a credible, well sourced family tree.  Research dead-ends could be easily encountered just three and four generations back.  Data was hard earned, sometimes involving plane trips and convincing priests and town administrators to grant access to their precious archives.

Today, Big Genealogy is moving toward a single world tree, with all seven billion of us connected globally.  Seach your name and birth date and, voila, there's your tree.  It's not hard to envision the day when the act of building a tree will be among the least important tasks a genealogist undertakes.  (Even as I write this, a 23andMe email is chirping that it's found me a "4th cousin, with likely range to 3rd or Distant cousin.)

If you're lucky enough to have a family tree, though, you know that far too many of the names and dates are just that--bits of data.  These real people lived long, full, interesting lives but are now reduced to a few dates and places.

Monday, January 20, 2014

Entrepreneurs Escape Their Generation (and an occasional French brig-o’-war)

Nathaniel Silsbee
In William Strauss and Neil Howe’s entertaining book, Generations, the authors characterize Americans born around the time of the Revolution as the “Compromise Generation."

“The lived an awkward lifecyle,” the authors wrote.  “Compromisers were coddled in childhood, suffered little in war, came of age with quiet obedience, enjoyed a lifetime of rising prosperity, and managed to defer national crisis until most of them had died.”  I chuckled when I read this summary; imagine, a lifetime of peace and prosperity, sandwiched between the Revolution and Civil War.  Such awkwardness for this coddled cohort!

In 1792, the trading ship Benjamin departed Salem, Massachusetts, loaded with hops, saddlery, window glass, mahogany boards, tobacco and Madeira wine.  The ship and crew would be gone for 19 months, traveling to the Cape of Good Hope and Il de France.   All the while they bargained hard from port to port, flipping their freight several times “amid embargoes and revolutions,” naval historian Samuel Eliot Morison wrote, “slipping their cables at Capetown after dark in a gale of wind to escape a British frigate; drifting out of Bourbon with ebb tide to elude a French brig-o’-war.”  In 1794, the Benjamin returned to Salem with a cargo that brought 500% profit to its owners. 

The ship just happened to be captained by Nathaniel Silsbee, 19 years old when he took command.  His first mate was 20 and his clerk 18. 

Of course, these three daring (and soon-to-be wealthy) entrepreneurs were members of that awkward and coddled “Compromise Generation.”

Just in case you are wondering how to feel
Does it feel sometimes that we place too much emphasis on a generational view of Americans?  We seem extraordinarily concerned, for example, that we now have four generations coming together in the workplace—Boomers, Gen X, Gen Y and Millennials.  There is a huge amount of ink and pixels expended on defining the expectations of each cohort, and recommendations for how we can all live together.  (See here, here, and here for typical examples.  A Millennial reflects here.  A group of Gen Ys reflect here.  Gen X traits defined here. Etc. Etc. Etc.)

Thursday, January 9, 2014

Four Young Women: Wondering How Much We've Changed in a Century

The Alexander Hamilton U.S. Custom House, with young ladies Europe and
America flanking the entrance.
In 1907 the "World's Greatest Custom House" opened on Bowling Green at the former site of Fort Amsterdam, the center of Dutch Manhattan.  As the New York Times reported, it was the place "where all the world comes to be taxed"--perhaps not happily, but at least now splendidly.  Indeed, in a land before Federal income tax, the collection of tariffs was the single greatest revenue generator in America.  Now the country had the best of all worlds, an architectural wonder that also churned out nearly $200 million annually.

Today, the Alexander Hamilton U.S. Custom House hosts the National Museum of the American Indian (very cool and worth visiting), the Bankruptcy Court for the Southern District of New York (not cool, don't go there), and the National Archives in New York City.  But when I visited over the holidays, I was particularly interested in the four Daniel Chester French statues that look uptown from the front of the Custom House, my interest piqued after watching David Hartman and Barry Lewis take a fantastic "Walk up Broadway"--see here.)

French, born in New Hampshire and European-trained, is perhaps best known for his statue of Abraham Lincoln at the Lincoln Memorial in Washington, but for New Englanders he's also famous for the Minute Man at Concord and The John Harvard Monument at Harvard Yard.  (His works are spread around America, however, including the Marshall Field Memorial in Chicago, Alma Mater at Columbia University, James Oglethorpe in Savanah, and Thomas Starr King in San Francisco--see here for more.)

