TECH TALK: Good Books: Buying Books

I cannot stay away from buying books. The small diary that I carry with me has a list of books that I’d like to buy. Of course, I could also go and order them from Amazon but I like to see a book before I buy it. So, I prefer buying from a local bookshop if I can find it there. I like to buy only one or two books at a time so there is time to read them before I get the next couple.

I don’t tend to read a book cover to cove. I tend to go through it rapidly, and then focus on the sections which help me think through the current set of challenges that I am facing. A book spurs thought. I find books a great source for new ideas. I tend to apply what I am reading to what I am thinking. So, even as a book has its own themes, while reading a book I create sub-themes of my own, which help in lateral thinking.

I come across new books while reading blog posts, reviews or recommendations from friends. I also tend to track some key people and look out for their new books. An example is Nassim Taleb’s forthcoming book “The BlackSwan.” When I come across a new book, I will do a quick check on Amazon. And then, if I think I should buy the book. I will add to the shopping cart and make an entry in my diary.

I also like to pick up books from a bookstore for another reason. One always finds something else which is interesting – and something which no recommendation engine would have figured out! Bookshops are a favourite ‘timepass’ place for me. So, I don’t miss an opportunity to visit one.

And so it was, last Sunday, that I made my way to Oxford Book Store (near Churchgate in Mumbai) along with Abhishek. We had not started with that as the destination. But the Crossword Bookshop near my house at Kemp’s Corner now opens an hour later at 11 am. I discovered this when we reached there. We then took a bus and made our way to Oxford.

I left with three books in hand – “The Strategy Paradox” by Michael Raynor, “The Marketing Gurus” by Chris Murray, and “Know-How” by Ram Charan. The first and third were on my list of books to check; the second was not.

Tomorrow: The Strategy Paradox

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TECH TALK: Good Books: The Strategy Paradox

I came across Michael Raynor’s “The Strategy Paradox” via an interview with the author of AlwaysOn. I was familiar with Raynor because of his previous book, “The Innovator’s Solution” that he had co-authored with Clay Christensen. The two things that caught my attention were the book’s byline “Why Committing to Success Leads to Failure (and What To Do About It)” and the following statement by Raynor: “the same strategies that have the highest probability of extreme success also have the highest probability of extreme failure. In other words, everything we know about the linkage between strategy and success is true, but dangerously incomplete. Vision, commitment, focus...these are all in fact the defining elements of successful strategies, but they are also systematically connected with some of the greatest strategic disasters.”

Here are a few more excerpts from the AlwaysOn interview by Guy Kawasaki:

Question: Why can’t companies predict the future better?

Answer: Companies might be able to predict the future better than they can now, but for me the question is whether they will ever be able to predict the relevant future accurately enough for the purposes of strategic planning, and so avoid, or at least mitigate, the strategy paradox. I don’t think that’s going to happen anytime soon for some deep, structural reasons.

For example, randomness. Prediction requires the identification of a pattern that repeats, because a pattern is what allows you to use what has happened to infer what will happen next. Randomness is the enemy of pattern-based prediction because randomness means that there is no pattern, no way to use the past to predict the future.

Question: What’s the proper role in strategy formation for each level in a hierarchy?

Answer: I’ve found that it helps to think about strategy in two halves: the commitments that all successful strategies entail, and the uncertainties attendant to those commitments. Commitments and uncertainties are only half the answer. The rest of the solution lies in calibrating the focus of each level of the hierarchy to the uncertainties it faces. It is common sense—if not common practice—that the more senior levels of a hierarchy should be focused on longer time horizons. What hasn’t been as widely recognized is that with longer time horizons come greater levels of uncertainty, and strategic uncertainty in particular. This fact has some profound implications for how each level in an organization should act.

Question: How does your answer change with respect to a start-up?

Answer: Start-ups tend to be enormously resource constrained. Typically they are not able to devote money and time to the problems of strategic uncertainty. As a result, start-ups tend to be “bet the farm” propositions: high risk, with the potential of high reward. Such firms don’t manage strategic risk, they accept it.

Given my interest in the future and envisioning and creating tomorrow’s world, there is no way I could not get and read the book.

Tomorrow: The Strategy Paradox (continued)

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TECH TALK: Good Books: The Strategy Paradox (Part 2)

Here is what the description of “The Strategy Paradox” says (via Amazon):

A compelling vision. Bold leadership. Decisive action. Unfortunately, these prerequisites of success are almost always the ingredients of failure, too. In fact, most managers seeking to maximize their chances for glory are often unwittingly setting themselves up for ruin. The sad truth is that most companies have left their futures almost entirely to chance, and don’t even realize it. The reason? Managers feel they must make choices with far-reaching consequences today, but must base those choices on assumptions about a future they cannot predict. It is this collision between commitment and uncertainty that creates THE STRATEGY PARADOX.

This paradox sets up a ubiquitous but little-understood tradeoff. Because managers feel they must base their strategies on assumptions about an unknown future, the more ambitious of them hope their guesses will be right – or that they can somehow adapt to the turbulence that will arise. In fact, only a small number of lucky daredevils prosper, while many more unfortunate, but no less capable managers find themselves at the helms of sinking ships. Realizing this, even if only intuitively, most managers shy away from the bold commitments that success seems to demand, choosing instead timid, unremarkable strategies, sacrificing any chance at greatness for a better chance at mere survival.

Michael E. Raynor, coauthor of the bestselling The Innovator's Solution, explains how leaders can break this tradeoff and achieve results historically reserved for the fortunate few even as they reduce the risks they must accept in the pursuit of success. In the cutthroat world of competitive strategy, this is as close as you can come to getting something for nothing.

Drawing on leading-edge scholarship and extensive original research, Raynor’s revolutionary principle of Requisite Uncertainty yields a clutch of critical, counter-intuitive findings. Among them:

-- The Board should not evaluate the CEO based on the company’s performance, but instead on the firm’s strategic risk profile
-- The CEO should not drive results, but manage uncertainty
-- Business unit leaders should not focus on execution, but on making strategic choices
-- Line managers should not worry about strategic risk, but devote themselves to delivering on commitments

With detailed case studies of success and failure at Sony, Microsoft, Vivendi Universal, Johnson & Johnson, AT&T and other major companies in industries from financial services to energy, Raynor presents a concrete framework for strategic action that allows companies to seize today’s opportunities while simultaneously preparing for tomorrow’s promise.

Tomorrow: The Strategy Paradox (continued)

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TECH TALK: Good Books: The Strategy Paradox (Part 3)

Here are some excerpts from the first chapter of “The Strategy Paradox” by Michael Raynor:

Most strategies are built on specific beliefs about the future.Unfortunately, the future is deeply unpredictable. Worse, the requirements of breakthrough success demand implementing strategy in ways that make it impossible to adapt should the future not turn out as expected. The result is the Strategy Paradox: strategies with the greatest possibility of success also have the greatest possibility of failure. Resolving this paradox requires a new way of thinking about strategy and uncertainty.
…
The strategy paradox, then, arises from the collision of commitment and uncertainty. The most successful strategies are those based on commitments made today that are best aligned with tomorrow’s circumstances. But no one knows what those circumstances will be, because the future is unpredictable. Should one have guessed wrong and committed to the wrong capabilities, it will be impossible to adapt—after all, a commitment that can be changed was not much of a commitment. As a result, success is very often a result of having made what turned out to be the right commitments (good luck), while failed strategies, which can be similar in many ways to successful ones, are based on what turned out to be the wrong commitments (bad luck). In other words, the strategy paradox is a consequence of the need to commit to a strategy despite the deep uncertainty surrounding which strategy to commit to. Call this strategic uncertainty.
…
The tool for creating strategic flexibility, called Strategic Flexibility, has four phases:

Anticipate: build scenarios of the future
Formulate: create optimal strategies for each of those futures
Accumulate: determine what strategic options are required
Operate: manage the portfolio of options
…
This book is not the first to observe that the future is unpredictable and that strategy making must take uncertainty into account. What is new is that here uncertainty is not an afterthought, not something one considers after commitments have been made. Instead, uncertainty is placed at the core of decision-makjng at the highest levels of the organization, and a broad range of strategic and organizational thinking has been marshaled to address the paradox created by uncertainty.

Tomorrow: The Strategy Paradox (continued)

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TECH TALK: Good Books: The Strategy Paradox (Part 4)

As I started reading the book (and am still doing so), I related it to some of my own decisions over the past few years. What Michael Raynor says in “The Strategy Paradox” made sense – and could even perhaps account for some of the failures that I have experienced over my fifteen years as an entrepreneur. I like to make bets about the future and think of ‘blue oceans’ that I see as potentially uncontested marketspaces.

In making these bets, I construct a vision of tomorrow’s world. And perhaps, that is the problem -- “a” vision. If I am too early or if that future does not pan out, one has to face failure. Perhaps, I should look at some hedging of bets going ahead. In an entrepreneurial venture, this is also not easy because they are multiple constraints.

A recent example from Netcore can help illustrate the importance of the need to create multiple scenarios for the future. A year ago, we were only focused on the mobile Internet and even created a mobile portal. But usage has been low for multiple reasons – the low activations of GPRS in India, the need to pay higher charges to go outside operator walled gardens, the lack of awareness about our portal, and so on.

At the same time, a group within Netcore decided to also focus on various interactive SMS services. I wasn’t that excited about these services given the limitations of SMS. But I let the development continue and we proceeded to launch many of these services late last year. As it turned out, we have seen rapid growth in these services – contrary to my initial expectations. In fact, we are now also seeing these services help drive the growth of the mobile portal.

While we did not follow Raynor’s framework and made decisions more based on instinct, I can now see the usefulness of bringing in some of the ideas described in his book in my mental models. Big bold bets definitely need to be made, but also thinking through (and perhaps creating solutions for) some alternate scenarios may be the smarter approach going forward.

Next Week: Good Books (continued)

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TECH TALK: Good Books: The Marketing Gurus

The second book I bought was “The Marketing Gurus” by Chris Murray. It is a collection of summaries of some of the best marketing books. It’s a good concept – one can get a flavour of the best recent ideas in marketing.

Here is a review from Publisher’s Weekly (via Amazon): “As the editor of Soundview Executive Book Summaries, which distills business books into 5,000-word recaps, Murray offers 17 such summaries of marketing books published in the last 15 years. It's arguably a narrow range for the best "of all time"—even with big names like Regis McKenna and Sergio Zyman on board. Each book summary begins with a quick summation, often making redundant the introductions written especially for the collection. And though the condensed versions manage to extract the key ideas from each text, some authors fare better than others. Faith Popcorn's unique voice survives compression, for example, much better than Seth Godin's does. The selected books are sequenced to suggest a broader argument that runs from connecting with customers to marketing in the 21st century, but the actual connections between the various works are largely unstated. Unless you're completely new to marketing research, chances are you've come across at least one of these books already, but Soundview's summaries are a good introduction for those with no background.”

This is what the book description says:

Since 1978, Soundview Executive Book Summaries has offered its subscribers condensed versions of the best business books published each year. Soundview’s summaries have won it acclaim as the definitive selection service for sophisticated business book readers.

For the first time ever, Soundview is bringing together summaries of seventeen essential marketing classics in a single volume…The Marketing Gurus distills thousands of pages into fewer than three hundred, making it ideal for busy professionals, students, and anyone curious about how marketing has evolved.

I have in fact bought many of the books summarised in “The Marketing Gurus” but never got around to reading some of them. I thought the summaries would be a good place to begin revisiting some of the recent marketing ideas. And so it turned out. I have read some of the summaries, and it’s an excellent introduction or refresher, as the case may be.

Tomorrow: The Marketing Gurus (continued)

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TECH TALK: Good Books: The Marketing Gurus (Part 2)

Here is a list of the books summarised by “The Marketing Gurus”:

Differentiate or die
Lateral marketing
The popcorn report
Relationship marketing
Networking with the affluent
Relentless
The one to one future
Up the loyalty ladder
Scoring points
How to drive your competition crazy
Crossing the chasm
Unleashing the killer app
The anatomy of buzz
Purple cow
Don't think pink
The discipline of market leaders
Renovate before you innovate

The first two summaries I read were “The One-to-One Future” and “Purple Cow.” They were relevant for some of the thinking I have been doing on how to rethink mobile marketing. I think the mobile can be a great platform to build 1:1 relationships. In countries like India, with the Internet usage still not at the levels it should have been, the mobile trajectory can create an interesting and different future compared to the one in the developed markets. I will discuss this further in a future Tech Talk series.

After reading the summaries, I could not but help wonder how there aren’t more such books in other areas. They can be a great introduction to the great ideas and in fact will lead readers to buy the books that have been summarised. While I accept that a 15-page summary can never do justice to the ideas covered in a 200-page book, I think a well-written summary can create greater interest amongst a wider audience.

Tomorrow: Know-How

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TECH TALK: Good Books: Know-How

The third book I bought was Ram Charan’s “Know-How: The 8 Skills That Separate People Who Perform from Those Who Don't.” I have read some of Ram Charan’s earlier books, and so this was an one easy decision. I was not disappointed.

Here is what Ram Charan’s site says about the book:

How often have you heard someone with a commanding presence deliver a bold vision that turned out to be nothing more than rhetoric and hot air? All too often we mistake the appearance of leadership for the real deal. Without a doubt, intelligence, vision, and the ability to communicate are important. But something big is missing: the know-how of running a business — the capacity to take it in the right direction, do the right things, make the right decisions, deliver results, and leave the people and the business better off than they were before.

For well over four decades, Ram Charan has been learning in the most visceral way the underlying reasons why leaders succeed and fail. As one of the most influential advisors to top management teams of leading companies around the world, he has had a front-row seat to observe the cause and effect of leadership practices and behaviors.

Ram Charan's insight into the real content of leadership provides you with the eight fundamental skills needed for success in the twenty-first century:

Positioning (and when necessary, repositioning) your business by zeroing in on the central idea that meets customer needs and makes money

Connecting the dots by pinpointing patterns of external change ahead of others

Shaping the way people work together by leading the social system of your business

Judging people by getting to the truth of a person

Molding high-energy, high-powered, high-ego people into a working team of leaders in which they equal more than the sum of their parts

Knowing the destination where you want to take your business by developing goals that balance what the business can become with what it can realistically achieve

Setting laser-sharp priorities that become the road map for meeting your goals

Dealing creatively and positively with societal pressures that go beyond the economic value creation activities of your business

Know-How is the missing link of leadership. By Showing how the eight know-hows link to, interact with, and reinforce personal and psychological traits, Ram Charan provides a holistic and innovative portrait of successful leaders of the twenty-first century.

Tomorrow: Know-How (continued)

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TECH TALK: Good Books: Know-How (Part 2)

Here is an excerpt from the first chapter of Ram Charan’s book “Know-How”:

Certainly intelligence, self-confidence, presence, the ability to communicate, and having a vision are important. But being highly intelligent doesn’t mean that a person has the knack for making good business judgments. How many times have you seen people confidently making decisions that turn out to be disastrous? How often have you heard a vision that turned out to be nothing more than rhetoric and hot air?

Personal attributes are just one small slice of the leadership pie, and their value is greatly diminished without know-how, the eight interrelated skills that bring leadership into the realm of profit and loss.

We need leaders who know what they are doing. Change is always with us, but its current magnitude, speed, and depth is unlike what most readers of this book have experienced in their lifetime. A Google can come from nowhere and grow into a multibillion-dollar business in a few short years, becoming one of the world’s most highly valued companies.
…
World-class competitors can now emerge from anywhere–witness the wave of emerging nation players that have clear advantages in their industries–thanks to mobility of talent, capital, and knowledge. You will be constantly tested for your know-how and lead your business in the right direction. Will you be able to do the right things, make the right decisions, deliver results, and leave your business and the people in it better off than they were before?
…
Instead of trying to define and adopt the ideal set of personal traits, it’s more useful to focus on a simple question: How does your personal psychology and cognitive ability affect the way you cultivate and use the know-hows? For example, the know-how of detecting the patterns of external change might be affected by your ability to connect the dots and whether at heart you are an optimist or pessimist.

Tomorrow: Know-How (continued)

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TECH TALK: Good Books: Know-How (Part 3)

Here are excerpts from a Q&A with Ram Charan (via Amazon) about his book “Know-How”:

Q: You identify 8 know-hows. Can you take us through one of them?

A: In this time of continual change, money making or business models are becoming obsolete more frequently than ever before. It wasn't that long ago when AOL was king of the hill. That leadership was taken over by Yahoo. Now Yahoo is at a crossroads and the leadership has been taken over by Google. So far Google is ahead. It has the central recipe to increase its revenues via advertising because it knows how to measure advertising effectiveness better than anybody else. Leaders at both AOL and Yahoo must be scratching their heads trying to figure out how to reposition the company to make money in the new context. Repositioning is a know-how. It's hard work, and it requires imagination. We will have an opportunity to see about the decision made by Time Warner top brass to summarily replace Jim Miller with Randy Falco of NBC Universal. Randy has a distinguished record. He will have to demonstrate one of the most crucial know-hows in this book: Can he reposition AOL for the new game, and in time? Cost cutting is not the answer.

