Strategy. Innovation. Brand.
Premature Commitment. It’s a Guy Thing.
Sin in haste. Repent at leisure.
There’s a widespread meme in American culture that guys are not good at making commitments. While that may be true in romance, it seems that the opposite — premature commitment — is a much bigger problem in business.
That’s the opinion I’ve formed from reading Paul Nutt’s book, Why Decisions Fail. Nutt analyzes 15 debacles which he defines as “… costly decisions that went very wrong and became public…” Indeed, some of the debacles — the Ford Pinto, Nestlé infant formula, Shell Oil’s Brent Spar disposal — not only went public but created firestorms of indignation.
While each debacle had its own special set of circumstances, each also had one common feature: premature commitment. Decision makers were looking for ideas, found one that seemed to work, latched on to it, pursued it, and ignored other equally valid alternatives. Nutt doesn’t use the terminology, but in critical thinking circles this is known as satisficing or temporizing.
Here are two examples from Nutt’s book:
Ohio State University and Big Science — OSU wanted to improve its offerings (and its reputation) in Big Science. At the same time, professors in the university’s astronomy department were campaigning for a new observatory. The university’s administrators latched on to the observatory idea and pursued it, to the exclusion of other ideas. It turns out that Ohio is not a great place to build an observatory. On the other hand, Arizona is. As the idea developed, it became an OSU project to build an observatory in Arizona. Not surprisingly, the Ohio legislature asked why Ohio taxes were being spent in Arizona. It went downhill from there.
EuroDisney — Disney had opened very successful theme parks in Anaheim, Orlando, and Tokyo and sought to replicate their success in Europe. Though they considered some 200 sites, they quickly narrowed the list to the Paris area. Disney executives let it be known that it had always been “Walt’s dream” to build near Paris. Disney pursued the dream rather than closely studying the local situation. For instance, they had generated hotel revenues in their other parks. Why wouldn’t they do the same in Paris? Well… because Paris already had lots of hotel rooms and an excellent public transportation system. So, visitors saw EuroDisney as a day trip, not an overnight destination. Disney officials might have taken fair warning from an early press conference in Paris featuring their CEO, Michael Eisner. He was pelted with French cheese.
In both these cases — and all the other cases cited by Nutt — executives rushed to judgment. As Nutt points out, they then compounded their error by misusing their resources. Instead of using resources to identify and evaluate alternatives, they invested their money and energy in studies designed to justify the alternative they had already selected.
So, what to do? When approaching a major decision, don’t satsifice. Don’t take the first idea that comes along, no matter how attractive it is. Rather, take a step back. (I often do this literally — it does affect your thinking). Ask the bigger question — What’s the best way to improve Big Science at OSU? — rather than the narrower question — What’s the best way to build a telescope?
Sunday Shorts – 8
Alexandria to Oslo to Times Square?
Interesting stuff from around the world that I’ve discovered this week.
Amazon wants to build an ecosystem of apps for their Kindle Fire. Sounds like a hard job. So what does Amazon do? Simple… they create their own currency.
What’s the secret to fast innovation? It could be modular design.
They re-designed the Alexandria library. Then they created an opera house in Oslo that’s partially submerged. Now they’re planning to re-design Times Square. Who are these Snohetta folks?
Distributed sensing anyone? How about atmospheric data gathered from bazillions of mobile phones? What’s the result? Better weather prediction. Maybe even better weather.
In lots of countries around the world, girls score higher than boys in standardized scientific tests — but not in the United States. Why would that be?
Can geodesign protect us from natural disasters? Well, maybe.
Are cats really just your “friendly, neighborhood serial killers”? Will they be banned from New Zealand?
Will Sweden Ever Build a Las Vegas? Not On Your Lagom.
You wanted to see a Swedish supermodel?
Suellen and I lived in Stockholm for three years and generally loved it. The winters are long and dark but the people are sunny and positive. Taxes are high but services are great. And they write some of the best murder mysteries in the world. Here are some things we’ve found out about Sweden, Scandinavia (Sweden, Denmark, and Norway) and the Nordic countries (Scandinavia plus Iceland and Finland).
