Tom Peters: Over-the-Top Schumpeterian


Source of book image:  http://www.amazon.com/gp/product/customer-reviews/078949647X/ref=cm_cr_dp_2_1/104-2835260-2878345?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

 

Tom Peters became famous as the co-author of the business classic In Search of Excellence (1982).  His Re-imagine! is exuberant, optimistic, exaggerated, and stylistically over-the-top.  I find it fun, bracing, entertaining, and sometimes edifying.  If you like the prose of The Cluetrain Manifesto and Gilder’s Telecosm, then you may also like Re-imagine!

Here is an early, very brief passage: 


(p. 9)  My overall vision, in brief:  Business is cool. It’s about Creativity and Invention and Growth and Service.  It’s about Adam Smith’s "hidden hand."  And Nobel laureate Frederick Hayek’s "spontaneous discovery process."  And economist Joseph Schumpeter’s "gales of creative destruction."  At its best, it’s about building things that make life less burdensome than it was in medieval times.  About getting us beyond—far, far, far beyond—the quasi-slavery of the Middle Ages, the indentured servitude of the first 150 years of the Industrial Revolution, and the cubicle slavery of the last three-quarters of a century. 

Yes, business is cool.

(Or at least it can be.)

 

The citation to the book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

(Note:  the italics in the above passage appears that way in the original.)


“a jobs program for people who couldn’t make it in the private sector”

Source of book image:  http://www.amazon.com/gp/product/1400065526/sr=8-1/qid=1153368329/ref=sr_1_1/104-2835260-2878345?ie=UTF8

 

The levees are built by the Army Corps of Engineers, with the Orleans Levee District enjoying local control.  It is instructive to learn that the former president of the levee district bought himself an inflatable rubber craft a decade ago.  As Mr. Horne writes, some levees gave way "even before water reached the heights the walls were meant to contain and, in some cases, after it had begun to ebb."

Beset by outsourcing, brain drains and budget cuts, the Army Corps has been skimping for years.  This spring, its commanding officer conceded that there had been problems with flood-wall engineering.  But the government hardly has a monopoly on blame.  As Mr. Horne notes, the corps had intended to build a flood barrier at the mouth of Lake Pontchartrain on the city’s northern border ("an idea that would, after Katrina, suddenly seem like the highest sort of wisdom"), but the plan was scrapped when environmentalists sued.

By the mid-1970s, "the completion date for the upgraded flood defense that Congress had mandated for New Orleans had already been pushed back thirteen years," Mr. Horne writes, and one section was still unfinished as Katrina hit.  Apathy and indifference "turned government work into a jobs program for people who couldn’t make it in the private sector or who couldn’t be bothered to try."

Government handouts of a different sort followed the hurricane:  After a slow start with its relief effort, FEMA helped countless hurricane victims who were truly in need, but the agency also began cutting checks for almost anyone who asked.  "An initial $2000 would turn up in the mail within a few days of registering online or placing a call," Mr. Horne writes.  In fact, the agency "rolled over for millions in fraudulent or duplicate claims without checking to see that the applicant had offered a vacant lot or a nonexistent address as his or her residence."  Perhaps that was easier than risking further accusations of bias.

 

For the full review, see:

TOM BETHELL. "Books; Levying the Blame; Nearly a year after a hurricane ravaged a city and the finger-pointing began, two books dissect the destruction and the government’s response."  The Wall Street Journal (Sat., July 15, 2006):  P8.

 

The citation for the Horne book is:

Horne, Jed.  Breach of Faith.  Random House, 2006.  (412 pages, $25.95)

 

Environmental Bureaucrats Ignore Local Knowledge


  Source of book image:  http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300106211

 

From a useful review of a book on environmental policy:


(p. D8) The striking aspect of his new book is the story he tells of his own journey from supporter to critic of the Spaceship Earth theory of environmental law.  His first step toward disenchantment was seeing, as an NRDC lawyer, the EPA’s personnel up close.  "The EPA had not come from Starfleet Academy," he notes, "but rather was an amalgam of the federal government’s preexisting environmental programs," then part of the Department of Health, Education and Welfare.  In short, the bureaucrats were real people with real incentives, just like politicians and voters—but unanswerable to the public.


The next educational step, for him, was the decision to buy a farm in upstate New York.  Mr. Schoenbrod was surprised by the wisdom of his rural neighbors.  He movingly describes how a local logger changed his mind about forestry practices by showing him, among much else, that sometimes cutting down particular trees can benefit the forest.  (It sounds like a simple observation, but it is the kind of thing that bureaucrats, with their sweeping mandates, often don’t allow for.)  Mr. Schoenbrod also looks at the local reaction to a number of environmental decisions, such as the EPA’s ordered dredging of the Hudson River because of the small risk of PCBs.  The intent was to protect the health of local communities, but upstate landowners opposed the dredging by a ratio of more than 2 to 1.