Q: How can you build your know-how, or help others develop theirs?

A: No talented athlete ever became a champion without consistent regular practice in the right way, along with feedback and hard work. There are no short cuts.That's why you should start practicing early in your career by taking assignments that will help you cultivate the know-hows and seeking out bosses you can learn from.

Q: Many people think of leaders as having innate traits that set them apart from the rest of us. Are you saying we should be looking at skills instead of personality?

A: At the time somebody enters the work force, a great deal of his or her personality has been formed. Most people who talk about leadership today talk about personality, personality, personality. Personality traits, presence, charisma--they will experience attrition if you don't practice them in the context of know-hows. Personality traits and know-hows reinforce each other. In the 21st century, the transparency of results is immediate. Failure is detected very early. Dependence on personality traits without the mastery of the know-hows is a recipe for disaster.

Q: What do you think about the future?

A: The future is very bright. The global economy will continue to expand. There will be more demand for leaders than ever before. Master the know-hows. Hone your personality traits while you're mastering the know-hows. Don't forget that your success must come in the context of global competition. Take the opportunity to win.

I would strongly recommend reading this book and some of Ram Charan’s other books, especially “Execution.”

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TECH TALK: Good Books: No Two Alike

Sitting down to read a good book is a delight that has no parallel. As one starts reading, one gets immersed in the world that has been crafted by the author. Be it fiction or non-fiction, as a reader, I like to forget about the environs and let the author take over the mind. Books have an immersiveness that watching TV or reading an article on the Internet or in a newspaper can never have. It is like traveling on a long flight. One can easily lose sense of time with no distractions to split attention. So, for the next few weeks, I will pick a few more good books. As the year draws to a close and some of us take vacations, maybe one or more of these books can make a good companion.

“No Two Alike” was a book recommended by Chetan Parikh at one of our recent Book Club meetings. Written by Judith Rich Harris, it delves into, as the byline suggests, “human nature and human individuality.” It is about our personality – what makes us different. Harris had earlier written “The Nurture Assumption”, which was a finalist for the Pulitzer Prize. As Chetan pointed out in his review during our meeting, it is written in a somewhat of a detective style as a mystery book. Harris considers herself an “academic investigator.” She suffers from systemic schlerosis and lupus, two autoimmune diseases. Yet, she has conquered her physical limitations to put together a magical journey through the theories beyond personality and behaviour.

Here is how Publisher’s Weekly [via Amazon.com] summarises the book:

Why do identical twins who grow up together differ in personality? Harris attempts to solve that mystery. Her initial thesis in The Nurture Assumption: Why Children Turn Out the Way They Do is replaced here with a stronger, more detailed one based on evolutionary psychology. Reading this book is akin to working your way through a mystery novel—complete with periodic references to Sherlock Holmes. And Harris has a knack for interspersing scientific and research-laden text with personal anecdotes. Initially, she refutes five red herring theories of personality differences, including differences in environment and gene-environment interactions. Eventually, Harris presents her own theory, starting from modular notions of the brain (as Steven Pinker puts it, "the mind is not a single organ but a system of organs"). Harris offers a three-systems theory of personality: there's the relationship system, the socialization system and the status system. And while she admits her theory of personality isn't simple, it is thought provoking. Harris ties up the loose ends of the new theory, showing how the development of the three systems creates personality.

This is what Scientific American wrote [via Amzon.com]:

Where does adult personality come from? Why are we all different? These are the questions energizing Judith Rich Harris’s new book.
…
Harris then develops a complex scheme based on "the modular mind," a framework set forth by Harvard University evolutionary psychologist Steven Pinker and others. (Harris herself has no doctorate and is housebound by systemic sclerosis and lupus, two autoimmune disorders.) She describes three modules—the relationship system, the socialization system and the status system—and explains how each contributes its part to making us who we are. The relationship system starts in the cradle as infants study and learn the faces and voices of the people around them, collecting information that helps form personality. The socialization system adapts people to their culture. The status system takes all the information collected during childhood and adolescence and shapes and modifies our personalities in accord with our environments.

Harris’s last chapter lays out her theory in tabular form, explaining how each module interacts with the others to produce our distinct personalities. It is lavishly footnoted, like the rest of the book, shoring up her strategy of pointing out the failings of other models and then proposing her own. Her goal, she writes, is to explain the variations in personality that cannot be attributed to variations in people’s genes.

Tomorrow: No Two Alike (continued)

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TECH TALK: Good Books: No Two Alike (Part 2)

Judith Rich Harris has an engaging writing style and covers a wide range of research in her book. There are a number of references to her earlier book, “The Nurture Assumption.”

The Economist wrote about Harris’ first book in a 1998 review: “Parents, she argues, have no important long-term effects on the development of the personality of their children. Far more important are their playground friends and neighbourhood companions. Ms Harris takes to bits the assumption which has dominated developmental psychology for almost half a century. Freud was wrong; Philip Larkin was wrong. It is not your mum and dad who fuck you up, but the other kids on the block and those fellow brats in the classroom…Mum and dad surely cannot be ditched completely. Young adults may, as Ms Harris argues, be keen to appear like their contemporaries. But even in those early years, parents have the power to open doors: they may initially choose the peers with whom their young associate, and pick that influential neighbourhood. Moreover, most people suspect that they come to resemble their parents more in middle age, and that people’s child-rearing habits may be formed partly by what their parents did. So the balance of influences is probably complicated, as most parents already suspected without being able to demonstrate it scientifically. Even if it turns out that the genes they pass on and the friends their children play with matter as much as affection, discipline and good example, parents are not completely off the hook.”

William Saletan reviewed “No Two Alike” for The New York Times reviewed this March:

The mystery is why people — even identical twins who grow up in the same home with the same genes — end up with different personalities. The detective is Harris herself, a crotchety amateur, housebound because of an illness, who takes on the academic establishment armed only with a sharp mind and an Internet connection. Harris the author scrupulously follows clues; Harris the protagonist drives the story forward through force of character, arriving at a theory of personality that could be said to describe herself.
…
Your socialization system figures out how to conform to your group. Your relationship system figures out how to get along with each person. Your status system figures out how to compete. It monitors people's reactions, gathering information about how smart, pretty, weak or talented they think you are. It looks for virtues, activities and occupations at which you're most likely to best your peers. It notices tiny differences between the way people regard you and the way they regard others in your peer group, or even your twin. By choosing pursuits based on these differences, it magnifies them. It drives you to be different.

This is the paradox behind the book's subtitle. Human nature causes human individuality; the mental systems that we share are also the ones that distinguish us. But if these three systems are, as Harris concludes, the "perpetrators" of individuality as we know it, the mystery of how we got here gives way to the mystery of where we're going. The perpetrators remain at large. The evolutionary forces that gave us distinctive personalities don't end here. Human nature isn't finished with human individuality, or with itself.

“No Two Alike” is a fascinating book because it is a story about us and the people around us. Harris’ wonderful story-telling brings alive what could otherwise have been a dull and dreary scientific paper.

Tomorrow: The War of the World

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TECH TALK: Good Books: The War of the World

I am not much of a history book reader. Two experiences recently rekindled my interest. I had gone to a relative’s home as part of a social obligation. Not much of a talker, I was sitting around in their living room after the initial courtesies. The silent distant stares were getting a little awkward. As I looked around, my gaze fell on a ninth standard history guide book. I picked it up and started perusing it. It must have been more then a quarter century since I delved into a history book with anticipation!

The ninth standard portion was amazingly vast. It covered everything from the Harrapan Civilisation to the World Wars. I could not but marvel at how broad a swathe our Indian education system takes! Of course, the guide book had condensed the answer to every possible question into a few simple, easy-to-memorise sentences.

As I sat there for the next half-hour or so reading the book, a curiosity started taking shape within me. How did we come to be? That same evening, as I sat channel-surfing on TV, I stopped by “The History Channel.” The story being dramatised was about Hitler and Germany in the 1930s. It was quite something to see it all come so alive.

A few days, I came across a review of Niall Ferguson’s “The War of the World” and decided to buy it. The book discusses conflict in the twentieth century, with a focus on the fifty years from 1904 to 1953. I have just started reading the huge book – it is about 700 pages. It is quite engrossing. It will take me quite some time to read the entire book – given that I find very little free time nowadays. But, I would definitely recommend it for those who want to learn from the past and better understand the future – given the conflicts that we continue to face in the world. Keep in mind these words from Ferguson written in Foreign Affairs magazine: “The twentieth century was the bloodiest era in history. Despite the comfortable assumption that the twenty-first will be more peaceful, the same ingredients that made the last hundred years so destructive are present today. In particular, a conflict in the Middle East may well spark another global conflagration. The United States could prevent such an outcome -- but it may not be willing to.”

Why is this period in history so important? Ferguson writes: “The twentieth century was the bloodiest era in history. World War I killed between 9 million and 10 million people, more if the influenza pandemic of 1918­ - 19 is seen as a consequence of the war. Another 59 million died in World War II. And those conflicts were only two of the more deadly ones in the last hundred years. By one estimate, there were 16 conflicts throughout the last century that cost more than a million lives, a further six that claimed between 500,000 and a million, and 14 that killed between 250,000 and 500,000. In all, between 167 million and 188 million people died because of organized violence in the twentieth century -- as many as one in every 22 deaths in that period.”

Tomorrow: The War of the World (continued)

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TECH TALK: Good Books: The War of the World (Part 2)

Amazon.com has a review from Booklist: “Ferguson's broadest work to date, this sprawling book folds the author's previous theories of empire and economics into an international history of twentieth-century violence. What went wrong with modernity, he asks, such that the Fifty Years War from 1904 to 1953 could be the bloodiest in history, and why did so much violence happen at particular times (such as the early 1940s) and particular places (such as eastern Europe)? To the common answers of ethnic conflict and economic volatility, Ferguson adds, perhaps unsurprisingly, the decline of empires. Consistent with Empire and Colossus, the problem was frequently that the empires of the twentieth century were too strong not to fight, but that they were too weak, as illustrated by an analysis of Britain's reluctance to intervene in Germany before 1939. Coupled with ubiquitous and persistent notions of racial superiority and the ill-fitting contours of nation-states, the borderlands of empires--Manchuria, Poland, the Balkans--became the killing fields of the twentieth century. In chronicling what he labels the "descent of the West," Ferguson challenges many scholars on many fronts, and deploys a broad spectrum of sources--from war novels to population data to his perennial attention to the bond markets. His ultimate conclusion--that the War of the World was the suicide of the West--is tinged with regret about what might have been, and perhaps even a Gibbon-esque anxiety about the coming Asian century.”

The Guardian wrote in a review:

According to Ferguson, the 20th-century bloodbath was down to the dreadful concatenation of ethnic conflict, economic volatility and empires in decline. Despite genetic advances that revealed man's essential biological similarities, the 1900s saw wave upon wave of ethnic strife thanks (pace Richard Dawkins) to a race "meme" entering public discourse. Across the world, the idea of biologically distinct races took hold of the 20th century mindset to deadly effect.

Tensions along increasingly conscious ethnic faultlines (in regions such as the eastern edges of Germany) frequently spilt over into conflict during periods of economic volatility. For extremities of wealth and poverty proved far more incendiary than the steady, immiserating effects of economic depression. When ethnicity and financial turbulence then occurred in the context of retreating or expanding empires - British, German, or Soviet - the capacity for bloodshed proved even greater. And, as a final thought, the 20th century witnessed not the triumph of the west, but its inexorable descent.

The Boston Globe interviewed Ferguson and had this to say in its introduction:

Ferguson maintains that the United States is unquestionably an imperial power, but because Americans don't like to think so, the US often fails to fulfill its imperial responsibilities. One crucial case in point for Ferguson is Iraq, where, in his view, an imperial power less in denial about itself would have known that such an invasion required forethought, vast resources, and the willingness to stick around for a very long time.

The theme of empire is central to the new book, as well. Ferguson believes the real problem with an empire shows up when it declines, at which time genocidal hatred is liable to break out among the ethnic groups it had governed. That's what happened, he argues, in the extraordinarily-often interethnically-violent 20th century, and what he worries may be underway in the Middle-East.

Here is a quote by Ferguson: “The really troubling thing is that all the things that happened in Central and Eastern Europe in the 1930s and `40s could happen in the Middle East now. The ingredients are there: You've got ethnic and religious hatred, economic volatility, and an empire- the American empire-declining and losing control. Not a great scenario.”

The past is often a guide to the future. Ferguson’s analysis of conflict in the previous century holds a lot of clues for what can happen next.

Tomorrow: In Spite of the Gods

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TECH TALK: Good Books: In Spite of the Gods

Let us move on from world history to a brief history of the New India. Our guide is Edward Luce, the former South Asia bureau chief of the Financial Times. Luce’s book is about “the strange rise of modern India.” The title is a bit weird at first glance: “In Spite of the Gods.” But if one looks past that, it is an insightful book about what has changed (and is changing) in India. Sometimes, those of us who are on the ground in India, cannot easily understand these changes. An outsider’s perspective is what Luce brings in – and does it very well.

Here is a brief about the book from Random House:

India remains a mystery to many Americans, even as it is poised to become the world’s third largest economy within a generation, outstripping Japan. It will surpass China in population by 2032 and will have more English speakers than the United States by 2050. In In Spite of the Gods, Edward Luce, a journalist who covered India for many years, makes brilliant sense of India and its rise to global power. Already a number-one bestseller in India, his book is sure to be acknowledged for years as the definitive introduction to modern India.

In Spite of the Gods illuminates a land of many contradictions. The booming tech sector we read so much about in the West, Luce points out, employs no more than one million of India’s 1.1 billion people. Only 35 million people, in fact, have formal enough jobs to pay taxes, while three-quarters of the country lives in extreme deprivation in India’s 600,000 villages. Yet amid all these extremes exists the world’s largest experiment in representative democracy—and a largely successful one, despite bureaucracies riddled with horrifying corruption.

Luce shows that India is an economic rival to the U.S. in an entirely different sense than China is. There is nothing in India like the manufacturing capacity of China, despite the huge potential labor force. An inept system of public education leaves most Indians illiterate and unskilled. Yet at the other extreme, the middle class produces ten times as many engineering students a year as the United States. Notwithstanding its future as a major competitor in a globalized economy, American. leaders have been encouraging India’s rise, even welcoming it into the nuclear energy club, hoping to balance China’s influence in Asia.

Early on in the book, Luce writes about the ultimate Indian fascination – the village. He rips apart those who talk of trying to keep villages the way they are, and comes out in favour of urbanization. In an interview with The Hindu, he had this to say: “There is a very strong and deeply rooted cultural romanticism about the village in India. It's primarily upper caste urban people who are the keepers of the flame of this romanticism. I want India to develop and development means urbanisation. It is an inescapable fact. I don't believe that urbanisation means liquidation of culture. France is 90 per cent urban. France is quintessentially French. India has a great urban civilisational heritage. It's not as if India's cradle of culture is purely the village. But partly because of the distortions of the colonial era and partly because — and this is not an original point I'm making — the villages are the least tainted and least interfered with by the colonial presence, the village became the repository in the freedom movement dialectic of Indian culture. That romanticism — which I think is very conservative — is still quite widespread. It is not stopping India urbanising but it's making the urban experience far more callous and bloody than it could be. Urbanisation can be done well. It can be anticipated. Demographic trends can be projected and you can start putting infrastructure in place without having to be Japanese.”

Reading this reminded me of my colleague, Atanu Dey, and his ideas about RISC (Rural Infrastructure and Services Commons). It was nice to see an echo in Luce’s thinking.

Next Week: Good Books (continued)

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TECH TALK: Good Books: In Spite of the Gods (Part 2)

The Guardian reviewed Edward Luce’s book in August:

Several recent books have examined the savage inequalities between the country's burgeoning, educated, urban elite and the shockingly poor who live in the vast hinterlands. Luce's thoughtful and thorough book - 'an unsentimental evaluation of contemporary India against the backdrop of its widely expected ascent to great power status in the 21st century' - fits right into this category.
He suggests the dichotomy of India in the book's subtitle and later calls India's rise 'strange' because, while becoming an important political and economic force, it has remained 'an intensely religious, spiritual and, in some ways, superstitious society'.

It is always difficult to structure a book like this one, but Luce manages well by breaking up the narrative into neat chapters, each dealing with a different theme and each capable of standing on its own feet. We are offered accounts of India's 'schizophrenic' flourishing economy; its state machinery; its caste conflicts; the rise of Hindu nationalism; the dynastic nature of its politics; its relationship with Pakistan and its Muslim minority; its relationship with the US and China; the country's experience of grappling with modernity and urbanisation.

The Hindu Business Line had a detailed review of Luce’s book:
The book concludes with a discussion of `India's huge opportunities and challenges in the twenty-first century'. Judging by the living conditions of ordinary Indians, rather than by `the drama of national events,' Luce is of the view that the country is moving forward `on a remarkably stable trajectory'. And, as opposed to China, India has given a higher priority to stability than it has to efficiency.

