Welch: Importance of Taking and Spreading Best Employee Ideas

Sam Walton may have been the grand master of absorbing good ideas of others and then spreading the ideas across the company. Another master was Jack Welch:

 

(p. 383) Getting every employee’s mind into the game is a huge part of what the CEO job is all about. Taking everyone’s best ideas and transferring them to others is the secret. There’s nothing more important. I tried to be a sponge, absorbing and questioning every good idea. The first step is being open to the best of what everyone , everywhere, has to offer. The second is transferring that learning across the organization.

 

Source:

Welch, Jack. Jack: Straight from the Gut. New York: Warner Business Books, 2001.

See also pp. 197-198 for Welch’s description of the specifics of how Wal-Mart got this job done.

For even more details, see: Walton, Sam. Made in America: Doubleday, 1992.

 

Jefferson Believed: “redemption lay in education, discovery, innovation, and experiment”


Source of book image: http://images-eu.amazon.com/images/P/0060598964.01.LZZZZZZZ.jpg

(p. 43) Jefferson was not a man of the Enlightenment only in the ordinary sense that he believed in reason or perhaps in rationality. He was very specifically one of those who believed that human redemption lay in education, discovery, innovation, and experiment. There were many such in the American Revolution. Thomas Paine spent much of his career designing a new form of iron bridge to aid transportation and communication. Dr. Joseph Priestley, another man who fled royalist and Anglican persecution and who removed himself from England to Philadephia after a “Church and King” mob had smashed his laboratory, was a chemist and physician of great renown. Benjamin Franklin would be remembered for his de- (p. 44) ductions about the practical use of electricity if he had done nothing else. Jefferson, too, considered himself a scientist. He studied botany, fossils, crop cycles, and animals. He made copious notes on what he saw. He designed a new kind of plow, which would cut a deeper furrow in soil exhausted by the false economy of tobacco farming. He was fascinated by the invention of air balloons, which he instantly saw might provide a new form of transport as well as a new form of warfare. He enjoyed surveying and prospecting and, when whaling became an important matter in the negotiation of a commercial treaty, wrote a treatise on the subject himself. He sent horticultural clippings from Virginia to the brilliant French consul Crevecoeur in New York, comparing notes on everything from potatoes to cedars. As president, he did much to further Dr. Edward Jenner’s novel idea of cowpox vaccination as an insurance against the nightmare of smallpox, helping Dr. Benjamin Waterhouse of Boston—the initiator of the scheme in America—to overcome early difficulties in transporting the vaccine by suggesting that it lost its potency when exposed to wamth. Henceforward carried in water-cooled vials, the marvelous new prophylactic was administred to all at Monticello. (Not everything that Jeffrson did on his estate was exploitation.) For a comparison in context, we might note that Dr. Timothy Dwight, then president of Yale and to this day celebrated as an American Divine, was sternly opposed to vaccination as a profane interference with God’s beneficent design.

Christopher Hitchens. Thomas Jefferson: Author of America (Eminent Lives). New York: HarperCollins Publishers, 2005. ISBN: 0060598964

The Best Company at Making Cars Powered by Steam

Danny DeVito was Larry the Liquidator in the movie “Other People’s Money.” The source of the image of the VHS tape box cover is Amazon.com.

A key passage from Larry the Liquidator’s great speech in “Other People’s Money”:

This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. It’s too late for prayers. For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead. You know why? Fiber optics. New technologies. Obsolescence. We’re dead alright. We’re just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.

You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let’s have the intelligence, let’s have the decency, to sign the death certificate, collect the insurance, and invest in something with a future.

For a transcript, and audio version, of the full speech by Larry the Liquidator, see:
http://www.americanrhetoric.com/MovieSpeeches/moviespeechotherpeople’smoneydevito.html

Larry would not have been surprised by the following account of steam automobiles that mentions that the last maker of steam-powered cars, Doble, “managed to hang on until the early 30’s, building what many consider to be the finest of all the steam cars.”

The notion of steam cars seems quaint today, but they were a natural offshoot of an age when much of industry was powered by pressurized steam. By the end of the 19th century, steam engines were ubiquitous, running everything from factories to ships. As a mature, well-developed technology, steam was a logical competitor to electricity and gasoline as a power source for early cars.

Electric vehicles disappeared relatively quickly, a result of their batteries’ meager storage capacity and high weight. The popularity of early gasoline cars was hampered by the arduous, sometimes dangerous, hand-crank starting routine.
As a result, in the early decades of the 20th century steam managed to hold on against the “explosive” engine — as Stanley advertising derisively referred to the internal combustion motor. More than 125 companies manufactured steam automobiles. Among American companies, Stanley, White and Locomobile were the most successful, with Stanleys priced higher than mass-market Fords but below the luxury brands of the time.
Even the most innovative makers of steam cars were not impervious to developments in other technologies: the introduction of the electric starter on the 1912 Cadillac sealed their fate. While gasoline-powered cars became “transportation on demand,” steam cars still needed up to half an hour for the entire process of lighting the burners and developing sufficient pressure before driving away.
White dropped out of the steam business, and Stanley’s operation in Newton, Mass., was gone by the mid-1920’s. Only Doble, in Emeryville, Calif., managed to hang on until the early 30’s, building what many consider to be the finest of all the steam cars.