For the full review, see: 

John Berlau.  "Bookshelf; A Law Unto Themselves."  The Wall Street Journal  (Thurs.,  August 18, 2005):  D8.

 

The full reference to the Schoenbrod book:

Schoenbrod, David.  Saving Our Environment from Washington:  How Congress Grabs Power, Shirks Responsibility, and Shortchanges the People. Yale University Press, 2005.


Exercising to Win, Hurts Lifetime Fitness

Source of image:  online version of the NYT article cited below.

 

(p. E1)  The dirty secret among former high school and college jocks is that many don’t remain active as adults.  In their glory days they were the fittest among their peers.  But as adults many are overtaken by nonjocks who embrace fitness as a commitment to health, forget the varsity letter.

Onetime elite athletes often languish once organized competition is over and a coach isn’t hounding them, sports scientists and exercise physiologists say.  Many are burned out.  Others become discouraged when their lackluster fitness can’t compare to their highlight reels.  Running on a treadmill in a sea of anonymous gym-goers doesn’t compare to the thrill of being an m.v.p. on campus.

"Basically, they’ve been to the mountaintop and now they’re on these little hills, and that is difficult to deal with," said Dan Gould, the director of the Institute for the Study of Youth Sports at Michigan State University in Lansing.

Extrinsic motivation is tricky business, said Dr. Gould, a professor of kinesiology.  He said he has found that athletes who played for trophies (p. E8) or attention are more at risk of becoming sedentary as adults than people who have taught themselves to get off the sofa and exercise, those with "intrinsic motivation."

 

For the full story, see:

JILL AGOSTINO.  "Once an Athletic Star, Now an Unheavenly Body."   The New York Times  (Thurs.,  July 6, 2006):  E1 & E8.

Indians Hunted Several Species to Local Extinction

 Researchers at work at the Emeryville Shellmound.  Source of photo:  online version of The Washington Post article cited below.

 

Like the Europeans who came later, the first Americans apparently had a propensity for killing and eating any animal they could lay their hands on without giving a lot of thought to the future, judging by the bones they left behind at one notable site.

"The general public probably buys into the ‘Pocahontas version’ that Native Americans were inherently different and more in tune with nature," said University of Utah archaeologist Jack Broughton.  "The evidence says otherwise."

After studying thousands of animal bones found in a garbage heap on the shores of San Francisco Bay, Broughton concluded that Native Americans living in an area where Emeryville is now located hunted several species to local extinction from 600 B.C. to A.D. 1300.

 

For the full story, see: 

Guy Gugliotta. "SCIENCE Notebook; Indians Depleted Wildlife, Too." The Washington Post (Monday, February 20, 2006):  A09. 

 

A more detailed summary of the research can be found in a University of Utah press release:

"Early California: A Killing Field; Research Shatters Utopian Myth, Finds Indians Decimated Birds."

 

The full, academic version of the research can be found in: 

Broughton, Jack M.  Prehistoric Human Impacts on California Birds: Evidence from the Emeryville Shellmound Avifauna, Ornithological Monographs, 2004.

 

Job Hopping May Aid Technological Experimentation

When employees jump from company to company, they take their knowledge with them.  ”The innovation from one firm will tend to bleed over into other firms,” Professor Rebitzer explained.  For a given company, ”it’s hard to capture the returns on your innovation,” he went on.  ”From an economics perspective, that should hamper innovation.”

He found a possible answer to the puzzle in the work of two management scholars, Carliss Y. Baldwin and Kim B. Clark.  In their book ”Design Rules:  The Power of Modularity” (MIT Press, 2000), they argued that when there is a lot of technological uncertainty, the fastest way to find the best solution is to permit lots of independent experiments.  That requires modular designs rather than tightly integrated systems.

”By having a lot of modular experimenters, you can take the best, which will be a lot better than the average,” Professor Rebitzer said.  Employee mobility may encourage productive innovation, as people quickly move to whichever company comes up with the best new technology.

. . .

To Professor Rebitzer’s surprise (though not his co-authors’), it turns out that Silicon Valley employees really do move around more often than other people.  The researchers looked at job changes by male college graduates from 1994 to 2001.  During that period, an average of 2.41 percent of respondents changed jobs in any given month.

But, they write, ”living in Silicon Valley increases the rate of employer-to-employer job change by 0.8 percentage point.”

”This effect is both statistically and behaviorally significant — suggesting employer-to-employer mobility rates are 40 percent higher than the sample average.”

 

For the full commentary, see: 

VIRGINIA POSTREL.  "ECONOMIC SCENE; In Silicon Valley, Job Hopping Contributes to Innovation."  The New York Times  (Thursday, December 1, 2005):  C4.