"India is like a lorry with twelve wheels. If one or two puncture, it doesn't go into the ditch," is a quote of Myron Weiner that he cites. That way, China may have fewer wheels so it can travel faster, but "people far beyond China's borders worry about what would happen if a wheel came off," notes Luce, extending Weiner's analogy.

Though investors are deterred by the babus, institutional advantages such as `an independent judiciary and a free media' may make India the proverbial tortoise that can overtake the Chinese hare, postulates the author. "India can also draw on a deep well of intellectual capital."

Yet, for those closer home, a word of caution is not to take our economic strengths for granted. "As the joke goes, `India never misses an opportunity to miss an opportunity'. It is also suffering from a premature spirit of triumphalism," alerts Luce.

India’s rise has just begun. There are a lot of things that can still go wrong. But I feel that for the first time, there is an optimism in people that tomorrow will be better than today. And that can make all the difference. My advice to those taking a flight to India this winter: pick a copy of Luce’s book and read it en route. It will help you understand India better.

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TECH TALK: Good Books: The Go Point

Decision-making is something we do all the time. Some are made almost sub-consciously, while others are made after great thought. I came across a couple of books recently which delve into the process of how we make decisions. The first is Michael Useem’s “The Go Point.”

Here is how the book is described [via Amazon.com]:

The Go Point—the moment of truth when you have to say “yes” or “no” when it’s time to get off the fence.

Michael Useem—through dramatic storytelling—shows how to master the art and science of being decisive. He places you smack in the middle of people facing their go point, where actions—or lack of them—determined the fates of individuals, companies, and countries.

Why on earth did Robert E. Lee send General George Pickett on an almost suicidal charge against the Union lines at Gettysburg?

How does the leader of a firefighting crew make life-or-death decisions, directing his people—with little information about weather patterns to guide him—to go up or down the mountain? One direction means safety, the other danger.

You’ve just assumed responsibility for a scandal-wracked corporation, a company teetering on the brink of disaster. What you decide over the course of the next several days will have consequences for thousands of employees and investors. How do you fulfill your responsibilities?

Michael Useem makes you feel as if “you are there,” right in the center of the action. He was there: tramping up and down the mountain where firefighters made their momentous decisions; walking the battlefield at Gettysburg to see for himself just what General Pickett faced before making his ill-fated charge; going into a trading pit where million-dollar buy-and-sell decisions are made that affect fortunes of both the firm and the person making the call.

You’ll discover why some decisions were flawless, perfectly on target, and others utterly disastrous. Most of all, you’ll learn how to make the right calls yourself, whether you’re changing your career, hiring an assistant, launching a product, or deciding on a potential acquisition or merger.

Smartly written and offering unusual insights into the minds of decision makers such as General Lee, The Go Point will provide the guidance for you to move with confidence when it’s your turn to get off the fence.

800-CEO-Read writes:

[Useem] is the author of some of the best books ever written on leading, particularly Leadership Moment from the late 90s, a book which uses examples of people leading while confronted with real world situations. Yes, his credentials are impressive, and his view on leadership above par, but what also sets him apart from the pack of business book authors is his storytelling ability. Michael Useem is a damn fine writer.

The Go Point continues his look at leadership, but focuses on that crucial decision-making point where we have to “go” and move forward.
….
I found the story about the Colorado forest fire to be intense and riveting. To understand what the firefighters went through and to understand the decisions that were made, Useem walked the landscape with one of the survivors. He tells the tale and then points out the decisions and the errors that were made with too little information. He describes the tremendous stress of battling a raging forest fire and how that affects decision-making.

Tomorrow: The Go Point (continued)

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TECH TALK: Good Books: The Go Point (Part 2)

Knowledge@Wharton interviewed Michael Useem, the author of “The Go Point.” Here are some excerpts:

We all make decisions all the time and most of them are highly personal -- [such as] what we put on this morning when we got up and got out of the house. A small subset of our decisions, though, has ramifications for people around us, and sometimes those are people we are responsible for. They work for us, we command them, and they may be in our community in some way.

There is a strain of thinking that is probably summed up with the psychologists' clinical term "decidophobia"; some people,[in considering] even what color clothing to put on in the morning, just simply balk at that decision. If it's highly personal, that's OK. The consequence is you don't get out of the house on time. But when it affects other people, you cannot suffer from that particular clinical syndrome, because you are going to ultimately cause others around you distress, maybe even harm.
…
Decision making and leadership can be difficult, but it can be learned. And I think the basic premise that underlies the book -- I think it just underlies reality -- is that decision making as a skill is learned really by making decisions. Critically though, [it means] looking back on those decisions, to make certain we don't make the same mistake twice, that you have some sense for what went right as well.

By way of example: I interviewed the chief executive of Lenovo -- which is of course China's big PC maker -- on this very topic for a couple of hours recently, and I put the question in summary this way (his name is Liu): "Mr. Liu, you came out of a state owned and operated research center. The government of China funded you, that was where your budget was from, but 22 years back you broke off with a couple of friends to create what is now the world's third-largest PC maker. How did you learn to make decisions along the way -- the decisions being how to market, how to brand, how to price, how to hire -- when you were doing none of those, making none of those decisions before?"

The answer really has stuck with me. At the end of every week, going back now more than 20 years, on Friday afternoon, he sits down with his direct reports, his top team, the five or six people he's closest to. They take time to review everything they've done that week -- what decisions were good, which ones were terrible. He has no MBA degree, no formal training in decision making, leadership, or management.

I say all that by way of coming back to the main point, which is decision making is a learned skill. You've got to make decisions and look back on them.
….
But in addition to that, becoming more self-conscious about getting the right data, having the right timing, talking to people who you know will not provide a biased read or filter through which they're going to pass their advice -- these are among what I would end up calling in the book the tools of leadership. So on the one hand, intuition is very important.

On the other hand, a set of tools is quite important also for helping all of us make good decisions. And just to come back to the main point: they're all learned.

The book can be especially good reading for entrepreneurs. I have faced (and continue to face) “go points” all the time. One has to make decisions and live with them. For an early-stage company, a single wrong decision can make things very difficult. Hopefully, Useem’s book will help us decide right.

Tomorrow: Winning Decisions

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TECH TALK: Good Books: Winning Decisions

Another book that I came across on decision-making is J. Edward Russo and Paul Schoemaker’s “Winning Decisions.” In their book, the focus is on “getting it right the first time.” From the book’s description:

Decision-making is a business skill which managers often take for granted in themselves and others–but it's not as easy as some might think. The authors, whose expertise has been sought out by over a hundred companies, including Arthur Andersen, Hewlett-Packard, IBM, and Unilever, contend that decision-making, like any other skill, must be developed and honed if it is to be used effectively. Winning Decisions offers step-by-step analyses of how people typically make decisions, and provides invaluable advice on how to improve your chances of getting your next big decision right the first time. The book is packed with worksheets, tools, questionnaires, case studies, and anecdotes analyzing major decisions made by organizations like British Airways, NASA, Shell Oil, and Pepsi. Some of the proven, straightforward techniques covered in Winning Decisions include how to:

Reframe issues to ensure that the real problem is being addressed

Improve the quality and quantity of your options

Convert expert yet conflicting opinions into useful insights

Make diversity of views and conflict work to your advantage

Foster efficient and effective group decision-making

Learn from past decisions--your own and those of others

Here is what Publisher’s Weekly wrote about the book (published in 2001):

The coauthors of 1989's Decision Traps offer a clear, straightforward explanation of how managers should perform one of their most basic tasks: making a decision. Russo, professor of marketing and behavior science at Cornell, and Shoemaker, research director of Wharton's Mack Center for Technology and Innovation, break their method into four steps: framing decisions, i.e., factoring in difficulties like information overload and the "galloping rate of change," and thereby determining which choices need to be addressed and which ones don't; gathering real intelligence, not just information that will support internal biases; coming to conclusions, i.e., assessing how one's company acts on the intelligence gathered; and learning from experience. The authors walk readers through each of the steps. Unlike many business books, this one is akin to a workbook, providing how-tos, case studies and worksheets so readers can put their ideas into play immediately. The authors highlight key concepts, and they even show an occasional humorous side. However, they stress that even improving the way one goes about making decisions won't guarantee that they'll be the right ones. Decisions still have to be executed successfully, and luck is always a factor. Still, with better decision-making skills, the odds are bound to go up.

Why is decision-making so important? I’d like to end with a quote from the book’s introduction: “In our Information Age, the race will go not to the strong but to the cognitively swift.”

Tomorrow: Beautiful Evidence and More Than You Know

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TECH TALK: Good Books: Beautiful Evidence and More Than You Know

Beautiful Evidence

I have been a fan of Tufte ever since I heard a presentation of his more than 15 years ago in the US. “Beautiful Evidence” is his latest book. Tufte’s forte is information visualisation. Here is what Wikipedia has to say about Tufte: “Tufte's work is important in such fields as information design and visual literacy, which deal with the visual communication of information. He coined the term ‘chartjunk’ to refer to useless, non-informative, or information-obscuring elements of information displays. Tufte's work argues strongly against the inclusion of any decoration in visual presentations of information and claims that ink should only be used to convey significant data and aid its interpretation.”

The focus in this book is on evidence presentation. As Tufte writes in the introduction: “[The book] is about how seeing turns into showing, how empirical observations turn into explanations and evidence, suggests new designs, and provides analytical tools for assessing the credibility of evidence presentations.”

Tufte’s books are a visual delight when it comes to the photos and illustrations – with the accompanying analysis. This book is no different. My favourite section in the book is the discussion about sparklines – “intense, simple, word-sized graphics.” Sparklines can be especially useful for displaying data on mobiles.

More Than You Know

Michael Mauboussin is chief investment strategist at Legg Mason Capital. I was introduced to his writings by Chetan Parikh, Abhay Bhagat and Yuvaraj Galada. His essays are very thought-provoking. His book “More Than You Know” is a collection of his essays written over the past few years.

Here is what Publisher’s Weekly has to say [via Amazon.com]:

Mauboussin is not your average Wall Street equity analyst, writing investment recommendations whose topical interest wanes a few days after the report is issued. His strategy reports begin with scientific findings from diverse fields, then show why an investor should care. This book is a collection of 30 short reports, revised and updated, covering animal behavior ("Guppy Love: The Role of Imitation in Markets"), psychology ("Why Zebras Don't Get Ulcers"), philosophy of science ("The Janitor's Dream: Why Listening to Individuals Can be Hazardous to Your Wealth") and other fields. Each essay describes a fascinating scientific finding, then develops and applies it to personal investing. "Survival of the Fittest," for example, begins by discussing how Tiger Woods improved his golf swing, introduces the concept of fitness landscapes from evolutionary biology, then explains why investors in commodity-producing companies should like strong centralized management, while technology-stock buyers should prefer flexible organizations with lots of disruptive new ideas. The book is breezy and well written, but not dumbed down, and provides extensive references. It can be read for entertainment as popular science or to broaden your investment thinking.

You can find some of Mauboussin’s recent essays here.

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TECH TALK: Good Books: The Long Tail

Chris Anderson is the editor of Wired. His book, “The Long Tail”, has been one of the most eagerly awaited books of the year. He first espoused his ideas in a Wired article in October 2004. Subsequently, he started a blog which built on the theory of the long tail. The essence is captured in the byline of the book: “Why the future of business is selling less of more.”

This is what Chris wrote recently on his blog: “Hits Aren't Dead...What is dead is the monopoly of the hit. For too long hits or products intended to be hits have had the stage to themselves, because only hit-centric companies had access to the retail channel and the retail channel only had room for best-sellers. But now blockbusters must share the stage with a million niche products, and this will lead to a very different marketplace.” Think of hits as the head, and the niche products as the long tail. The future is about being able to monetise the long tail.

From the book’s description:

The Long Tail" is a powerful new force in our economy: the rise of the niche. As the cost of reaching consumers drops dramatically, our markets are shifting from a one-size-fits-all model of mass appeal to one of unlimited variety for unique tastes. From supermarket shelves to advertising agencies, the ability to offer vast choice is changing everything, and causing us to rethink where our markets lie and how to get to them. Unlimited selection is revealing truths about what consumers want and how they want to get it, from DVDs at Netflix to songs on iTunes to advertising on Google.

However, this is not just a virtue of online marketplaces; it is an example of an entirely new economic model for business, one that is just beginning to show its power. After a century of obsessing over the few products at the head of the demand curve, the new economics of distribution allow us to turn our focus to the many more products in the tail, which collectively can create a new market as big as the one we already know.

The Long Tail is really about the economics of abundance. New efficiencies in distribution, manufacturing, and marketing are essentially resetting the definition of what’s commercially viable across the board. If the 20th century was about hits, the 21st will be equally about niches.

The Economist wrote: “The niche, the obscure and the specialist, Mr Anderson argues, will gain ground at the expense of the hit. As evidence, he points to a drop in the number of companies that traditionally calculate their revenue/sales ratio according to the 80/20 rule -- where the top fifth of products contribute four-fifths of revenues. Ecast, a San Francisco digital jukebox company, found that 98% of its 10,000 albums sold at least one track every three months. Expressed in the language of statistics, the experiences of Ecast and other companies such as Amazon, an online bookseller, suggest that products down in the long tail of a statistical distribution, added together, can be highly profitable. The internet helps people find their way to relatively obscure material with recommendations and reviews by other people (and for those willing to have their artistic tastes predicted by a piece of software) computer programs which analyse past selections.”

The Wall Street Journal wrote in a review:

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.

The long tail has lifted into prominence troupes like the Lonely Island, or bands like the Arctic Monkeys (popularized by MySpace, the user-generated site aimed at young people), or art-house movies like "Capturing the Friedmans" (made popular through Netflix, the online-based movie-rental outfit). Thanks to technology's power to target pockets of consumers, niche forms of cultural expression are reaching otherwise fractional audiences, and the fractions are adding up in ways they never have before. In the process, the economy is reshaped, and our tastes are too.

Blockbuster may have to devote its (limited) shelf space to 50 copies of the latest action blockbuster; Netflix can (theoretically) offer every movie ever made. Through sophisticated filtering, Netflix and Amazon and iTunes can make a deep inventory pay off by matching niches with consumers. Technology has shattered an aggregate popular culture -- the icon-producing kind. But it has also come to its rescue.

Tomorrow: The Long Tail (continued)

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TECH TALK: Good Books: The Long Tail (Part 2)

Steven Johnson wrote about the book: “It occurred to me reading The Long Tail that the general trend from mass to niche can explain some of this increased complexity: niches can speak to each other in shorthand; they don't have to spell everything out. But at the same time, the niche itself doesn't have to become any more aesthetically or intellectually rich compared to what came before. If there's a pro wrestling niche, the creators don't have to condescend to the non-wrestling fans who might be tuning in, which means that they can make more references and in general convey more information about wrestling -- precisely because they know their audience is made up of hard core fans. But it's still pro wrestling. The content isn't anything to write home about, but the form grows more complex. In a mass society, it's harder to pull that off. But out on the tail, it comes naturally.”

An example from the book: “What’s extraordinary is that virtually every single one of those tracks [on Rhapsody] will sell. From the perspective of a store like Wal-Mart, the music industry stops at less than 60,000 tracks. However, for online retailers like Rhapsody the market is seemingly never-ending. Not only is every one of Rhapsody’s top 60,000 tracks streamed at least once each month, but the same is true for its top 100,000, top 200,000, and top 400,000 -- even its top 600,000, top 900,000, and beyond. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it’s just a handful of people every month, somewhere in the world. This is the Long Tail.”

The New Yorker wrote:

Both eBay and Google turn out, in Anderson’s account, to be long-tail businesses, too. On any given day, about thirty million individual items are bought and sold on eBay, many of them cheap and obscure. Barely a decade after Pierre Omidyar founded eBay, more than seven hundred thousand Americans report it as their primary or secondary source of income, according to a study by the market-research firm AC Nielsen. For Google, the long tail is populated by small advertisers. Major corporations pay to get their ads placed next to the results of popular search terms, such as “luxury S.U.V.s” and “flat-screen televisions.” But much of Google’s annual revenue, which now exceeds five billion dollars, comes from tiny companies whose ads appear next to queries like “Victorian jewelry” and “Hudson Valley inns.”
...
The forces behind the long tail are largely technological: cheap computer hardware, which reduces the cost of making and storing information products; ubiquitous broadband, which cuts the cost of distribution; and elaborate “filters,” such as search engines, blogs, and online reviews, which help to match supply and demand. “Think of each of these three forces as representing a new set of opportunities in the emerging Long Tail marketplace,” Anderson suggests. “The democratized tools of production are leading to a huge increase in the number of producers. Hyperefficient digital economies are leading to new markets and marketplaces. And finally, the ability to tap the distributed intelligence of millions of consumers to match people with the stuff that suits them best is leading to the rise of all sorts of new recommendation and marketing methods, essentially serving as the new tastemakers.”

Overall, a book definitely worth reading for everyone in the business of selling.

Tomorrow: The Change Function

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TECH TALK: Good Books: The Change Function

I was enthralled by Pip Coburn's writings on technology while he was at UBS. So, it didn't take me much time to pick up his book, “The Change Function.” It is about why some technologies succeed -- and others fail. The short answer:

The Change Function = f(user crisis vs. total perceived pain of adoption).