They’re innovative — Sweden produces more patents per capita than any other country. Finland is second; Denmark is sixth. The U.S is ninth. In the Bloomberg Survey of Innovative Countries, the U.S. is first. Finland in fourth; Sweden is fifth; Denmark is ninth.
They’re happy — The Danes are the happiest people in the world. Finland is second; Norway is third; Sweden is seventh. The U.S. is 11th.
They’re free (from prison) — Sweden has about 70 people in prison per 100,000 population. The U.S. has 700.
Women are close to equal — Sweden is widely considered the best place in the world for a woman to pursue a career. Iceland usually ranks first in surveys of overall gender equality. Even in the Nordics, however, men still make more money than women.
They’re healthy — On the Bloomberg Survey of the World’s Healthiest Countries, Sweden ranks ninth. Finland is 22nd and Denmark is 26th. The U.S. is 33rd.
They get great vacations — typically six weeks of paid vacation plus various national holidays. If you want to take four weeks in a row, your company is obligated to permit it.
They’re egalitarian — the Nordic countries rank among the most egalitarian in the world in most measures of income distribution.
They’re well governed — according to The Economist‘s ranking of the best governed nations in the world, the top four are: Sweden, Denmark, Finland, and Norway. The U.S. is eighth.
What explains all this? I think some of it is the Swedish concept of lagom. We have no equivalent word in English but lagom is usually translated as “just enough” or “just the right amount, not too much”. Here are two examples:
The Swedish soccer (football) team played another nation and won by a score of 5 to 0. The Swedish coach worried aloud, saying, “I wish we had won by 2 to 0. We humiliated them. It’s not lagom. They’ll be looking for revenge the next time.” Have you ever heard any coach, anywhere in the world wishing they had won by less?
Suellen got into a long conversation with some Swedish friends about public education. Somehow, the subject of special programs for gifted and talented kids in the U.S. came up. The Swedes were dumbfounded. “Why on earth,” they asked, “would you invest extra money to help kids who already have all the advantages? If they’re so gifted and talented, they’ll figure out how to succeed.” The Swedish way would be to invest more in kids who are below the norm to help them come up to the middle. That’s lagom.
Could lagom explain Sweden’s (and the Nordics’) successes? Probably not all of them. But it does provide a sense of balance and fair play that lubricates the country’s society and economy. It also prompts a questioning attitude — Why are we doing what we’re doing? What does it lead to? What do we hope to achieve? The answer is not just more. It’s more balance. Perhaps that’s why this week’s issue of The Economist claims that Sweden is leading a “quiet revolution”, “thinking the unthinkable”, and fundamentally re-inventing capitalism. It’s a great read — just click here.
Social Media for Business Leaders
As a marketing guy, I understand (sort of) the marketing aspects of social media. If you can start a conversation — and keep it interesting — you can engage your market in ways that are impossible with “interruption marketing”. You can exchange ideas, gather suggestions, support charities, and engage in positive social activities. Along the way, you can mention your products. You offer something of interest (or utility) and the products tag along for the ride.
But social media is not just about marketing. Executives should be able to use social media to enhance both internal and external communication. Yet, I haven’t found many examples in the literature. Fortunately, McKinsey just published an interesting case study based on GE’s experience. The authors, who are GE leaders themselves, point out that GE is not a “digital native” and its experiences may, therefore, be relevant to a wide range of organizations. They then outline six social media skills that all leaders need to learn. The first three are personal; the last three are strategic or organizational.
Producer — creating compelling content. Digital video tools are now widely available and easy to use. Even busy senior executives can weave them into their communications. As compared to traditional top-down communications, the emphasis shifts from high production quality to authenticity. The goal is to invite participation and collaboration. Speaking plainly and telling stories in an authentic voice invites participation much better than a highly produced video.
Distributor — leveraging dissemination dynamics. Instead of sending a message and expecting it be consumed, you now send a message and expect it to be mashed up. A successful social message will be picked up by people at all levels of the organization, commented on, “recontextualized”, and forwarded along. You want this to happen which means giving up a significant amount of control — not always an easy concept for executives. You also want to build up a followership within the organization long before you need it.