 

A PDF of the paper by Rebitzer and colleagues is downloadable at:    http://www.federalreserve.gov/Pubs/feds/2005/200511/200511abs.html

 

The book Postrel praises, is:

Source of book image:  http://www.amazon.com/gp/product/customer-reviews/0262024667/104-2835260-2878345?redirect=true

Gateway Features artdiamondblog.com

Source of graphic: online version of The Gateway article cited below.

 

The Gateway, the student newspaper at the University of Nebraska at Omaha, ran a nice feature article on artdiamondblog.com on July 18, 2006, as the first installment of a projected series on blogs created by members of the campus community.

 

If you click the citation below, you will arrive at the online version of the feature:

Reed, Charley. "Meet the Blogger: UNO Professor Art Diamond." The Gateway (Tues., July 18, 2006):  3.

 

For your convenience, the text of the feature also appears below.

Continue reading “Gateway Features artdiamondblog.com”

Entrepreneurial Archaeology

In the "Dig for a Day" program, participants pay $25.00 to spend three hours helping to excavate a Tel Maresha cave.  Source of the image:  the online version of the NYT article cited below. 

 

While most archaeological excavations require hundreds of thousands of dollars, Mr. Alpert said, this one is unusual because it is self-supporting.  “We have the people working and paying for the work, which has proven itself archaeologically and from a tourism standpoint,” he said.  “That’s why we are able to dig for so long.”  The Maresha excavation is licensed by the Israeli Antiquities Authority, and reports are submitted each year to evaluate its scientific contribution.

“This is the ultimate chutzpah,” said Ian Stern, another of the company’s three owners, who has a doctorate in archaeology and emigrated to Israel from New Jersey (the third owner is Asher Afriat, a historian and native Israeli).  “We are providing the public with an active educational experience, while they do the work.  Their money underwrites the excavation and is used for all the follow-up of putting the pottery together, registering and photographing the finds, and writing the scientific reports.” 

 

For the full story, see:

CAREN OSTEN GERSZBERG.  "Family Journeys; Israel; Amateur Archaeologists Get the Dirt on the Past."  The New York Times, Section 5 (Sun., July 16, 2006):   11.

 

  Amateur archaeologists excavate a cave.  Source of the image:  the online version of the NYT article cited above.

 

Internet Increases Variety of Goods, Services, and Culture

LongTailBK.jpg Source of book image:  the WSJ review cited below.

 

According to Mr. Anderson, technology is not just accelerating the delivery of traditional pop culture but affecting the choices we make.  The key to such change is a phenomenon he calls "the long tail."

In a traditional graph of sales and demand, there is a stratospheric swoop upward where hot products and services are tracked, and a long descending line tracing the less spectacular performance of low-volume also-rans.  For years, these outliers fell off the edge of the market or held only a marginal position, with minimal profits.  These days, though, technology has allowed such niche interests to thrive, finding steady customers and rising levels of interest.

For the full review, see: 

STEVEN ZEITCHIK. "BOOKS; A Nichefied Mediaquake; Technology has revolutionized distribution, but doesn’t talent still matter?" The Wall Street Journal (Sat., July 8, 2006): P8.

 

Anderson’s book highlights an important result of the internet revolution:  the increase in the variety.  In an earlier academic article, that discusses and measures this effect, Erik Brynjolfsson and his co-authors (see below) looked at the effects of Amazon.com on consumers.  They found a substantial benefit to consumers from lower book prices, due to more competition, and better information.  But their surprising result was that they found a much larger benefit to consumers from the greater variety of books that Amazon.com makes readily available.

The darkened long tail in graph below roughly represents the books available through Amazon that would not be available in even the very largest ‘bricks-and-mortar’ book store.

There are important implications for both readers and writers.  Readers are more likely to find the kinds of books they want.  Writers are more likely to find a sufficient readership to be able to sustain themselves through their writing.   

 

Source of graph is p. 1589 of:  Brynjolfsson, Erik, Yu (Jeffrey) Hu, and Michael D. Smith. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers." Management Science 49, no. 11 (2003): 1580-96.

 

The citation for the Anderson book is:

Anderson, Chris. The Long Tail. Hyperion, 2006.  (238 pages, $24.95)

Entrepreneurial Philanthropy

  Some major donors who want to make a difference during their lives.  Source of graphic:  online version of WSJ article cited below.

 

(p. A1)  "If we give it away now, we’re going to do a good job with it, instead of leaving it to future generations of foundation folks," says Herbert M. Sandler, 74 years old.  He and his wife, Marion, intend to donate the $2 billion they expect from the sale of the California savings and loan Golden West Financial Corp. before "we shuffle off this mortal coil."