From the book’s description:

After years of studying countless winners and losers, Coburn has come up with a simple idea that explains why some technologies become huge hits (iPods, DVD players, Netflix), but others never reach more than a tiny audience (Segways, video phones, tablet PCs). He says that people are only willing to change when the pain of their current situation outweighs the perceived pain of trying something new.

In other words, technology demands a change in habits, and that’s the leading cause of failure for countless cool inventions. Too many tech companies believe in “build it and they will come” -- build something better and people will beat a path to your door. But, as Coburn shows, most potential users are afraid of new technologies, and they need a really great reason to change.

Here is an excerpt from the book (from Fast Company):

Technologists think we'll gladly adopt an innovation when it's manifestly smarter. But change is an emotion-laden process. Disrupting, game-changing technologies? No way. Most of us despise being disrupted and don't wish to be game-changed.

The technologies that stand the best chance of winning us over are enhanced editions of products we already understand. Flat-panel televisions, for example, are much better televisions with low perceived pain of adoption. Everyone "gets" what a basic television is all about. There's nothing to learn. At the same time, flat-panel TVs address a powerful need. True, it's both subtle and self-fulfilling: It's the psychic pain we feel for not having one. Since 19% of televisions sold in 2005 were flat panels, the technology appears set to hit a societal tipping point. Anyone who doesn't have one will feel deeply embarrassed about it. If that's not a crisis, I don't know what is.

A technology's success or failure is not merely fated. Instead, it demands action of one of two varieties. Technologists can identify and intensify a customer crisis. Or they can reduce the perceived pain of adoption.

Tomorrow: The Change Function (continued)

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TECH TALK: Good Books: The Change Function (Part 2)

Tom Evslin wrote about the book: “It’s important, says Pip, not to confuse a perceived crisis on the part of the would-be vendor with a crisis on the part of the prospect. The oft-failed Picturephone (not be confused with cell phones that take pictures) was an answer to a crisis felt by telcos, not their customers. They needed new high-margin products. TPPA (Total Perceived Pain of Adoption) for this product/service has always been high both because we aren’t used to being seen when we talk remotely AND because the first users (and someone has to be the first user) can’t find anyone else to talk to.”

It's a great read -- and a great reality check for those like me who believe in the “build it and they will come” approach! This excerpt captures the essence of the book:

My aim is to address two key issues that exist in the technology industry today.

ISSUE 1: HIGH-TECH FAILURE RATES STINK
The commercial failure rate of nominally great new
technologies is troublingly high.
That failure rate is consistent with the hatred and distrust
most normal human beings -- which I like to call Earthlings
tend to have of high technology.
That hatred and distrust is a bummer since our little planet
can use all the help technology might provide.

ISSUE 2: SUPPLIERS THINK THEY ARE IN CHARGE BUT IN REALITY USERS ARE IN CHARGE
The technology industry operates according to an implicit
supplier-oriented assumption.
That assumption is that if one builds great new disruptive
technologies and lets cost reduction kick in,
markets will naturally appear.This is known as
”build it and they will come.”

This mentality is a major problem. Adopting a new technology requires changing the habits of users. The industry acts as if change is easy when it’s actually quite difficult. Users will change their habits when the pain of their current situation is greater than their perceived pain of adopting a possible solution -- this is the crux of The Change Function .

I believe that users are always in charge and that supply is a necessary but not sufficient condition for commercial success. Companies and products geared toward this holistic user orientation will succeed at far greater rates than those stuck in a supplier-oriented mind-set.

The goal of this book is to look at what has failed in the past, to understand how the industry came to be in the position it is in today. And, through the prism of The Change Function, to spotlight examples of what might and might not work in the future and to examine a few corporate cultures that seem to get it. But this is not eight easy steps to success. Change is not easy.

Tomorrow: Everyware

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TECH TALK: Good Books: Everyware

Adam Greenfield's book has a catchy title. “Everyware” is about the dawning age of ubiquitous computing. Here is the book's description:

Ubiquitous computing--almost imperceptible, but everywhere around us--is rapidly becoming a reality. How will it change us? how can we shape its emergence?

Smart buildings, smart furniture, smart clothing... even smart bathtubs. networked street signs and self-describing soda cans. Gestural interfaces like those seen in Minority Report. The RFID tags now embedded in everything from credit cards to the family pet.

All of these are facets of the ubiquitous computing author Adam Greenfield calls "everyware." In a series of brief, thoughtful meditations, Greenfield explains how everyware is already reshaping our lives, transforming our understanding of the cities we live in, the communities we belong to--and the way we see ourselves.

Here is an excerpt (via A List Apart):

Everyware is an attempt to describe the form computing will take in the next few years. Specifically, it’s about a vision of processing power so distributed throughout the environment that computers per se effectively disappear. It’s about the enormous consequences this disappearance has for the kinds of tasks computers are applied to, for the way we use them, and for what we understand them to be.

Although aspects of this vision have been called a variety of names -- ubiquitous computing, pervasive computing, physical computing, tangible media, and so on. I think of each as a facet of one coherent paradigm of interaction that I call everyware.

In everyware, all the information we now look to our phones or Web browsers to provide becomes accessible from just about anywhere, at any time, and is delivered in a manner appropriate to our location and context.

In everyware, the garment, the room and the street become sites of processing and mediation. Household objects from shower stalls to coffee pots are reimagined as places where facts about the world can be gathered, considered, and acted upon. And all the familiar rituals of daily life, things as fundamental as the way we wake up in the morning, get to work, or shop for our groceries, are remade as an intricate dance of information about ourselves, the state of the external world, and the options available to us at any given moment.

In all of these scenarios, there are powerful informatics underlying the apparent simplicity of the experience, but they never breach the surface of awareness: things Just Work.

Overall, “Everyware” is a fascinating insight into tomorrow's world.

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TECH TALK: Good Books: The Search

The Search box has become part of our life. Those among us who spend a significant portion of our time online probably end up using Search multiple times a day to find anything and everything. Satisfying our innate desire to Search has given Google a market cap of over $100 billion. How did it happen? How did Search become such an integral part of our online life? How did Google come to be? This is what John Battelle answers in his book entitled “The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture.”

Amazon.com's review states:

This ambitious book comes with a strong pedigree. Author John Battelle was a founder of The Industry Standard and then one of the original editors of Wired, two magazines which helped shape our early perceptions of the wild world of the Internet. Battelle clearly drew from his experience and contacts in writing The Search. In addition to the sure-handed historical perspective and easy familiarity with such dot-com stalwarts as AltaVista, Lycos, and Excite, he speckles his narrative with conversational asides from a cast of fascinating characters, such Google's founders, Larry Page and Sergey Brin; Yahoo's, Jerry Yang and David Filo; key executives at Microsoft and different VC firms on the famed Sandhill road; and numerous other insiders, particularly at the company which currently sits atop the search world, Google.

The Search is not exactly the corporate history of Google. At the book's outset, Battelle specifically indicates his desire to understand what he calls the cultural anthropology of search, and to analyze search engines' current role as the "database of our intentions"--the repository of humanity's curiosity, exploration, and expressed desires. Interesting though that beginning is, though, Battelle's story really picks up speed when he starts dishing inside scoop on the darling business story of the decade, Google. To Battelle's credit, though, he doesn't stop just with historical retrospective: the final part of his book focuses on the potential future directions of Google and its products' development. In what Battelle himself acknowledges might just be a "digital fantasy train", he describes the possibility that Google will become the centralizing platform for our entire lives.

The most fascinating chapter in the book is the last one, where Battelle looks to the future. Here is an excerpt which Battelle posted on his blog from the chapter entitled “Perfect Search”:

In the near future, search will metastasize from its origins on the PC-centric Web and be let loose on all manner of devices. This has already begun with mobile phones and PDAs; expect it to continue, viruslike, until search is built into every digital device touching our lives. The telephone, the automobile, the television, the stereo, the lowliest object with a chip and the ability to connect - all will incorporate network-aware search.

This is no fantasy; this is simple logic. As more and more of our lives become connected, digitized, and computed, we will need navigation and context interfaces to cope. What is TiVo, after all, but a search interface for television? ITunes? Search for music. That box of photographs under your bed and the pile of CDs teetering next to your stereo? Analog artifacts, awaiting their digital rebirth. How might you find that photo of you and your lover on the beach in Greece from fifteen years ago? Either you scan it in, or you lose it to the moldering embrace of analog obscurity. But your children will have no such problems; their photographs are already entirely digital and searchable - complete with metadata tagged right in (date, time, and soon, context).

The Search game has just begun. With it, we have seen a new business model emerge – contextual advertising with pay-per-click. The recent announcement by Microsoft about making its applications available over the Web as services, in part paid for by advertising, takes the revolution started by Google even further. The combination of broadband and mobile networks is creating a new world. While Battelle's book may not answer questions about who will be tomorrow's winners (other than Google), it does a great job in laying out the story of Search and a company which today threatens incumbents across many industries by making the right information available at the right time.

Tomorrow: The Google Legacy

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TECH TALK: Good Books: The Google Legacy

For those wanting more on Google's possible gameplan, John Battelle's “The Search” is just an appetiser. The real meal comes in the form of an e-book by Stephen E. Arnold entitled “The Google Legacy: How Google's Internet Search is Transforming Application Software.” The e-book, at $180, is not cheap. But it provides excellent insights into the technology platform that Google has built and how it is likely to be used in the future to deliver a wide range of virtual applications.

Here is an excerpt from the introduction on Arnold's site:

What kind of company is Google? The world mostly knows this high-flying, publicly traded West Coast company as the upstart that revolutionised search.
Wrong, says Stephen Arnold in this new ebook: Google is much more. New, radical and overlooked, Google is this era's transformational computing platform and could be about to unseat Microsoft from its throne.

Google is not just about search: search is merely one application you can load on its processor. Although Google has been releasing a series of separate application programs, the company is starting to assemble the mosaic pieces into a bigger picture. Its future will be about leveraging its innovative hardware/software infrastructure. In so doing, just as Microsoft replaced IBM, Google promises to replace Microsoft as Network Computing comes of age.
Written for business readers, especially senior executives of mid to large-sized, knowledge-based corporations, The Google Legacy places Google under a microscope, dissects Google's technology, evaluates its potential and determines that Google's future lies beyond search. Three appendices provide lists of Google patents, publishers who have indicated some type of relationship with Google, and universities working with Google-information that, according to the author, Google has sought to keep under wraps.

Information Week wrote recently:

Dig deeper into Google, dig into its software and engineering patents and you’ll find a roadmap for its future, says an author and online systems specialist, who believes the patents also spell bad news for Microsoft if the tech world moves to a new Google-dominated network paradigm.

“Google really doesn’t hide things,” said Stephen E. Arnold, who has written a book on his one-year odyssey studying the search firm. “Bill Gates is basically in the same spot he had IBM in. IBM was challenged by Microsoft and IBM didn’t understand Microsoft’s business model. It’s history repeating itself.”

Arnold, author of “The Google Legacy”, said in an interview, that it appears that Microsoft doesn’t understand Google in much the same way that IBM didn’t understand Microsoft 20 years ago. “It will be the Googleplex from 2004 to 2020 – a network paradigm,” said Arnold. “It will be enabled by Google’s approach to innovation.”
...
“These patents suggest that Google is looking beyond search, possibly targeting such companies as Microsoft, as Google tries to become the leading info tech company of the 21st Century,” he said.

In my view, Stephen Arnold's book is a fascinating glimpse into the 'technological wonder' of our times.

Tomorrow: Capitalism at the Crossroads

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TECH TALK: Good Books: Capitalism at the Crossroads

Stuart Hart originated the “Bottom of the Pyramid” ideas with CK Prahalad. His recently published book: Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World's Most Difficult Problems” therefore comes with high reader expectations.

Hart writes in the prologue: “In a single lifetime, the human population will have grown from two billion to eight billion. This growth is truly unprecedented. Never before in human history has a single generation witnessed such explosive change. It seems self-evident, therefore, that the policies we adopt, the decisions we make, and the strategies we pursue over the next decade will determine the future of our species and the trajectory of our planet for the foreseeable future. That is an awesome responsibility, to say the least. It is also a huge opportunity.”

One of the chapters has a discussion on HLL:

Unilever's Indian subsidiary, Hindustan Lever Limited (HLL), provides an interesting glimpse of the development of native capabilities in its efforts to pioneer new markets among the rural poor. HLL requires all employees in India to spend six weeks living in rural villages, actively seeks local consumer insights and preferences as it develops new products, and sources raw materials almost exclusively from local producers. The company also created an R&D center in rural India focused specifically on technology and product development to serve the needs of the poor. HLL uses a wide variety of local partners to distribute its products and also supports the efforts of these partners to build local capabilities. In addition, HLL provides opportunities and training to local entrepreneurs and actively experiments with new types of distribution, such as selling via local product demonstrations and village street theaters.

By developing local understanding, building local capacity, and encouraging a creative and flexible market entry process, HLL has been able to generate substantial revenues and profits from operating in low-income markets. Today more than half of HLL's revenues come from customers at the base of the economic pyramid. Using the approach to product development, marketing, and distribution pioneered in rural India, Unilever has also been able to leverage a rapidly growing and profitable business focused on low-income markets in other parts of the developing world. Even more important, through its new strategy, HLL has created tens of thousands of jobs, improved hygiene and quality of life, and become an accepted partner in development among the poor themselves.

I agree with the comment made by Simon London in a review for the Financial Times: “If you read a lot of business books, some of Hart’s case studies will seem a little stale. Inevitably, Hindustan Lever crops up. So does Cemex, the Mexican cement group used to illustrate everything from leadership genius to innovation...Still, there is much here to admire. Two hundred pages are hardly enough to solve the world’s ills, but they are plenty to sketch out the nature of the management challenge.”

Tomorrow: Communities Dominate Brands

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TECH TALK: Good Books: Communities Dominate Brands

An interesting book about the present and future times is Tomi Ahonen and Alan Moore's “Communities Dominate Brands: Business and Marketing Challenges for the 21st Century.”

From the book description: “[It] is a book about how the new phenomenon of digitally connected and empowered customer-communities, such as blogging, videogaming and mobile phone smart mobs are emerging as a force to counterbalance the power of the business and marketing. The book discusses how disruptive effects of digitalisation and connectedness introduce threats to business opportunities. The authors compellingly illustrate how modern consumers are forming communities and peer-groups to pool their power resulting in a dramatic revolution of how businesses interact with their customers. The book explores the problems faced by branding, marketing and advertising in this decade.”

Here is an excerpt from the foreword by Stephen Jones:

It is difficult to put a lens on a developing social trend moving as fast as ‘connected communities’ but Alan and Tomi have done that. Together they have made a rare and important breakthrough insight, have developed a credible hypothesis and backed it up with validated supporting points. This is not radical misinformed extremist hype. This work is an accurate description of the issue, the opportunity and the crisis confronting marketers if they don’t cut loose the shackles of the traditional advertising agency and TV network model and explore the world of possibilities recommended by this book.

Move quickly but act thoughtfully, even slowly. You want to implement this without sending your organization into a tail spin. The traditional marketing company that wastes its investments solely on TV advertising is underpinned by bureaucratic values of safety, efficiency and control. The marketing group that embraces these insights and moves forward to implement them is underpinned by interdependent values of sharing, listening, equity rights, global harmony and synergy. That’s a big leap.

One of the chapters in the book is about Generation-C: “Generation-C stands for the Community Generation. The defining and distinguishing characteristic for Gen-C is the continuous connection to and responding to digital communities. This is very different from any other communities. Even a die-hard 40 year old football fan of Chelsea may wear his colours every day and spend most of his free time with friends who are also fans. Yes, he is obviously a member of the Chelsea fan community. But when that Chelsea fan goes to visit his parents and suddenly gets into an argument, he is no longer a Chelsea community member. He probably will tell his Chelsea mates what happened, afterwards, next day at the pub. The difference is that a Gen-C member carries his/her community in the pocket and accesses that community at all times. Thus the young Gen-C member would share the anger and frustration of the argument with parents, within the next few minutes, via a text message to close friends...Members of Generation-C will regularly, on a daily basis, consult with friends and colleagues from their various communities. To do so, they have to have continous access to their network. They must be 'always-on' and only the mobile phone allows this.”

For more, you can also read the blog by the authors.

Tomorrow: On Dialogue

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TECH TALK: Good Books: On Dialogue

I was recommended a book “On Dialogue” on David Bohm by a colleague. It was in the context of a session we had organised for senior management of various companies to talk about some of the challenges they faced. While I have not yet got a copy of the book (it is on backorder at Amazon), I started reading about David Bohm and some of his work online.

David Bohm was a quantum physicist. But he also made contributions to a number of other fields. He developed a technique called “Bohm Dialogue.” According to Wikipedia:

Bohm Dialogue or Bohmian Dialogue is a form of free association conducted in groups, with no predefined purpose in mind besides mutual understanding and exploration of human thought. It aims to allow participants to examine their preconceptions, prejudices and patterns of thought. Bohm dialogue was developed by David Bohm, Donald Factor and Peter Garrett starting in 1983. Bohm published his views on dialogue in a series of papers between 1985 and 1991.