For the full article, see:
ROB SASS. “Autos on Monday / Collecting; When These Boil Over, They’re Ready to Drive.” The New York Times (Mon., February 27, 2006): D9.


The Stanley Rocket Racer that held the land-speed record for four years for cars of all power plants, starting in 1906. It reached a speed of 127.659 mph. Source of photo, and caption information: NYT article cited above.

High Tech

Aqueduct1.jpg
Pontcysyllte aqueduct. Source of image: online version of WSJ article quoted and cited below.

(p. P12) Of all the stupendous engineering structures produced by the Industrial Revolution, the Pontcysyllte is one of the most extraordinary: a ribbon of water in the sky. A narrow cast-iron water-filled trough, over 1,000 feet long, strides out across a steep-sided Welsh valley on a series of slender stone piers. Canal boats drift across, reaching a height of 126 feet above the valley floor. I first made this trip as a child and it was exhilarating and terrifying at the same time. It still is. Because while there is a towpath and handrail on one side of you, on the other there is nothing but the thin lip of the trough, rising to only a few inches above the waterline. It does not look strong enough. You feel you are going to plunge over the edge.
This is one of those marvels of engineering and architecture that really should not exist. Economically, it never made any sense. A product of Britain’s canal-building mania of the 1790s, it opened in 1805 and found itself on a route that went nowhere much, and then stopped. Having been built, it should not logically have survived. It is sited on a truncated stretch of waterway, a puzzling fragment of a much larger, never-completed scheme. This was known as the Ellesmere Canal, intended to link the mighty rivers of Mersey and Severn via the coal and iron ore mines of North Wales. But no sooner had engineers Thomas Telford and William Jessop completed this hugely ambitious structure — along with other expensive aqueducts and tunnels, piercing the hills and leaping the valleys to get to this point — than financial reality took hold and the project was halted. Commercial boat traffic on the inconclusive sections that were built was always light, and had ceased by 1939. The waterway was officially abandoned to navigation in 1944. But salvation was at hand.
It, and its matchless aqueduct, survived for two reasons. Almost by accident, it provided a fresh water supply from the Welsh hills to the towns and cities of northwest England. And it became an early campaign victory, a symbol, for Britain’s nascent waterways preservation movement in the 1940s. The canal network was being rediscovered by a generation of postwar nostalgists, alert both to industrial heritage and to the fast-vanishing gypsy-like lifestyle of the traditional boating families in their “narrow boats” (never called barges).

For the full commentary, see:
Hugh Pearman. “MASTERPIECE; A Marvel That Shouldn’t Exist; In Wales, a fusion of architecture, engineering and nature.” The Wall Street Journal (Sat., February 4, 2006): P12.
Aqueduct2.jpg
Source of image: online version of WSJ article cited above.

Fascism’s “Most Notable Achievement Was that It Survived as Long as it Did”





Source of image of book cover: Amazon.com.





Some experts on National Socialism have concluded that its economy was not as efficient as usually believed. According to a recent expert, facism also was not a very efficient economic system (in spite of its oft-mentioned reputation for the trains running on time):


(p. B36) Yet for all the personality cult, the regime’s most notable achievement, as Mr. Bosworth sees it, was that it survived as long as it did. Virtually irrespective of where it set its sights — culture, science, economics, let alone the military — its performance persistently fell short of its discredited Liberal predecessor’s.





Note: in the review, “liberal” refers to 19th-century liberals. E.g.:


(p. B36) Like their 19th-century peers from Belgium to Romania, Italian Liberals yearned for a common flag, parliament, economy, identity, even empire. To a point, the truths held to be self-evident north of the Alps worked in Italy, too. But the transition to constitutional government was a work in progress, where progress needed all the help it could get.
By 1914, it was clear that it would take more than a constitutional monarchy, a railroad, a gold-based currency and African colonies to overcome the limits imposed by geography, culture and history. Eager to play with the big powers, Italians were not only poor, illiterate and economically underdeveloped, they were also allergic to any state, modern or otherwise. This would include dictatorship.

For the full review, see:
DAVID SCHOENBAUM. “Books of The Times | ‘Mussolini’s Italy’; Where Fascism Was Stylish and Vicious, if Ineffectual.” The New York Times (Fri., March 3, 2006): B36.

The book is:
R. J. B. Bosworth. MUSSOLINI’S ITALY: Life Under the Fascist Dictatorship, 1915-1945. Penguin Press, 2006. Illustrated. 692 pages. $35. ISBN: 1594200785

BosworthJB.jpg R.J.B. Bosworth. Source of image: NYT book review quoted and cited above.