The Sandlers’ plan, like Mr. Buffett’s $30 billion gift to the Gates foundation announced last month, exemplifies the changing pattern of U.S. philanthropy — and the (p. A8) Gates organization’s increasing influence over it.  The charitable titans of today are unlike many of the old-school business bluebloods who sought to immortalize their names by setting up foundations that parceled out small gifts forever.  Instead, some of America’s wealthiest moguls-turned-philanthropists — Eli Broad, Charles Bronfman, Lawrence Ellison, Michael Milken and Sanford Weill, among others — favor spending money faster, while retaining a high degree of control and demanding more accountability from the programs they fund.

. . .

By contrast, some of today’s tycoons increasingly limit the time frame, leaving tomorrow’s magnates to handle tomorrow’s problems.  Mr. Bronfman, an heir to the Canadian liquor fortune, says he plans to exhaust the money in his $120 million foundation by 2020.  He is spending at a $12 million to $14 million a year clip.  "Why should I saddle the next generation with something I’m passionate about?" he says.  "Let them have their own passions and do their own things."  Mr. Bronfman, 75, believes in narrowly targeted goals — in his case, they include helping pay for young Jews to visit Israel.  So far, his organization has had a hand in sending 112,000 people on such trips.

Mr. Milken, a financier who served two years in jail for securities fraud in the 1990s, funds medical research and K-12 education; he founded the Prostate Cancer Foundation in 1993 after being diagnosed with the disease himself.  He said the six foundations he and his brother Lowell have established  — which have funds of about $350 million — spend an average of 15% of their assets each year.  Three of the six have attracted a total of $300 million in gifts from outside donors who, like Mr. Buffett, preferred supporting existing ventures to starting their own.

Mr. Milken said he negotiates with medical centers to make sure gifts go to research and clinical trials rather than overhead.  In return,  his foundations waive patent rights to any discoveries made as a result of their funding.  "You can’t just write checks," he said.  "You have to be actively involved.  You have to introduce new management, marketing, other types of activities to empower medical research."

Mr. Sandler and his wife, Marion, have no patience for big foundations that spend 5% annually.  "They are never going to give it [all] away," he says.  Many foundations, he adds, "become bureaucratic."

He and his wife built their Oakland S&L, Golden West, from a small thrift into the nation’s second largest savings and loan by emphasizing lean operations and a laser-like focus on home lending.  The couple, who are co-chief executives, recently agreed to sell the company to Wachovia Corp.

The Sandlers have already given heavily to start the Center for Basic Research in Parasitic Diseases at University of California at San Franciso’s medical school.  The center focuses on Third World diseases neglected by major drug companies.  Along with malaria, the family’s philanthropy has focused on finding treatment for the millions in South America afflicted by Chagas disease, a deadly insect-born ailment.  A donor to the Democratic Party, Mr. Sandler has also backed progressive causes, including Human Rights Watch, the American Civil Liberties Union, and Association of Community Organizations for Reform Now, Acorn.

Mr. Sandler patterns his giving after the Gates foundation.  He admires the Gates foundation’s program in Zambia, fighting malaria, and hopes to work together to replicate its methods in other countries.  Like Mr. Gates, Mr. Sandler is looking for "gaps" in giving that he can fill, such as basic scientific research shunned by most big drug companies.  Another interest:  fighting asthma,  which disproportionately afflicts the poor in inner-city America.

Mr. Sandler says he’s not afraid to take risks with his money, the same way he did in business.  And he doesn’t want a foundation that, after his death, would spend frugally just to stay in business, or support causes far from his heart.  "One prays that when we are going down the tubes, we will be giving that last million dollars," he says.

 

For the full story, see: 

JOHN HECHINGER and DANIEL GOLDEN. "The Great Giveaway; Like Warren Buffett, a new wave of philanthropists are rushing to spend their money before they die." The Wall Street Journal (Sat., July 8, 2006): A1 & A8.

 

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

Entrepreneurs Saluted in Orange Business Services Ad

Source of screen captures:  the downloaded Orange Business Services BBC World ad cited below.

 

Last month (June 2006) when I was in France, I saw a fun Orange Business Services ad on BBC World.  Two entrepreneurs open their fast food truck in the middle of an empty desert.  Something like a comet strikes the desert and a crowd of cars appears and a line forms at the truck.  The entrepreneurs smile.  Tag line:  "here’s to the entrepreneur in all of us."

Orange Business Services let’s you watch, or download, the ad at:  http://www.francetelecom.com/sirius/obs/en/index.html?cmp=BAC-van-bbcworld

(I saw the ad in Sophia Antipolis, France on BBC World, at about 7:10 AM, French time, on 6/23/06.)