Bohm Dialogue (often referred to simply as Dialogue by its proponents) is conducted in groups of 20 to 40 people, who sit in a single circle. Participants "suspend" their thoughts, impulses and judgements – instead of speaking from their usual point of view, they carefully analyse their thoughts. According to the proposal, Dialogue should not be confused with discussion or debate, which, says Bohm, suggests working towards a goal rather than simply exploring and learning.

David Bohm wrote:

in a dialogue, however, nobody is trying to win. everybody wins if anybody wins. there is a different sort of spirit to it. in a dialogue, there is no attempt to gain points, or to make your particular view prevail. rather, whenever any mistake is discovered on the part of anybody, everybody gains. its a situation called win-win, whereas the other game is win-lose - if i win, you lose. but a dialogue is something more of a common participation, in which we are not playing a game against each other, but WITH each other. in dialogue, everybody wins
dialogue is really aimed at going into the whole thought process and changing the way the thought process occurs collectively.
...
in the dialogue group we are not going to decide what to do about anything. this is crucial. otherwise we are not free. we must have an empty space where we are not obliged to do anything, nor to come to any conclusions, nor to say anything or not say anything. its open and free. its an empty space. the word 'leisure' has that meaning of a kind of empty space. 'occupied' is the opposite of leisure; its full. so we have here a kind of empty space were anything may come in - and after we finish, we just empty it. we are not trying to accumulate anything. thats one of the points about a dialogue. as Krishnamurti used to say:"the cup has to be empty to hold something"

In today's “instant world” where one's attention span for a single activity is quite limited due to the barrage of interruptions, Bohm's ideas on thought and dialogue are quite inspirational and worth looking at more closely, especially in the workplace.

Next Week: More Good Books

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TECH TALK: Good Books: The End of Poverty

Poverty is one of India’s (and the world’s) biggest challenges. What can be done about it? Can we get to a world where we can ensure that everyone has a decent life? This is what Jeffrey Sachs’ book “The End of Poverty: Economic Possibilities for Our Time” discusses.

The Amazon review provides an introduction: “Celebrated economist Jeffrey Sachs has a plan to eliminate extreme poverty around the world by 2025. If you think that is too ambitious or wildly unrealistic, you need to read this book. His focus is on the one billion poorest individuals around the world who are caught in a poverty trap of disease, physical isolation, environmental stress, political instability, and lack of access to capital, technology, medicine, and education. The goal is to help these people reach the first rung on the ‘ladder of economic development’ so they can rise above mere subsistence level and achieve some control over their economic futures and their lives. To do this, Sachs proposes nine specific steps, which he explains in great detail in The End of Poverty. Though his plan certainly requires the help of rich nations, the financial assistance Sachs calls for is surprisingly modest--more than is now provided, but within the bounds of what has been promised in the past. For the U.S., for instance, it would mean raising foreign aid from just 0.14 percent of GNP to 0.7 percent. Sachs does not view such help as a handout but rather an investment in global economic growth that will add to the security of all nations. In presenting his argument, he offers a comprehensive education on global economics, including why globalization should be embraced rather than fought, why international institutions such as the United Nations, International Monetary Fund, and World Bank need to play a strong role in this effort, and the reasons why extreme poverty exists in the midst of great wealth. He also shatters some persistent myths about poor people and shows how developing nations can do more to help themselves.”

Here is an excerpt from an interview of Sachs in Mother Jones:

MJ: What do you say to critics who argue that it's a waste to put more money into a development system that hasn't used that money very effectively thus far?

JS: Well, we have to be smart about whatever we're doing. But I'm quite convinced that, broadly speaking, economic development works. The main arguments of the Millennium Project Report, and the main argument of my book is that there are certain places on the planet that, because of various circumstances—geographical isolation, burden of disease, climate, or soil—these countries just can't quite get started. So it's a matter of helping them get started, whether to grow more food or to fight malaria or to handle recurring droughts. Then, once they're on the first rung of the ladder of development, they'll start climbing just like the rest of the world.
…
MJ: What about aid being sent to countries that have a serious problem with corruption? Some have argued that large amounts of aid will merely prop up those regimes. Can poverty be eradicated while corrupt politicians are in office?

JS: My experience is that there's corruption everywhere: in the U.S., in Europe, in Asia, and in Africa. It's a bit like infectious disease—you can control it, but it's very hard to eradicate it….But, let me note that the world successfully eradicated small pox, and not just in countries that scored high on a governance index but in all parts of the world. This was an international effort which targeted a specific outcome undertaken by professionals using a proven technology and a very extensive monitoring system. And that's the general model for our aid proposals. Nothing is done on trust. Everything should be done on a basis of measurement and monitoring. When you really focus, there are so many ways to be clever about how to do this to make it work better. Don't just send money; send bed nets, send in auditors, make targets quantitative. There are a lot of tricks, a lot of ways, that if one is practical about this, one can get results.

Sachs’ book is one of hope – that one of the world’s biggest problems can be solved in our lifetime.

Tomorrow: Collapse

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TECH TALK: Good Books: Collapse

Jared Diamond’s “Collapse: How Societies Choose to Fail or Succeed” follows “Guns, Germs and Steel.” The latter discussed how society evolved through the centuries. The former discusses specifically on how certain societies fare.

Here is an excerpt from an article by the author in The New York Times:

What lessons can we draw from history? The most straightforward: take environmental problems seriously. They destroyed societies in the past, and they are even more likely to do so now. If 6,000 Polynesians with stone tools were able to destroy Mangareva Island, consider what six billion people with metal tools and bulldozers are doing today. Moreover, while the Maya collapse affected just a few neighboring societies in Central America, globalization now means that any society's problems have the potential to affect anyone else. Just think how crises in Somalia, Afghanistan and Iraq have shaped the United States today.

Other lessons involve failures of group decision-making. There are many reasons why past societies made bad decisions, and thereby failed to solve or even to perceive the problems that would eventually destroy them. One reason involves conflicts of interest, whereby one group within a society (for instance, the pig farmers who caused the worst erosion in medieval Greenland and Iceland) can profit by engaging in practices that damage the rest of society. Another is the pursuit of short-term gains at the expense of long-term survival, as when fishermen overfish the stocks on which their livelihoods ultimately depend.

History also teaches us two deeper lessons about what separates successful societies from those heading toward failure. A society contains a built-in blueprint for failure if the elite insulates itself from the consequences of its actions. That's why Maya kings, Norse Greenlanders and Easter Island chiefs made choices that eventually undermined their societies. They themselves did not begin to feel deprived until they had irreversibly destroyed their landscape.

The other deep lesson involves a willingness to re-examine long-held core values, when conditions change and those values no longer make sense. The medieval Greenland Norse lacked such a willingness: they continued to view themselves as transplanted Norwegian pastoralists, and to despise the Inuit as pagan hunters, even after Norway stopped sending trading ships and the climate had grown too cold for a pastoral existence. They died off as a result, leaving Greenland to the Inuit. On the other hand, the British in the 1950's faced up to the need for a painful reappraisal of their former status as rulers of a world empire set apart from Europe. They are now finding a different avenue to wealth and power, as part of a united Europe.

History can be a great teacher. Jared Diamond’s books are a great starting point to understanding of how we got where we are.

Tomorrow: The Only Sustainable Edge

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TECH TALK: Good Books: The Only Sustainable Edge

From Jared Diamond’s treatise on how civilizations collapse, we come to something more directly relevant to each on us: how can we make our companies more successful. John Hagel and John Seely Brown’s book “The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization” provides some answers. The book has the following introduction:

Many firms have used outsourcing and offshoring to shave costs and reduce operating expenses. But as opportunities for innovation and growth migrate to the peripheries of companies, industries, and the global economy, efficiency will no longer be enough to sustain competitive advantage.

In Your Next Business Strategy, renowned business thinkers John Hagel and John Seely Brown argue that the only sustainable advantage in the future will come from an institutional capacity to work closely with other highly specialized firms to get better faster. Enabled by the emergence of global process networks, firms will undergo a three-stage transformation: deepening specialization within firms; mobilizing best-in-class capabilities across enterprises; and, ultimately, accelerating learning across broad networks of enterprises.

Hagel and Seely Brown discuss the strategic levers that will accelerate this migration, and they outline a new approach to strategy development that will help companies capture this shifting source of strategic advantage.

Calling for a forceful reinvention of business strategy and the very nature of the firm itself, this bold and forward-looking book reveals what every company must do today to become tomorrow’s market leader.

Here is an excerpt from the book: “When customers demand more and control more, a company cannot rely solely on its own capabilities, no matter how distinct. Similarly, a company will struggle to mobilize outside resources unless it can offer exceptional capabilities in return. After all, the best enterprises receive so many proposals to collaborate that they will likely form partnerships only with whoever provides truly compelling, unique value. And so the real strategic power comes when a company integrates and extends these two schools of thought, amplifying the value of its distinctive internal capabilities by creatively and aggressively harnessing complementary capabilities from other companies.”

Hagel and Brown add in an interview with HBS Working Knowledge:

Q: Can you tell us what that sustainable edge is?

A: We make the case that getting better faster by working with others is the only sustainable edge. Structural advantages are eroding rapidly. Distinctive capabilities provide temporary advantage, but unless they are aggressively refreshed through rapid incremental innovation, they will be rapidly overtaken by other, more aggressive competitors. Relative capability is no longer the key strategic metric; it is the relative pace of capability building.

We also take to heart [Sun Microsystems co-founder] Bill Joy's observation that "there are always more smart people outside your company than within it." So, if you are serious about accelerating capability building, you will need to focus on the edge of your enterprise and learn how to work more effectively with business partners in ways that help you to get better faster.

Q: Li & Fung, headquartered in Hong Kong and with a network of 7,500 business partners, is clearly an example of a company you admire. What about its strategic focus do you see as cutting edge?

A: Li & Fung is one of the most innovative companies in leveraging the capabilities of specialized business partners on a global scale to add more value to its customers. It has organized a highly flexible global process network that orchestrates activities on a truly end-to-end basis, from the sourcing of fibers to the delivery of finished apparel to retail distribution centers around the world, to create customized supply chains for each item of apparel. These relationships are loosely coupled, so that partners can be quickly brought in and out of specific apparel manufacturing assignments.

At the same time, Li & Fung has invested considerable effort to build shared meaning and trust among its partners, based in part on the potential for rapid capability building, so that it can more effectively collaborate with its partners.

John Hagel also has a blog that is a great read.

Tomorrow: Big Bang

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TECH TALK: Good Books: Big Bang

The last two book recommendations in this series are quite different. The first is the story of how our universe came to be. Simon Singh’s “Big Bang: The Origin of the Universe.” Here is what the Publishers Weekly has to say (in a review on Amazon’s site):

It was cosmologist Fred Hoyle who coined the term "big bang" to describe the notion that the universe exploded out of nothing to kick-start space and time. Ironically, Hoyle himself espoused the steady state theory, positing that the universe is eternal and never really changes. Former BBC producer and science writer Singh (Fermat's Enigma) recounts in his inimitable down-to-earth style how the big bang theory triumphed. Readers will find here one of the best explanations available of how Cepheid stars are used to estimate the distance of other galaxies. Singh highlights some of the lesser-known figures in the development of the big bang theory, like Henrietta Leavitt, a volunteer "computer" at the Harvard College Observatory who in 1912 discovered how Cepheid stars can be used to measure galactic distances. Singh shows how the creation of the heavier elements was a major stumbling block to widespread adoption of the big bang until Hoyle (once again boosting the theory that he so fervently opposed) proved that they were created in stars' nuclear furnaces and strewn throughout the universe via supernova explosions. Readers who don't need a review of the early development of cosmology may wish that Singh had adopted a somewhat less leisurely pace. But his introductory chapters hold a lot of worthwhile material, clearly presented for the science buff and lay reader. There's no better account of the big bang theory than this.

On his personal website, Simon Singh writes: “I decided to write a book about the Big Bang theory of the universe because it is one of the pinnacles of human achievement. I wanted people to understand the theory and to appreciate why cosmologists are confident that it is an accurate description of the origin and history of the universe. The book is essentially the story of the Big Bang theory. Like any good tale, the discovery and proof of the Big Bang theory has more than its fair share of curious incidents and peculiar characters…. The stage was set for a major battle between the two camps – Bang Bang versus Steady State. It would take the rest of the twentieth century to resolve the conflict, with both sides desperately searching for evidence to shore up their own theory and crush the opposition. The battle for cosmic truth would involve politics, religion, bitter disputes, nuclear physics, satellites, telescopes, a supposed echo from the Big Bang, and remarkable serendipity, resulting in one of the greatest adventures in the history of science.”

Many of us are broadly aware of the Big Bang. Simon Singh takes us into a fascinating journey through the theory and the people who put it to together. ReviewsOfBooks quotes Scientific American: “Singh spins out the drama with verve and wit. We meet scientists who are shy and retiring and others with a flair for contention, epic discoveries made serendipitously and beautiful theories shot down by intractable facts, a pooch named Kepler and a persistent pigeon that made its home in the Bell Labs telescope. This is a perfect book for anyone who wants to know what science is all about."

Tomorrow: Raising Alex

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TECH TALK: Good Books: Raising Alex

The last book I want to discuss in this series was one given to me by Dr. Aniruddha Malpani. It is “Raising Alex: Teaching a Child to Make Smart Choices” by Steve Reilly. It is a slim book (100-odd pages) but the messages runs deep. As one who became a father recently, I found it a fascinating read – with also the hope that I can use the advice in raising Abhishek.

Reilly writes the book as a parent raising his daughter Alexis. As he mentions in the book, he is not a trained child psychologist – he is just Alex’s dad. His learnings come from his own mistakes. As he puts it: “I have taken the time, however, to think long and hard about the this topic, because I care more about being a father to Alex than anything else I do.”

The book is peppered with incidents most parents will be relate to. Reilly’s handling of these situations is very instructive. Here is one where Reilly and Alex are outside a video arcade (not for the first time).

Again I gave Alex five dollars and reminded her we would leave when she'd used up her money. She ran into the arcade. I watched her from a distance. She was walking around with her bulging pocketful of quarters trying to decide which games to play. (She was trying to determine which game would give her the most tickets - she loved getting those tickets.) The closer she got to using up her quarters, the more intensely she looked around at the games. She was trying to decide. Finally she was down to her last two quarters.

"Which one do you think I should play, Dad?" she asked in frustration.
"I don't know, Alex. Which game is the most fun and gives you the most tickets?"

She finally decided on Skiball and won a few tickets. Turning to me she pleaded, "One more dollar? Dad, can I have one more dollar? I promise I won't ask for any more." "No, Alex. Like I said, when you're done, you're done. Let's go for our walk now ... "

Children need adults to tell them "No." I believe they often want us to say it as well. When Alex stood outside the arcade pestering me for quarters, tears streaking her face, I think on some level she appreciated my not giving in to her. Those tears might have given Alex more control over her dad, but not over her life.

I admit it was difficult saying no to her and it was tough to watch her struggle with the choices she was trying to make. But that is the dilemma we all face as parents. I love Alex so much it is painful to watch her struggle with her choices. But I would rather help Alex grapple with the choices she makes while she is still young. After all, how many years can we "control" our children? I expect I'll have Alex's attention until she is, oh, perhaps twelve years old. After that (maybe even earlier), other influences - her peer group, television, and (God forbid) boyfriends - will begin to outweigh mine. So I figure I had better teach Alex to make good decisions before she turns twelve. Attempting it later on would only frustrate us both.

Reilly’s discussion in the book focuses around three themes: boundaries, encouragement and consequences. [In fact, as I read the book, I couldn’t help thinking that much of what Reilly says also applies in the workplace when we have to manage people.]

Reilly’s advice is very practical and easy to understand. As he puts it: “As parents we want our kids to grow up safe; and yet, we want them to feel loved. But more than that, our children need to develop judgment – their own judgment – so they can take care of themselves when we aren’t around. We need to teach our children to get along without us.”

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TECH TALK: Good Books: The Daily Drucker

Summer is a time of intense heat across much of India. In places like Mumbai, the humidity makes it even more unbearable – outside the comforts of one’s home or office. With kids having vacations and airlines offering great deals for travelling outside India (round-trip fares from Mumbai to Singapore are available for as little as Rs 10,000), summers are good times for taking off. If, like me, you cannot do that, then we have the next best alternative: read a few good books! They will take the mind away from the heat outside and provide some interesting food for thought.

My first recommendation is “The Daily Drucker.” As the sub-title says, it is “366 days of insight and motivation for getting the right things done.” Drucker is one of those few people (Warren Buffett and Charlie Munger are others) whose every word is filled with deep meaning and requires careful consideration. Through his life, Drucker has authored over 35 books. This book compiles the best of Drucker’s writings in easy-to-absorb capsules. Each thought is punctuated with an action point.