Recipient — managing communication overflow. We’re already drowning in information. Why take on social media? Because it’s more credible than top-down media. By learning to use filters effectively, you can also use social media to manage the flow of information to and from your desk. You should practice when and how to respond to postings and tweets. You don’t need to respond frequently but you do need to respond thoughtfully.
Advisor and orchestrator — driving strategic social media utilization. Fundamentally, executives need to promote the use of social media and guide it to maturity. Your company may be enthusiastic but inexperienced. Or you may have leaders who wish to avoid it altogether. A good leader can harness the enthusiasm of “digital natives” and even use them as “reverse mentors” to build capabilities within the organization.
Architect — creating an enabling organizational infrastructure. On the one hand, you want to encourage collaboration and free exchange. On the other hand, you need some rules. It helps if you have well-established values of integrity, collaboration, and transparency. If your company hasn’t established these values, it’s time to get started. Social media will arise in your organization whether you’re ready or not.
Analyst — staying ahead of the curve. As your organization masters social media, something new will emerge. Perhaps, it’s the Internet of Things. As I’ve noted before, this could help us reduce health care costs. It could also have huge implications for your organization — both good and bad. Better stay awake.
And what do you get if your company’s leaders master these skills? The authors say it best: “We are convinced that organizations that … master … organizational media literacy will have a brighter future. They will be more creative, innovative, and agile. They will attract and retain better talent, as well as tap deeper into the capabilities and ideas of their employees and stakeholders.”
Want to Be More Innovative? Move to Boulder. Or Sweden.
In an earlier post, I pointed out that cities generate much more than their “fair” share of innovations. The reason is simple: there’s more opportunity to run into new ideas, concepts, and people. It turns out that innovation is even more concentrated than I thought. Just 20 of the America’s 370 metropolitan statistical areas — accounting for 34% of the population — produce 63% of the nation’s patents. The top five patent-producing metropolises in the U.S. (in order) are: San Jose, CA, Burlington, VT, Rochester, MN, Corvallis, OR, and Boulder, CO. These areas account for 12% of the U.S. population but 30% of American patents.
The finding comes from a new Brooking’s Institute report on patents. Some other highlights:
- The pace of patenting in the U.S. continues to climb. The growth of patent applications slowed after the IT bubble burst but is now at an all time high.
- Though the pace has increased, the U.S. ranks ninth in the world in terms of patents per capita. The countries ahead of the U.S are (in order): Sweden, Finland, Switzerland, Israel, the Netherlands, Denmark, Germany, and Japan. (Those pesky Scandinavians are at the top again).
- The average patent is worth about $500,000 in direct market value — and much more as it diffuses through the economy.
- The last period of great patent growth in the United States fell between the Civil War and the early 20th century. We “democratized” invention during that period — with many patents coming from blue-collar workers who were not professional researchers. Today, patents are more complicated, more difficult and expensive to obtain, and require more education. The ability to create patents is concentrated in fewer organizations in fewer places.
- The price per patent is rising in the U.S.. From 1953 to 1974, $1.8 million in R&D spending generated one patent. Since 1975, the cost has been $3.5 million (in inflation adjusted dollars).
- Almost half (48%) of the patents granted in the U.S. from 2006 through 2010 could be grouped into the Big Ten categories: Communications, Computer Software, Semiconductors, Computer Hardware, Power Systems, Electrical Systems, Biotech, Measuring & Testing, Information Storage, Transportation. The top five categories account for slightly more than 30% of all patents.
- Patent ownership has become broader and more competitive. Of the top ten patent producing companies from 1976 to 1980, only four were in the top 10 in 2011-2012: IBM, GE, GM, and AT&T.
- The federal government dominated R&D spending up to approximately 1970. By the late 1970s, the federal government share fell below half. In 2009, the government share of R&D spending was about one-third. Roughly 60% of federal R&D spending goes to private companies, 30% goes to universities (including university-administered national labs).
- Metropolitan areas that lead in patent production also lead the nation in terms of of productivity growth. They also enhance local employment opportunities and generate a disproportionate number of initial public offerings (IPOs).
The Brooking Report provides ample evidence that the research and innovation that lead to patents has a dramatic impact on local economies, employment, and growth. Bottom line: if you want your city to grow, don’t build a football stadium. Build a research university. Or move to Boulder.
My Social Media