In 1902 French won the competition to design four prominent statues intended to be allegorical representations of the four trading continents, Asia, Europe, America and Africa.  The young ladies that the sculptor envisioned, each to be carved of Tennessee marble, would serve as greeters to the many nations entering the building.  The ideas and forms would be his, but approved by the Federal government.

I think it's fair to say that no sane sculptor would take on such a task today.  How could it possibly come out well?  What allegorical tale could an artist tell about an entire continent that wouldn't get dragged across the comments section of the online Post, crucified by Rush Limbaugh or pilloried in The Economist?  (See my post on memorials, donuts and statues here.)  Yet, 1902 was a different place in America, and Daniel Chester French was happy to characterize the continents in a way (one presumes) that reflected the general sentiments of upscale, commercial America and its government.

Thursday, January 2, 2014

2014: A Time Travel Rumination on the New Year

Many years ago, when my youngest brother was a little boy, he attended a meeting with my father at the local historical society.  There, a man shook my brother's hand and announced, "You have now shaken the hand of a man who shook the hand of a man who shook the hand of Abraham Lincoln!"  My brother stared in amazement at his hand.
In high school I studied the Civil War.  A few weeks later, we tackled World War I.  Those two wars seemed to me ages apart, in entirely different eons.  In one, ancient soldiers rode horses and wore funny hats.  In the other, ancient soldiers drove tanks and wore funny helmets.  The distance in time between the two events was, to me, like that between the Punic and Vietnam Wars.
As I arise on this snowy morning in the new 2014, I am reminded that the death of the Archduke is only six months away and the guns of August eight.  I realize too that I was in third grade when the Civil War ended.  Said another way, my living memory has now spanned the period between the Civil War and WWI, and it turns out they were not fought in different eons at all but in a very short, very connected period.  Brad Pitt was born the same year as Gettysburg.  We saw Google launch when the USS Maine sunk in Havana and we declared war on Spain.  Americans lost President Garfield to an assassin when Raiders of the Lost Ark premiered, and President McKinley when Apple introduced its first iPod.

Thursday, December 26, 2013

Recapping 2013, Resolving 2014

2013 was my sixth year of blogging, and it's still nigh impossible for me to predict which of my posts will do well and which will land with a thud.  Even writing about X-rated topics, which I tried back in 2008 (with Camouflage Marketing), didn't seem to have the je ne sais quoi to go viral.  Meanwhile, other posts, some of which were written just because the blog was looking lonely--a particularly poor reason for writing--took off.

The three best-read new posts in 2013 were The Cult of the Entrepreneur The Founding Fathers as Innovators and Surviving Little Entrepreneurism.  All three made me feel like a curmudgeon when I wrote them, but apparently there's room for a little ballast in the top-heavy hysteria of American entrepreneurism.

In the next tier down, Purchasing Worker Loyalty was very popular, and that was also one of my favorite posts to write because it dovetailed nicely with the book I'm researching.  It also got me back to my old hometown of North Dighton.  Likewise, Want Innovation?: Think Shovels!, about the Ames shovel collection at Stonehill College, was fun to research, and in a roundabout way (thanks to Greg Galer) got me to the Yankee Steam-Upwhere I got to see my first Corliss steam engine.  Very cool.

Thursday, December 12, 2013

Bring on the Drones (I Need a Little Human Contact)

What's wrong with this picture?  Yes, it's overexposed.  And underexposed, too.  Badly composed.  And the plant might be dying.  But really: what's wrong with this picture?

See that box of oranges and grapefruits on the driveway?

Wait.  Let me put my Google Glasses on.  That'll help.
There.  Thanks, Google Glasses.

Monday, December 9, 2013

Answer YOUR Email? Ha. (Power in a Digital World)

One new form of digital power is
having your head explode.
When I was a CEO I could send an email to anyone in the organization and have it answered quickly, sometimes instantaneously.
 
I mistakenly came to believe that’s how email worked.  Worse yet, that everyone liked me.

When we were acquired and I suddenly found myself dealing with a huge organization, most of it above me, the pace of response to my emails slowed.  Substantially.  From the "speed of text" to the "speed of snail mail."  From minutes to days.  Later, when I became a consultant, my email slowed further still.  In fact, some of my consulting emails have never been answered.

It turns out that the “speed of email response” is a phenomenon so consistent and predictable that we can draw accurate organizational charts simply by measuring it.  