Consider for example the entry for April 18. It is entitled: “Decision Steps for Picking People.” Drucker says that the most important thing is that the person and the assignment fit each other. He writes:

General George C. Marshall followed Five Simple Decision Steps in making people decisions. First, Marshall carefully thought about the assignment. Job descriptions may last a long time, but job assignments change all the time. Second, Marshall always looked at several qualified people. Formal qualifications, such as those listed in a resume, are no more than a starting point. Their absence disqualifies a candidate. However, the most important thing is that the person and assignment fit each other. To find the best fit, you need to consider at least three to five candidates. Third, Marshall studied the performance records of all three to five candidates to find what each did well. He looked at the candidate’s strengths. The things a person cannot do are of little importance; instead, you must concentrate on the things they can do and determine whether they are the right strengths for this particular assignment. Performance can only be built on strengths. Fourth, Marshall discussed the candidates with others who worked with them. The best information often comes through informal discussions with a candidate’s former bosses and colleagues. And fifth, once the decision was made, Marshall made sure the appointee understood the assignment. Perhaps the best way to do this is to ask the new person to carefully think over what they have to do to be a success, and then, ninety days into the job, have the person to commit it to writing.

Drucker’s suggested action point for the day: Follow these five decision steps when hiring someone. Understand the job, consider three to five people, study candidates performance records to find their strengths, talk to the candidates’ colleagues about them, and once hired, explain the assignment to the new employees.

Tomorrow: The Daily Drucker (continued)

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TECH TALK: Good Books: The Daily Drucker (Part 2)

An additional benefit of “The Daily Drucker" is the foreword by Jim Collins, author of “Built to Last” and “Good to Great.” This excerpt is via 800-CEO-Read:

Drucker’s primary contribution is not a single idea, but rather an entire body of work that has one gigantic advantage: nearly all of it is essentially right. Drucker has an uncanny ability to develop insights about the workings of the social world, and to later be proved right by history. His first book, The End of Economic Man, published in 1939, sought to explain the origins of totalitarianism; after the fall of France in 1940, Winston Churchill made it a required part of the book kit issued to every graduate of the British Officer’s Candidate School. His 1946 book The Concept of the Corporation analyzed the technocratic corporation, based upon an in-depth look at General Motors. It so rattled senior management in its accurate foreshadowing of future challenges to the corporate state that it was essentially banned at GM during the Sloan era. Drucker’s 1964 book was so far ahead of its time in laying out the principles of corporate strategy that his publisher convinced him to abandon the title Business Strategies in favor of Managing for Results, because the term “strategy” was utterly foreign to the language of business.

There are two ways to change the world: with the pen (the use of ideas) and with the sword (the use of power). Drucker chooses the pen, and has rewired the brains of thousands who carry the sword.

Drucker’s genius shines best in the short paragraph or single sentence that cuts through the clutter and messiness of a complex world and exposes a truth. Like a Zen poet, Drucker packs universal truth into just a few words; we can return to his teachings repeatedly, each time with a deeper level of understanding. This wonderful collection presents these pearls of insight in one place, where you can reflect upon them one at a time, without having to read all 10,000 pages.

Buying a book is easy – spend a few hundred rupees and you have it. Reading it is harder – it requires a commitment of time. That is why many books are bought but few are actually read. Drucker’s book goes one step beyond that: it is one which makes you stop and ponder. It forces you to introspect and wonder about the way you’ve been doing things – and suggests changes. This is a book which needs deep introspection on how our management styles need to improve – these books are amongst the hardest to read, because they make us look inward. “The Daily Drucker” is a must read for each of us – it needs to become a daily habit in our lives for reading and action.

Tomorrow: Welch on Winning

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TECH TALK: Good Books: Welch on Winning

Continuing with our management theme, there is another book from a practitioner: “Winning” by Jack Welch, with Suzy Welch as co-author. Newsweek did a cover story on the book and Welch recently, and carried an excerpt:

LEADERS RELENTLESSLY UPGRADE THEIR TEAM, USING EVERY ENCOUNTER AS AN OPPORTUNITY TO EVALUATE, COACH AND BUILD SELF-CONFIDENCE.

The team with the best players usually does win. And that is why, very simply, you need to invest the vast majority of your time and energy as a leader in three activities.

You have to evaluate—making sure the right people are in the right jobs, supporting and advancing those who are, and moving out those who are not.
You have to coach—guiding, critiquing and helping people to improve their performance in every way.

And finally, you have to build self-confidence—pouring out encouragement, caring and recognition. Self-confidence energizes, and it gives your people the courage to stretch, take risks and achieve beyond their dreams. It is the fuel of winning teams.

Too often, managers think that people development occurs once a year in performance reviews. That's not even close. It should be a daily event, integrated into every aspect of your regular goings-on. Customer visits are a chance to evaluate your sales force. Plant tours are an opportunity to meet promising new line managers. A coffee break at a meeting is an opening to coach a team member about to give his first major presentation. Think of yourself as a gardener, with a watering can in one hand and a can of fertilizer in the other. Occasionally you have to pull some weeds, but most of the time, you just nurture and tend. Then watch everything bloom.

This is what Jack Welch has to say on hiring people:

Before you even think about assessing people for a job, they have to pass through three screens. The first test is for integrity. People with integrity tell the truth, and they keep their word. The second test is for intelligence. The candidate has a strong dose of intellectual curiosity, with a breadth of knowledge to work with or lead other smart people in today's complex world. The third ticket to the game is maturity—the ability to handle stress and setbacks, and enjoy success with equal parts of joy and humility.”

I then apply the "4-E (And 1-P) Framework'' for hiring that I've found consistently effective, year after year, across businesses and borders. The first E is positive energy. It means the ability to go go go—to thrive on action and relish change. The second E is the ability to energize others, and inspire them to take on the impossible. The third is edge, the courage to make tough yes-or-no decisions. The fourth E is execute—the ability to get the job done. Then I look for that final P, passion—a heartfelt, deep and authentic excitement about work.

Tomorrow: Welch on Winning (continued)

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TECH TALK: Good Books: Welch on Winning (Part 2)

Jack Covert recommended Jack Welch’s book “Winning” on 800-CEO-Read:

This book is not an autobiography, it is a primer for all people on all levels in business on how to succeed. As he states: "This book offers a road map. It is not, incidentally, a road map for senior level managers and CEO's. If this book helps them, terrific. I hope it does. But this book is also very much for people on the front lines: business owners, middle managers, people running factories, line workers, college graduates looking for their first jobs, MBAs considering new careers, and entrepreneurs."

The book is divided into five sections:

Underneath It All – this revolves around mission and values, candor, differentiation, voice and dignity.
Your Company - The first topic covered in this section is Leadership. The most valuable chapter in my opinion, it has leadership rules interspersed throughout the chapter. They alone make this chapter worthwhile. Other topics include hiring, people management, and change.
Your Competition - strategy, budgeting etc.
Your Career - the right job, getting promoted, etc.
Tying Up Loose Ends – speaks for itself.

As is very clear from the five sections, everything internal and external in the business environment is covered. In utmost detail, and with frankness. This gives the book that feeling of reading something true and real. Which is rare. To give you a feel of the style of the book and Jack’s style consider what he says in the Leadership chapter:

"…a word on paradoxes. Leadership is full of them.
The granddaddy of them all is the question I often get “How can I manage quarterly results and still do what’s right for my business five years out?
My answer is, “Welcome to the job!”
Look, anyone can manage for the short term—just keep squeezing the lemon. And anyone can manage for the long—just keep dreaming. You were made leader because someone believed you could squeeze and dream at the same time. They saw in you a person with enough insight, experience, and rigor to balance the conflicting demands of short- and long-term results.
Performing balancing acts every day is leadership."

A final word from Jack Welch: “I am often asked if leaders are born or made. The answer, of course, is both. Some characteristics, like IQ and energy, seem to come with the package. On the other hand, you learn some leadership skills, like self-confidence, at your mother's knee, and at school, in academics and sports. And you learn others at work—trying something, getting it wrong and learning from it, or getting it right and gaining the self-confidence to do it again, only better.”

Tomorrow: What Great Managers Do

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TECH TALK: Good Books: What Great Managers Do

Rounding off the trio of recently published good books on management is “The One Thing You Need to Know : ... About Great Managing, Great Leading, and Sustained Individual Success” by Marcus Buckingham. This is Buckingham’s third book, after “First, Break All the Rules: What the World's Greatest Managers Do Differently” and “Now, Discover Your Strengths.”

The March 2005 issue of Harvard Business Review has an article by Buckingham based on the book. Buckingham writes: “Great leaders tap into the needs and fears we all share. Great managers, by contrast, perform their magic by discovering, developing, and celebrating what’s different about each person who works for them.” This is the central premise of the book.

Brand Autopsy has a few excerpts from the HBR article:

Great managers play chess, not checkers
Average managers play checkers, while great managers play chess. The difference? In checkers, all the pieces are uniform and move in the same way; they are interchangeable. You need to plan and coordinate their movements, certainly, but they all move at the same pace, on parallel paths. In chess, each type of piece moves in a different way, and you can’t play if you don’t know how each piece moves.

Great managers know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack.

Identifying a person’s strengths …
To identify a person’s strengths, first ask, “What was the best day at work you’ve had in the past three months?” Find out what the person was doing and why he enjoyed it so much.

Remember: A strength is not merely something you are good at. In fact, it might be something you aren’t good at yet. It might be just a predilection, something you find so intrinsically satisfying that you look forward to doing it again and again and getting better at it over time. This question will prompt your employee to start thinking about his interests and abilities from this perspective.

Great Managers find ways to amplify a person’s style
Great managers don’t try to change a person’s style. They never try to push a knight to move in the same way as a bishop.

They know that their employees will differ in how they think, how they build relationships, how altruistic they are, how patient they can be, how much of an expert they need to be, how prepared they need to feel, what drives them, what challenges them, and what their goals are. These differences of trait and talent are like blood types: They cut across the superficial variations of race, sex, and age and capture the essential uniqueness of each individual.

ManyWorlds adds: “To become a great manager, Buckingham says, you need to know three things about each of your person: their strengths, so that you can focus on those while helping them overcome their weaknesses; the triggers that activate those strengths – recognition being the primary recommendation; and how they learn – so you can tailor your management style to fit those who analyze, those who do, and those who watch.”

Next Week: Good Books (continued)

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TECH TALK: Good Books: What Great Managers Do (Part 2)

The central point in Marcus Buckingham’s new book “The One Thing You Need to Know : ... About Great Managing, Great Leading, and Sustained Individual Success” is that great managers understand the differences in the people they are managing and work on bringing the best out in each one of them. In an interview with ComputerWorld, he said:

The job of the leader is to rally people toward a better future. It's externally focused, optimistic, ego-driven. Leaders see the present, but the future is even more vivid to them. The key skill is to cut through individual differences and tap into those things all of us share: fear of the future and the need for clarity.
The role of the manager is very internally focused: to turn one person's talent into performance; to ask, "Who is the person? What is his or her unique style of learning? What unique trigger must I squeeze to get the best out of him?" The challenge is to find what's unique and capitalize on it. It's really different but hugely important in a company. It's a role that's been undervalued.

People think of managers as leaders in waiting, but these are two very different abilities. The manager's role is catalytic. A great manager speeds up the reaction between the talent of people and the goals of the company. When that role is not valued, reactions are slowed down. If you want to know the future of a company, look at the quality of the managers.

Many IT managers would love it if all programmers thought alike, but a great manager knows that's absolute bunkum. A great manager figures out who's the knight, the queen, the pawn. He coordinates all those very different abilities and contributions into the service of the overall plan. He builds a team out of individuals.

Great managers talk about strengths -not things you can do well, but things that strengthen you. They're appetites as much as abilities - things you're drawn toward. A weakness isn't something you're bad at; it's something that drains, bores or frustrates you. An IT manager ought to be able to find out, for example, that this person loves to pull together and stay till midnight to meet that deadline. That urgency, passion, camaraderie makes him feel alive. Others need to go step by step and see the timeline and stick to it very religiously - never get behind the eight ball.

In the IT world, where it's "Do it for me yesterday," it's pretty important to know which of your people love that pressure and which are drained by it. If crunch time weakens you, you can't learn to love it. You can do it once or twice and then you'll quit -- psychologically or physically.

Watch to see what people are drawn to. Managers more often focus on weaknesses, but great managers know that will get you incremental improvement. If you invest in strengths, you get exponential improvement -- a much better return on investment.

This is what Buckingham has to say about learning styles:

Analyzers crave information. They love preparation and role playing. They take a task apart, examine the pieces and put it back together. They want to absorb all there is to know about a subject before they begin. They hate mistakes. Don't expect them to wing it; give them the time and the tools to prepare.

Doers learn by trial and error. Preparation bores them. They want a quick overview of the desired outcomes and then they're good to go. Start them with a simple task and gradually increase the complexity until they've mastered their roles.

Watchers like to see the total performance so they can learn how each part relates to all the others. Formal education and preparation leave them cold. Let a watcher shadow a successful performer so he can see the big picture.

As Drucker said, “Leadership is the lifting of a man’s vision to higher sights.” Taken together, the three books by Drucker, Welch and Buckingham help us do just that.

Tomorrow: The Marketing Playbook

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TECH TALK: Good Books: The Marketing Playbook

The next two books we will discuss are about two dimensions of business – marketing and presentations. Let us begin with the book on marketing. “The Marketing Playbook” by John Zagula and Richard Tong, both of whom honed their skills selling Microsoft Windows and Office and are now venture capitalists at Ignition Partners. The book boils marketing down to five plays for capturing and keeping the lead in any market. It offers a vocabulary for marketing.

Jack Covert reviewed the book for 800-CEO-Blog:

There are two basic types of business books - descriptive and prescriptive. I gravitate toward the prescriptive. I like books that give 10 ways to solve a problem. Many business book readers are the same. They want a "how to" book to get them started. The Marketing Playbook by John Zagula and Richard Tong fits into this category perfectly.

While at Microsoft, the authors noticed patterns in the marketing plans the company was implementing. The main thing was there weren't many variations to the plans. In the book, they describe five "marketing plays" that will works for any situation. They have given them easy to remember names (Drag Race, Stealth, Best of Both, High-Low, and Platform). They describe in detail how to run each play, how to identify which play to run, and what play to run if the current one starts to fail.

Publisher’s Weekly wrote about the book (via Amazon):

This engaging primer contends that all marketing campaigns can be boiled down to five basic strategies, a typology distilled from the authors’ experience as marketing executives at Microsoft and as venture capitalists. The "plays," schematized with football diagrams, are: the "drag race," in which your product squares off against a single competitor in an attention-getting battle for market dominance; the "platform play" (Microsoft’s forté), in which your product becomes the essential infrastructure for an entire industry (á la Windows); the "stealth play," in which you go after markets ignored by larger competitors; the "best of both" play, in which your breakthrough product becomes all things to all men; and the "high-low" play, in which you pit both your deluxe high-end product line and your cheapo down-market line against a rival’s mediocre compromise offering.”

There is a companion blog which the authors have created which offers continuing insights on marketing. This is a book you will find yourself returning to often because it helps provide a framework for thinking about the marketplace and competition. Coming up with a winning strategy requires insights about the situation out there along with an understanding of a product’s strengths. “The Marketing Playbook” offers a language to discuss with others in the team on how one should attack the market. As such, it is a book which will quickly become a ready-reference for all in marketing and allied functions.

Tomorrow: The Marketing Playbook (continued)

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TECH TALK: Good Books: The Marketing Playbook (Part 2)

Here is an excerpt from “The Marketing Playbook” by John Zagula and Richard Tong:

It may seem hard to believe, but our experience with hundreds of businesses and their specific challenges has shown over and over that there is always one obvious basic strategy that’s right for the situation. Once selected, your play becomes a starting point; it’s your path, your line of attack. From it, the rest of your in-market action plan comes to life.

Remember that there are only five plays to pick from. Here they are:

Drag Race: In some circumstances, your best bet calls for singling out one competitor and putting the pedal to the metal racing against them to win the category. This can be quite exciting, so it’s a really tempting choice. But you better have what it takes to beat them over the finish line.

Platform: Success can be hell. Once you’ve secured a lead in your category, you have to hold on to it and make the most of it. Standing on your platform at the top of the category, you need to be on the lookout. You must gather allies and defenses. Sounds kind of boring. But it’s essential. Success begets envy and you never know from where a new challenger is likely to emerge.

Stealth: Just because you’re not strong enough yet to win the battle doesn’t mean you can’t win the war. In this play, you undermine the status quo in your market by whittling away at the incumbent’s weak points. And maybe even by making them look foolish. But remember, you still have to stay out of their way and survive. Big, dumb, slow competitors can still squish you.

Best-of-Both: Go ahead, have your cake and eat it, too. While in many cases the smart decision is to focus, requiring a trade-off at the high-end or low-end of the market, in the right circumstances you don’t have to. With this play, instead you gain dominance over the whole of the category by collapsing these two ends. If you appeal to the most important needs of each part of the market, you can win them all.

High-Low: Compromise is for weaklings. With this play, you try to close out the competition by splitting the category and owning both halves. It takes a lot of finesse, but when you need to keep a competitor from establishing a Best-of-Both foothold, you need to appeal to the distinct prejudices of both the elites and the common folk, the high end and the cheap. This is the hardest play to manage, but if it’s done right, you’ll achieve high volumes and high margins at the same time.