Occupational Licensing Does More Harm Than Good

Source of book cover image: http://www.upjohninst.org/publications/titles/lo.html

(p. C3) It is well known that doctors, dentists, and lawyers must be licensed to practice their professions. But what about occupational therapists, manicurists and barbers? How about fortune tellers, massage therapists, shampoo assistants, librarians, beekeepers, electrologists and movie projector operators? These are just a sampling of the hundreds of occupations that require a license in at least some states or counties.

In a new book, “Licensing Occupations: Ensuring Quality or Restricting Competition?” (Upjohn Institute, 2006), Morris M. Kleiner, an economist at the University of Minnesota, questions whether occupational licensing has gone too far. He provides much evidence that the balance of occupational licensing has shifted away from protecting consumers and toward limiting the supply of workers in various professions. A result is that services provided by licensed workers are more expensive than necessary and that quality is not noticeably affected.
. . .
Several studies have examined the effect of license requirements on performance in occupations like dentists and teachers. In one study, Professor Kleiner and a colleague, Robert T. Kudrle, found that stricter state licensing requirements for dentists did not noticeably affect the dental health of 464 Air Force recruits. Other studies have found at best weak evidence that students in classes taught by licensed teachers performed better than those taught by unlicensed teachers.
Summarizing the literature, Professor Kleiner concludes, “there is little to show that occupational regulation has a major effect on the quality of service received by consumers.”
At the same time, the hurdles imposed by occupational licensing reduce the supply of workers in many regulated professions, which drives up wages in those jobs and the price of services. Dentists, for example, were found to earn and charge 11 percent more in states with the most restrictive licensing requirements. While tough licensing standards may help higher-income consumers avoid low-quality providers, it also appears to prevent lower-income consumers from gaining access to some services.

For the full commentary, see:
Krueger, Alan B. “Economic Scene; Do You Need a License to Earn a Living? You Might Be Surprised at the Answer.” The New York Times (Thurs., March 2, 2006): C3.
(Note: ellipsis added.)

You want more evidence? OK, here’s more evidence:

(p. A20) BISMARCK, N.D., Oct. 10 (AP) – The State of North Dakota is exploring whether people who sell items on eBay for others must get standrd auctioneers’ licenses, a process that includes taking instruction in talking real fast.

To get a license in the stare, aplicants must pay a $35 fee, obtain a $5,000 bond and undergo training at one of eight approved auction schools, where the curriculum includes rapid-fie speaking, breathing control and reading hand gestures.
“I don’t think it offers any additional protection for the consumer,” said Mark Nichols, who runs a small consignment store in Crosby. “It just creates a lot of red tape for the business, as well as having to put out a lot of money.”

For the full story, see:
“North Dakota Weighs Auction License for Some eBay Sellers.” The New York Times (Tues., Oct. 11, 2005): A20.

For Kleiner’s book, see:
Morris M. Kleiner. Licensing Occupations: Ensuring Quality or Restricting Competition? Upjohn Institute, 2006.

The Centrally Planned Economy: “Why doesn’t Wuhan have heating?”

WuhanHeatless.jpg
Li Qiao tries to stay warm in unheated apartment in Wuhan. Source of image: online version of WSJ article cited below.

(p. B1) WUHAN, China — As a winter wind howled through this central Chinese city, university lecturer Li Qiao settled down in his two-bedroom apartment for what should have been a cozy evening of reading. Around his apartment were signs of China’s new prosperity: a color television, refrigerator, washing machine and air conditioner. The only thing missing: heating.
Even though winter temperatures in Wuhan dip into the 30s with occasional snow, virtually none of the city’s homes are heated. “The cold is cutting into my bones,” lamented Mr. Li, who was bundled up in a down coat and a quilt, with an electric heater blowing warm air toward him. “Why doesn’t Wuhan have heating?”
Mr. Li isn’t the only one asking. Heating systems are one of the last areas that remain under China’s former centrally planned economy, with government regulators still setting the thermostat for homes, classrooms and offices across the country. Under the policy, which dates back to Mao Zedong in the 1950s, the government provides heat in the northern half of China, and, to save money, it provides no heat in the southern half. As a result, northerners often wilt in steaming apartments, while those in southern provinces shiver through the winter.
With no heat, even residents of modern cities like Shanghai spend much of the winter trying to get warm.
. . .
(p. B2) Mr. Li, the university teacher, and his wife ward off the cold air that seeps into their apartment at the university with an electrical heater, a hot-air fan and a wall unit air-conditioner that also blows out heat. At night, they wriggle into long underwear before piling under two sets of thick quilts. Although he has a three-hour lunch break, Mr. Li seldom goes back to his apartment, opting instead to hole up in his heated office.
His students aren’t so lucky. Classrooms aren’t heated, so they listen to his lectures swathed in down jackets, caps and gloves. Some students even carry hot-water bottles to keep their hands warm and cushions to place on the icy chairs.

For the full story, see:
Cui Rong. “China’s Winter of Discontent; Mao-Era Policy Provides Heat Up North but None in South; Shivering Citizens Are Fed Up.” The Wall Street Journal (Tues., March 14, 2006): B1 & B2.

Source of graphic: online version of WSJ article cited above.