Where the email chart is at odds with the org chart, we have found someone whose real status (good or bad) differs from his or her title.  In other words, that’s the way the organization really works.

Sadly, instead of being liked, the arc of my email trajectory simply demonstrated a modern fact of business life:  If I have Power, you’re answering my email, and pronto.  But I'll answer yours more slowly and curtly, cut the email string whenever I choose, and will occasionally ignore you completely.

Such is the language of digital power.  I still know how important you are by your corner office, and your black turtleneck and jeans--but now I can smell you coming a hundred servers away.  Or not, as the case may be.

Wednesday, December 4, 2013

The Only Two Management Ideas You’ll Ever Really Need

We built and moved into our “new” home some twelve years ago.  Despite the fact that it’s sitting on a granite ledge, the house is settling.

12 years of settling means two things: Stuff that was once tight is now loose, and stuff that was once loose is now tight.  Doors, cabinets, and locks come to mind, but this phenomenon affects everything.

Down in the basement (where “loose” is creating hairline cracks in the cement floor) sit my tools.  You can accumulate an awful lot of tools in a lifetime:  Four or five different kinds of hammers.  25 screwdrivers.  Even a Dremel tool, which is like holding a small Tasmanian Devil by the hindquarters, and seemed like such a useful thing when I bought it.  

Among all these tools, however, sit two that are in such regular use that they almost never get put away: WD-40 and duct tape.  

In a world of constant settling, where everything is either getting tighter or looser, these are the two tools of choice.

Friday, November 29, 2013

Pumpkin-Headed Christmas Creep

Over on the Historical Society Blog you'll find a repost of last year's "Christmas Creep" article.

I notice this morning that many retailers are reporting brisk Thanksgiving Day sales.  It seems pretty obvious that the old holidays are merely cover for the new Selling Season: Christmas now begins at Halloween, a holiday designed to teach children how to ask for gifts, and then migrates to Thanksgiving, where families check to see if they can dine together peacefully, and exchange gift lists.

That makes Halloween "PreMas" and Thanksgiving "PracticeMas," both of which lead up to Christmas.

After that, of course, comes the Fourth Sunday Before Super Bowl--and the new year begins!

Modern America really has two big seasons: Football and Christmas, broken up by March Madness.

Oh, and the 4th of July.  We don't want to forget that.  When else would be buy our new cars?

Thursday, November 21, 2013

A Few Pictures from the 150th Dedication of the Gettysburg Address



The dedication ceremony this week honoring the 150th anniversary of the Gettysburg Address featured keynote speeches from Pulitzer Prize-winning historian James McPherson and Secretary of the Interior Sally Jewell, and a Naturalization Ceremony conducted for 16 new citizens by Associate Justice Antonin Scalia.  Lauren Pyfer, a junior from Upper Dublin High School near Philadelphia and winner of the "In Lincoln's Footsteps" essay contest, delivered her modern interpretation of the Gettysburg Address to appreciative applause.

Of course, President Lincoln delivered 270 words, give or take.  Edward Everett was nowhere to be found--not a bad thing given the cold morning breezes.

Kudos to the National Park Service, the Gettysburg Foundation,  the Lincoln Fellowship of Pennsylvania, and Gettysburg College for supporting such a moving event.

We walked in the footsteps of Lincoln the day before the dedication ceremony, from the Lincoln Train Depot to the Wills House to the Gettysburg National Cemetery.  This is the Soldiers National Memorial, not far from where Lincoln spoke, framed against a perfect fall sky.

Monday, November 11, 2013

Another Look at the Industrial Revolution: Visiting Lowell

A thread spool sculpture marks the entrance to the Boott Cotton
Mills Museum in Lowell.
One of the great things about researching the Industrial Revolution from a home in the Boston area is that it's hard not to simply drive smack into the Revolution on a regular basis.  My posts to this blog have included local sites like the Ames Shovel collection at Stonehill College in Easton, the Yankee Steam-Up in East Greenwich, Rhode Island (at the New England Wireless and Steam Museum, located not far from historic Slater Mill), the steampunk exhibit at the old Waltham Watch Company (now the Charles River Museum of Industry and Innovation), the Mount Hope Company in North Dighton, and Haverhill's very cool mural and painted boot markers.  The other day, too, I finally drove all 22 miles to the City of Lowell, in some ways the most important site of all.