In choosing the right play, there are some important questions you will need to ask yourself. Different plays are best suited to different conditions. Different plays require different strengths. Do you have the right ones to pull off your choice? Some plays are riskier than others. How tough are your nerves? Depending on the play, succeeding can take a long time. Do you have the time, patience, and resources? After all that, how big is the goal you’re after? Is it achievable? Is it worth it?

John and Richard have written the book. It is for us to put it into action!

Tomorrow: Better Presentations

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TECH TALK: Good Books: Better Presentations

I make presentations quite often. Most of these presentations are filled with slide after slide of bullet points. So, it was with great interest that I read Cliff Atkinson’s blog when it first launched. The blog was a collection of fascinating insights in how to improve presentations using PowerPoint (or in my case, OpenOffice Impress). Atkinson has now written a book “Beyond Bullet Points: Using Microsoft PowerPoint to Create Presentations That Inform, Motivate, and Inspire.”

Here is one of Atkinson’s blog posts entitled “Center of Gravity”:

Whenever I look at a PowerPoint presentation for the first time, I go to Slide Sorter view to get the lay of the land: Can I see a clear story across the entire experience? Then I'll shift to Notes Page view: Are the projected visuals and spoken words planned together? And last I'll go to Normal view: Can I easily understand the main idea of this slide?

It's usually the case that the answer is No to all three questions. More often than not, the presentations are very difficult to understand, packed with more text and data than anyone's cognitive ability can process; and little if any narrative structure.

What I commonly find is that any single presentation is actually multiple presentations that are yearning to be liberated. Where we might try to load up the slides to save time by creating a one-size-fits-all presentation, we actually end up with a situation where one-size-confuses-all.

One solution to the problem is the discipline of completing Act I of your story template..When you write the statements that form the headlines of the first five slides, you are making purposeful decisions that will sort, distill and structure information in a way that makes sense to your specific audience.

Franz Dill of IFTF Future Now writes: “Atkinson's approach is very nicely tailored for important, complex presentations. His model is that of telling a story ... storyboard it, use minimal text (no bullets), engage the audience. He picks a board presentation scenario and goes through it in some detail. Very thoughtfully done. I also like the fact that he covers other parts of the process ... how you present the slides, pacing, and how to tailor it for later emailing to people that could not attend, now a very common situation. I have been saving presentations for reference for some time, and am often amazed at how incomprehensible a slideshow can become. In fact the latter situation has often made me use more text and slide detail than I would otherwise.”

Lars Bergstrom adds in a review on Amazon: “I believe that the book's greater contribution is pointing out that most people structure presentations as a dump of data rather than taking into account their audience and the goal of their presentation -- why are people there? What do you want them to do or believe after you're done presenting? Even if you disagree with Cliff's convincing points on removing bullets from your decks, you should take to heart his framework for developing concepts and decks.”

Tomorrow: Better Presentations (continued)

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TECH TALK: Good Books: Better Presentations (Part 2)

Dennis Kennedy writes about “Beyond Bullet Points” by Cliff Atkinson:

Beyond Bullet Points emphasizes some of the most important things I've learned while presenting over the years (take your audience from point A to point B, understand what your audience wants to learn, keep the focus on your message, not your slides, and the like), but it also sets out a disciplined system that makes it highly likely that you will achieve these goals.

And it gives you practical lessons and tools, including a heavy emphasis on the "rule of threes" to turn your presentations and your slides into a coherent whole that works for both you and your audience.

The organizing thread of the book is a real-world challenge – can you create a great PowerPoint presentation without using all the boring bullet points? Atkinson's efforts show that the answer is a resounding "YES!!!"

In fact, he shows you several ways to do so. For me, the most impressive is a set of slides that have two words on each slide. Astonishing!

In the course of the book, however, he also demonstrates that telling a story, especially telling the story that makes sense for your audience, is the necessary foundation. Technique helps you tell a great story, but technique won't save a poor story.

The key lesson, then, is to look beyond the great techniques and work on your story.

Cliff Atkinson said in an interview with Management Consulting News:

When we start talking about text on a slide, it’s important to begin by affirming the research: presenting text that is identical to narration actually harms the ability of the audience to understand. Removing the text from the screen improves the ability of the audience to retain the information by 28%, and improves their ability to apply the information by 79%.

Keeping in mind the imperative to minimize text on the screen, the bulk of writing text for a PowerPoint presentation should be in the headlines that form your story structure. Then you write the narrative explanation of each of those headlines in Notes Page view.

Because the words have already been captured in the form of the headlines and notes, the screen is much less dependent on text to convey information and more dependent on you to communicate it with your spoken words and expressions. With this approach, the PowerPoint screen becomes a much more creative and interesting tool that can hold a few words, or no words at all.

Dave Pollard has an excellent analysis of the process:

What this book does is provide a process to supply the pictures to go along with the story, so your presentation becomes "a blend of movie and live performance".

The process has three steps: Writing a script to focus your ideas, storyboarding the script to clarify the ideas, and producing the script to engage the audience. My previous posts have told you about the art of crafting a good story. The storyboard for a movie script is actually sketches of visuals, but for purposes of this book it's merely parsing of the critical parts of the story onto successive slides. Then you use graphics -- and few words -- to reinforce the key points of the story with memorable images.

So, get a copy of Atkinson’s book and start using his ideas for your future presentations!

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TECH TALK: Good Books: Investing: The Last Liberal Art

Robert Hagstrom’s book “Investing: The Last Liberal Art” talks about the need for a latticework of mental models. It is inspired by Charlie Munger’s thinking that one needs to have a framework of the best ideas across multiple disciplines. This may seem contrarian to what we are always told – the need to specialise. While the title of the book may imply an emphasis on investing, that is not necessarily the case. The book is a great tutorial in thinking through challenges we face from multiple different angles. As Hagstrom suggests: “Innovative thinking most often occurs when two or more mental models act in combination.”

From the book description: “Investing: The Last Liberal Art offers a unique picture of investing within the larger world. It explains how investment management works by borrowing the big ideas from other complex disciplines: biology, economics, mathematics, philosophy, physics, and psychology. In the biology chapter, Hagstrom analyzes the central nervous system and the immune system as complex adaptive systems and then draws parallels with the behavior of the economy and the stock market. In the physics chapter, he explores a mathematical distribution and considers the advantages of scale in relation to the ‘bigger is better’ models that define the business strategies of Wal-Mart, McDonald's, and Home Depot. This interdisciplinary approach or model describes in which mechanisms the markets work and how to select and hold stocks.”

Chetan Parikh, who first recommended the book to me, writes in his review:

This book is certainly the best book that I have read for a long time. It is a book on how to connect and unify many disciplines - physics, biology, social sciences, psychology, philosophy and literature - to investing and the markets. It also contains some serious advice on how to read a book - a boon to avid bookworms like me.

Ideas just bubble from every page - the author warns in the preface: "Reading this book requires, then, both an intellectual curiosity and a significant measure of patience." - I went through the book in just two sittings, impatient as I was for more. In a way, this book crystallises the thoughts of Charlie Munger, Vice-Chairman of Berkshire Hathaway, who believes in a liberal arts understanding of investing and feels that building a latticework of mental models could greatly help people to improve their investment returns. Bill Miller, the investing superstar of Legg Mason, actually practices this by gaining insights from various disciplines to aid his investment thinking.

To be an intellectual Christopher Columbus, an investor should acquire models or concepts from various branches of knowledge and then attempt to recognise patterns of similarity in them. Investment decisions have a higher probability of success when ideas from other disciplines also lead to the same conclusion. As Charlie Munger has stated - "You've got to have models in your head and you've got to array your experience - both vicarious and direct - on this latticework of models." As Benjamin Franklin said it is forming "habits of mind" that seek to link together different disciplines. Intelligence is really a factor of how many connections or links one has learned. As Munger also stated: "You can reach out and grasp the model that better solves the overall problem. All you have to do is know it and develop the right mental habits. Worldly wisdom is mostly very, very simple. There are a relatively small number of disciplines and a relatively small number of truly big ideas. And it's a lot of fun to figure it out. Even better, the fun never stops. Furthermore, there's a lot of money in it, as I can testify from my own personal experience. What I'm urging on you is not that hard to do. And the rewards are awesome…..It'll help you in business. It'll help you in law. It'll help you in life. And it'll help you in love…..It makes you better able to serve others, it makes you better able to serve yourself, and it makes life more fun."

Robert Hagstrom writes in his book: “Latticework is itself a metaphor…It is a but a very small stretch to envision a metaphorical lattice as the support structure for organizing a set of mental concepts…One thing we understand about the human mind is the variability with which it receives and processes information. Any educator knows that the best way to teach a new idea to one student will have no effect whatsoever with another; the best educators, therefore carry with them a virtual key ring with many different keys for unlocking individual minds.”

Tomorrow: Investing: The Last Liberal Art (continued)

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TECH TALK: Good Books: Investing: The Last Liberal Art (Part 2)

Perhaps the best section in Robert Hagstrom’s book “Investing: The Last Liberal Art” is the one on Literature. Hagstrom takes us on a visit to St. Johns College in Annapolis, Maryland. The college is known for its Great Books Program. Hagstrom elaborates:

The entire curriculum is devoted to reading and discussing the great books of Western civilization; there are no separate disciplines or departments, and no electives. Over the four years, the students will read classic works in literature, philosophy, theology, psychology, science, government, economics, and history, and discuss them intensively in seminars of eighteen or twenty students. In smaller classes, they also study music, the visual arts, languages (Greek in the freshman and sophomore years, French in the final two years), mathematics, and laboratory science.

The curriculum design follows an approximate chronological sequence. In the freshman year, students focus their attention exclusively on the great thinkers of ancient Greece. The second year covers the Roman, medieval, and Renaissance periods, and also includes classical music and poetry. In the third year, students read major works of seventeenth- and eighteenth-century thinkers. Seniors move on to the nineteenth and twentieth centuries.

One of the regrets that I have in life that the education system in most Indian schools and colleges (especially in the sciences discipline) de-emphasises the liberal arts. It is only later in life that one realises the need for a broader set of ideas and mental models. For many of us, it is probably too late then. Reading Hagstrom’s book, I wished I would go and spend four years at St. Johns! Perhaps, we can create such a college in India…?

The Literature section of Hagstrom’s book also has a section on how to read a book, based on ideas outlined in Mortimer Adler’s “How to Read a Book”, published first in 1940. Writes Hagstrom:

The central purpose for reading a book, Adler believes, is to gain understanding. That is not the same as reading for information…Clearly, information is a prerequisite for enlightenment, but the trick, says Adler, is not to stop at just being informed.

Reading that makes you stop and think is the path to greater understanding – not solely because of what you are reading but because of the process of reflection in which you are engaged. You are learning from your own thinking as well as from the author’s ideas. You are making new connections. Adler describes this as the difference between learning by instruction and learning by discovery…Achieving real understanding requires you to work, to think.

Hagstrom is a great teacher. The book is like going back to school and learning the same principles that we once learnt only to excel in exams. Only this time, we are doing so for enriching our lives.

Tomorrow: The Toyota Way

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TECH TALK: Good Books: The Toyota Way

A lot has been written about the Japanese automobile industry, especially about Tokyo. Most of the previous work has tended to focus on a few aspects of the industry like just-in-time manufacturing, lean production and kaizen. A new book by Jeffrey Liker goes beyond everything else. “The Toyota Way” details 14 management principles used by the “world’s greatest manufacturer.” Liker is well-qualified. As Director of the Japan Technology Management Program, he has observed Toyota closely for than a decade. The book takes a wholistic approach to Toyota’s approach to manufacturing, something which the American auto companies are trying to replicate.

Before we get to the book, here is some background on the company from Business Week, which recently named Kiichiro And Eiji Toyoda among its Great Innovators:

One was the zealous mentor, the scion of a prominent clan with a vision that stretched far beyond the family business. The other was the younger cousin, a protégé who knew how to make that frustrated vision come alive. Both thought they had the makings of a great company. But on that day in 1938 when Kiichiro Toyoda, the founder of Toyota Motor Corp., instructed his understudy, Eiji, to build a factory on land cleared from a red-pine forest in central Japan, neither realized they were about to make history. That plant, located in what is now called Toyota City, pioneered concepts such as just-in-time inventory control, kaizen continuous improvement, and kanban parts labeling -- all disciplines common today in factories from Detroit to Stuttgart, and essential to the Toyota Way.

By the late 1930s, Kiichiro had launched his own company -- the name was changed to Toyota, which is written with eight brush strokes, an auspicious number in Japan -- and found a soulmate in Eiji, who had followed in his footsteps at Tokyo University. By 1935 the pair had developed a prototype called the A1, a Chrysler DeSoto Airflow knock-off. To hold down inventory, Kiichiro shortened the supply chain so parts were delivered just in time for assembly. But passenger-car production didn't get off the ground until 1947 and success came too late for Kiichiro: He was forced out after a strike in 1950 and died two years later.

That was hardly the end of the story: Eiji became a managing director and was sent to the U.S. to study Ford Motor Co.'s River Rouge plant. He came back impressed by Ford's scale but scornful of the inefficiencies. So he and a veteran loom machinist, Taiichi Ohno, fine-tuned Toyota's own operations. Eiji and Ohno came up with the kanban system of labeling, an early precurser to bar codes, to keep the flow of parts smooth. They also perfected the art of kaizen, constantly adjusting the manufacturing process to achieve savings and quality improvements.

Eiji's first export effort to the U.S. fizzled when the Toyota Crown proved too slow for American highways. Eiji pressed on, exporting the compact Corolla in 1968, a year after becoming president. Detroit laughed. But the Corollas proved popular with baby boomers looking for cheap, reliable vehicles. Hooked on solid quality and high resale values, the boomers stayed loyal, trading up to the Camry and Lexus -- another brainchild of Eiji, who stepped down from Toyota's board in 1994 at the age of 81. By then, Detroit execs were making pilgrimages -- to Toyota City.

As India seeks to build its manufacturing expertise, there is a lot to learn from Toyota.

Tomorrow: The Toyota Way (continued)

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TECH TALK: Good Books: The Toyota Way (Part 2)

In November 2003, Business Week had a cover story with the question: “Can Anything Stop Toyota?”

Toyota combines the size, financial clout, and manufacturing excellence needed to dominate the global car industry in a way no company ever has. Sure, Toyota, with $146 billion in sales, may not be tops in every category. GM is bigger -- for now. Nissan Motor Co. makes slightly more profit per vehicle in North America, and its U.S. plants are more efficient. Both Nissan and Honda have flexible assembly lines, too. But no car company is as strong as Toyota in so many areas.

In the past few years, Toyota has accelerated these gains, raising the bar for the entire industry. Consider:

-- Toyota is closing in on Chrysler to become the third-biggest carmaker in the U.S. Its U.S. share, rising steadily, is now above 11%.

-- At its current rate of expansion, Toyota could pass Ford Motor Co. in mid-decade as the world's No. 2 auto maker. The No. 1 spot -- still occupied by General Motors Corp., with 15% of the global market -- would be the next target. President Cho's goal is 15% of global sales by 2010, up from 10% today. "They dominate wherever they go," says Nobuhiko Kawamoto, former president of Honda Motor Co. "They try to take over everything."

-- Toyota has broken the Japanese curse of running companies simply for sales gains, not profit. Its operating margin of 8%-plus (vs. 2% in 1993) now dwarfs those of Detroit's Big Three. Even with the impact of the strong yen, estimated 2003 profits of $7.2 billion will be double 1999's level. On Nov. 5, the company reported profits of $4.8 billion on sales of $75 billion for the six months ended Sept. 30. Results like that have given Toyota a market capitalization of $110 billion -- more than that of GM, Ford, and DaimlerChrysler combined.

-- The company has not only rounded out its product line in the U.S., with sport-utility vehicles, trucks, and a hit minivan, but it also has seized the psychological advantage in the market with the Prius, an eco-friendly gasoline-electric car. "This is going to be a real paradigm shift for the industry," says board member and top engineer Hiroyuki Watanabe. In October, when the second-generation Prius reached U.S. showrooms, dealers got 10,000 orders before the car was even available.

-- Toyota has launched a joint program with its suppliers to radically cut the number of steps needed to make cars and car parts. In the past year alone, the company chopped $2.6 billion out of its $113 billion in manufacturing costs without any plant closures or layoffs. Toyota expects to cut an additional $2 billion out of its cost base this year.

-- Toyota is putting the finishing touches on a plan to create an integrated, flexible, global manufacturing system. In this new network, plants from Indonesia to Argentina will be designed both to customize cars for local markets and to shift production to quickly satisfy any surges in demand from markets worldwide. By tapping, say, its South African plant to meet a need in Europe, Toyota can save itself the $1 billion normally needed to build a new factory.

That’s Toyota. The foreword by Gary Convis, Managing Officer of Toyota and President, Toyota Motor Manufacturing, Kentucky, in the book captures the essence of the organisation: “The Toyota Way can be briefly summarized through the two pillars that support it: ‘Continuous Improvement’ and ‘Respect for People.’ Continuous improvement, often called kaizen, defines Toyota’s basic approach to doing business. Challenge everything. More important that the actual improvements that individuals contribute, the true value of continous improvement is in creating an atmosphere of continuous learning and an environment that not only accepts, but actually embraces change. Such an environment can only be created where there is respect for people – hence the second pillar of the Toyota Way.”

Tomorrow: The Toyota Way (continued)

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TECH TALK: Good Books: The Toyota Way (Part 3)

Jeffrey Liker’s book “The Toyota Way” goes deep into Toyota’s philosophy and operations. From the book description:

Fewer man-hours. Less inventory. The highest quality cars with the fewest defects of any competing manufacturer. In factories around the globe, Toyota consistently raises the bar for manufacturing, product development, and process excellence. The result is an amazing business success story: steadily taking market share from price-cutting competitors, earning far more profit than any other automaker, and winning the praise of business leaders worldwide.

The Toyota Way reveals the management principles behind Toyota's worldwide reputation for quality and reliability. Dr. Jeffrey Liker, a renowned authority on Toyota's Lean methods, explains how you can adopt these principles--known as the "Toyota Production System" or "Lean Production"--to improve the speed of your business processes, improve product and service quality, and cut costs, no matter what your industry.

Drawing on his extensive research on Toyota, Dr. Liker shares his insights into the foundational principles at work in the Toyota culture. He explains how the Toyota Production System evolved as a new paradigm of manufacturing excellence, transforming businesses across industries. You'll learn how Toyota fosters employee involvement at all levels, discover the difference between traditional process improvement and Toyota's Lean improvement, and learn why companies often think they are Lean--but aren't.

The Toyota Way, explains Toyota's unique approach to Lean--the 14 management principles and philosophy that drive Toyota's quality and efficiency-obsessed culture. You'll gain valuable insights that can be applied to any organization and any business process, whether in services or manufacturing. Professor Jeffrey Liker has been studying Toyota for twenty years, and was given unprecedented access to Toyota executives, employees and factories, both in Japan and the United States, for this landmark work. The book is full of examples of the 14 fundamental principles at work in the Toyota culture, and how these principles create a culture of continuous learning and improvement. You'll discover how the right combination of long-term philosophy, process, people, and problem solving can transform your organization into a Lean, learning enterprise--the Toyota Way.

The 14 Toyota Way Principles discussed by Liker are:

Base your management decisions on a long-term philosophy even at the expense of short-term financial goals.

Create continuous process flow to bring problems to the surface.

Use “pull” systems to avoid overproduction.

Level out the workload. (Work like the tortoise, not the hare.)

Build a culture of stopping to fix problems, to get quality right the first time.

Standardized tasks are the foundation for continuous improvement.

Use visual control so no problems are hidden.

Use only reliable, thoroughly tested technology that serves your people and processes.

Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.

Develop exceptional people and teams who follow your company’s philosophy.

Respect your extended network of partners and suppliers by challenging them and helping them improve.

Go and see for yourself to thoroughly understand the situation.

Make decisions slowly, by consensus, thoroughly considering all options ; implement decisions rapidly.

Become a learning organization through relentless reflection and continuous improvement.

Towards the end of the book, Liker also discusses how other organisations can apply the Toyota Way to become better. (If only it were that simple!) The book is a great read – full of ideas which can be applied. The Toyota Way evolved over many decades and is embedded deep within its culture. As we in India seek to build great organisations, we could do well to learn from, in Liker’s words, “the world’s greatest manufacturer.”

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TECH TALK: Good Books: The Art of Profitability

It is every entrepreneur’s dream to build a company like Wal-mart, Microsoft, Starbucks, eBay, Intel, Dell or Google. Business plans are strewn with references to these companies – every entrepreneur wants the business to become the “Microsoft of ….”. And yet few manage to do it.

Making a business profitable and then growing the profits is one of the greatest challenges of business. Losses and profits are both habit-forming. I have gone through both scenarios in my entrepreneurial career. Running up monthly losses can be quite depressing. It saps energy and morale, besides the obvious – cash. At times, it is much easier starting small, and making and keeping a business profitable than taking a loss-making business and turning it around. Once a business is profitable, the task then is to look at how to grow the bottomline and topline. It is like a game of chess – combining strategy with execution on the ground, and little margin for error against smart opponents (competitors).

Adrian Slywotzky’s “The Art of Profitability” is a concise, little book that focuses on how to grow profits. Adrian comes with 23 business models. Narrated in the form of a conversation between an extraordinary teacher (David Zhao) and a senior executive (Steve, from a company called Delmore), the book is an easy read but packs a lot of thought into its chapters. There is also reading material for each chapter. The author’s recommendation is to read one chapter a month, and then play with the ideas discussed.

From the book’s description: “What do Barbie dolls, Nokia phones, and American Express credit cards have in common? They all represent a powerful business model called pyramid profit. How about Intel, Microsoft, and Stephen King? They all exploit another model called value chain position profit. THE ART OF PROFITABILITY reveals the invisible but important governing principles that can mean the difference between business failure and success. Writing with wit and provocative insight, bestselling author Adrian Slywotzy tells the story of eccentric strategy teacher David Zhao and his young student. Each of the book's twenty-three chapters presents a lesson from the exuberant and always challenging master-and a profit paradigm that will open your mind to the many ways to make profit happen. You'll understand-from a different perspective-how your company and your competitors generate profit...which business models can be best applied to your profit-making strategy...what specific actions your organization can take in the next ninety days to improve its bottom line...and more. With scores of examples from today's global marketplace, a weekly assignment, and an eclectic business reading list ranging from Obvious Adams to Einstein's Dreams, THE ART OF PROFITABILITY invites anyone in business to engage in the lively exchange between mentor and protege. Enter the classroom. Discover the art. And learn which form of profitability will help your company succeed today and grow tomorrow.”

Losses or a lack of growth can enervate even the strongest of companies. Stagnation can cause a downward spiral from which it is hard to recover from. That is where one needs to look creatively at what we can do to build and grow profits at the companies where we work. This is where “The Art of Profitability” comes in. [You can read the prologue of the book here.]

Tomorrow: The Art of Profitability (continued)

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TECH TALK: Good Books: The Art of Profitability (Part 2)

What makes Adrian Slywotzky’s “The Art of Profitability” a good read is its conversational style, contemporary business examples and the simple graphics which illustrate each of the business models. What is a business model? Slywotzky says: “A business model is the answer to a few questions. What is my unique value proposition? Who are my customers? How do I make money? What is my strategic control and how do I protect it?”

The focus of the book is on addressing some key questions about profit models, each of which hinges on “fully understanding the customer”:

Which of these profit models are at work in my business? Can I identify others?

How does profit happen in my competitors’ businesses?

What can I do in the next ninety days to intensity my organization’s focus on profitability?

Which profit models would enable us to maximise profit this year?

Is my organization aligned to capitalize on the profit models in my business?

Slywotzky was interviewed by the CEO Fresher about the book. Here are some excerpts from the interview:

What exactly is a profit model?

Wherever there is profit, you can find the essential forces that cause it to happen in a particular situation. Ohno at Toyota always said, "Ask 'Why?'" five times. By the fifth time, you'll start getting close to the real answer." You have to treat profitability as a puzzle and find out how it can happen for your business. I've chosen 23 profit models for this book and used illustrations and stories to show readers how they work.

What's the biggest mistake that companies are making that is preventing them from making a profit?

Profitability has to be understood by each company on its own terms. They can't just copy a profit model that worked for another company. They have to choose the right model after carefully analyzing their business, their customers, and their competitors.

How can a company stay profitable if their competitors keep coming in with copies of its products at lower prices?

Several ways. Intel uses a "time profit" model. When they are first to market with a new product, profits happen in the first four or five quarters and then drop down very quickly to almost zero after that. To make a profit, Intel must work hard to maintain a two to three-year lead over its competitors. Diffusing the product as instantly as possible helps extend their period of profitability.

Why does a company like SMH, makers of Swatch, bother selling all those low-profit margin plastic watches when the majority of their profit comes from their luxury lines of watches? Isn't that keeping the company less profitable?

You're right that the plastic Swatches made by the parent company SMH have low profit margins, but actually they are just as important to SMH's profitability as the high-margin watches. By producing the plastic watches, SMH builds a firewall against competitors who may try to produce cheaper imitations. They won't be able to develop the economics to move up the pyramid. This is called a Pyramid Profit Model because the profit-generating watches are at the top of the pyramid and the defensive plastic watches at the bottom. It turns out that 70% to 80% of SMH's profit is from the top of the pyramid, but the base of the pyramid is just as important.

I can see how you can sell the same product to different levels of customers at different prices, but can you sell the same product to the same customer at different prices?

It happens all the time. Coca-Cola, for example, sells you a soda for 8 to 10 cents per ounce in a vending machine, 10 or more cents per ounce at a restaurant, but only 2 cents per ounce at a grocery store. All of us as customers behave differently in different situations; therefore, to maintain profitability, prices should reflect different price sensitivities in different environments.

In an interview with the Wharton Journal, Slywotzky said: “Someone recently told me that if you want to understand leadership and you are in an organization, don't look up. Look in the mirror. And so, I think the first step is to understand that anybody with the right ideas can play a leadership role. I think the second thing is to have the right content and the right agenda. And I think a fantastic way to begin is to start asking the series of questions that are posed in The Art of Profitability. 1. How does profit happen? 2. How do we get everybody in our organization to understand it and act on it? 3. What's our next profit model? No profit model is forever. And no. 4 is the greatest achievement – doesn't happen very often but it is phenomenally valuable. It is to ask the question, can we create a unique way of being profitable? Dell has done it. Starbucks has done it. Toyota has done it. It is most important to understand how profit happens and get everybody aligned behind it. But it is exceptionally valuable to ask the question – can we develop a unique profit model in our industry, so that we can compete differently from the others. And the rewards of that are just phenomenally high.”

So, read the book and operationalise the ideas embedded in there!

Tomorrow: The Business of Software

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TECH TALK: Good Books: The Business of Software

Microsoft Secrets. Competing on Internet Time. Platform Leadership. Japan’s Software Factories. These are some of the books authored by Michael Cusumano. So how could one can buy and read his latest book, “The Business of Software,” subtitled: “What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad.”

For many (including me), software is our core business. It is the basis on which we are building our dreams of tomorrow. Cusumano’s detailed book provides excellent insights into the world and business of software. From the book’s description:

The world's leading expert on the global software industry and coauthor of the bestseller Microsoft Secrets reveals the inner workings of software giants like IBM, Microsoft, and Netscape and shows what it takes to create, develop, and manage a successful company -- in good times and bad -- in the most fiercely competitive business in the world.

In the $600 billion software industry it is the business, not the technology, that determines success or failure. This fact -- one that thousands of once glamorous start-ups have unhappily discovered for themselves -- is the well-documented conclusion of this enormously readable and revealing new book by Michael Cusumano, based on nearly twenty years of research and consulting with software producers around the world.

At the heart of the book Cusumano poses seven questions that underpin a three-pronged management framework. He argues that companies must adopt one of three basic business models: become a products company at one end of the strategic spectrum, a services company at the other end, or a hybrid solutions company in between. The author describes the characteristics of the different models, evaluates their strengths and weaknesses, and shows how each is more or less appropriate for different stages in the evolution of a business as well as in good versus bad economic times. Readers will also find invaluable Cusumano's treatment of software development issues ranging from architecture and teams to project management and testing, as well as two chapters devoted to what it takes to create a successful software start-up. Highlights include eight fundamental guidelines for evaluating potential software winners and Cusumano's probing analysis, based on firsthand knowledge, of ten start-ups that have met with varying degrees of success.

ADTMag wrote about the book and Cusumano:

To succeed long-term in the software business it is most important to have structure with flexibility. That is because the potential for change in this field is still so great.

For vendors, who, admittedly, are not universally loved by users, whole years of revenue gains were washed out. What is going on now? Said Cusumano: “I think a lot of the enterprise technologies have become commodity-like. There are lots of players in the same spaces. They’re competing for functionality, and prices.

“You have low-cost Indian competitors. And you have some packaged solutions. You have some other stuff that’s more difficult too, but the availability of low-cost packages –- from SalesForce.com, or almost anything from Microsoft -- and low-cost services from offshore are just pushing price points down, and that’s what companies are struggling with.”

“It is like the revolution we had in the transition from mainframes to PCs,” he said.

At the time of client/server computing, the hardware “just became so much cheaper that there was this pushback from customers on spending tens of millions of dollars on the software and services side.”

“I think we are now in another pushback phase,” Cusumano said, “where customers don’t want to spend millions of dollars on software to run on machines that cost a few thousand dollars. They don’t want to pay 20 or 25 percent of the initial license fee in perpetuity for upgrades. They want to pay a lower percentage. We are in the midst of a consolidation.”

In The Business of Software, Cusumano describes the varied paths vendors follow. It is important for buyers and sellers alike to realize, he notes along the way, that software is not really one kind of business. “Software becomes whatever function or application it addresses,” he writes. Those are the qualities of a unique kind of business, one that often borders on an adventure, one Cusumano covers most vividly.

Here is an excerpt from the book.

Tomorrow: The Business of Software (continued)

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TECH TALK: Good Books: The Business of Software (Part 2)

CIO Insight reviewed the book “The Business of Software” by Michael Cusumano:

In what could have been called Technology Management 101, Cusumano argues that software companies—the focus here—can choose from three business models: They can be a products company (Microsoft); they can be a service company, providing consulting, systems integration and maintenance (Cap Gemini Ernst & Young); or they can be a hybrid, providing both products and services (IBM).

Nothing more basic than that, right? Then why do so many software companies get it wrong? One reason, Cusumano argues through case studies of companies ranging from AT&T to Toshiba, is that firms migrate, without sufficient thought, from one model to another in an attempt to capture more sales and earnings, all the while failing to staff up appropriately when their focus—or lack of it—changes. If you think this central thought is too basic, give yourself exactly 60 seconds and see how many failures you can name in the $600 billion software industry.

Cusumano's preference—like that of most people who help fund start-up software ventures—is the product approach: It's easier to manage and has the possibility of becoming much more profitable. He is quick to point out, however, that one business structure is not inherently better than another.

When it comes to business models, the issues are twofold. First, you need to know what kind of company you want to be so that you can allocate resources effectively. Product companies need to organize in teams that focus on producing the best offering for a clearly defined market. Software service companies need to create relationships with their customers. As Cusumano writes, software service companies should "build technologies that look like products, or can be packaged in some way, but generally they cater to the needs of their individual clients." Second, you need to realize that it is all well and good to change your customer mix over time (if that's where the profits are), but your business model needs to change as well.

At the end of the book, Cusumano looks ahead: “Firstly, we should always remember that bubbles are just that – bubbles. They expand and then burst. It follows that good times for technology-based companies must return. The question is when and at what level, not if…Second, history provides some guidelines for thinking about the future…Most new opportunities for software entrepreneurs comes with new hardware or computing platforms and niche applications, often for new platforms. This observation tells me to watch for new software opportunities at the forefront of hardware innovation and platform evolution…Finally, there is another chasm for software companies to cross. That chasm is the truly novice user – the 5 billion or so people in the world who do not own a computer.”

In these few sentences, Cusumano captures the next set of opportunities in the world of software: creating next-generation computing platforms for the world’s emerging markets. Can India be the home to the world’s next Microsoft? The book has plenty of ideas for entrepreneurs in what still remains the world’s most exciting and fascinating industry.

Tomorrow: Realtime

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TECH TALK: Good Books: Realtime

Michael Cusumano writes about this software company: “[It] is a good example of firm that combines horizontal and vertical market segmentation….[It] initially developed about a dozen back-office software packages designed to meet different “horizontal” enterprise functions….[It] is Europe’s largest software company and one of the top software companies in the world.” It is SAP.

Hasso Plattner was one the team of five that founded SAP in 1972. A story in Business Week (July 23, 2001) traced Plattner’s early days:

Born in 1944 in Berlin, Plattner's earliest memories are of sailing with his parents, Horst and Inge, on the lakes around the rubble-strewn city. His father, an eye surgeon, did not fight in the war. Still, there was a sense of peril. Plattner remembers seeing British jets landing with provisions during the 1948 airlift that broke Russia's Berlin blockade, and he saw one plane crash. Rather than becoming fearful, he grew up confident. "I'm a Berliner--fast, loud, obnoxious, industrious, brutally open," he brags.

The battler in him emerged during adolescence. After his parents divorced, he was sent at age 15 to a strict, military-style boarding school in Bavaria. It was like moving from Manhattan to Texas overnight. "I had to become a street fighter," he recalls during a recent dinner of beef-cheek ravioli at Babbo, a trendy New York restaurant. Despite jet lag and an overstuffed day of meetings, Plattner is full of energy. His eyes grow wide and he fingers scars on his wrist and hand as he tells how upperclassmen picked on him because he was a city slicker. "Once I pushed a big guy into a glass cabinet, and it shattered. I still have the scars," he says.

Other early influences shaped Plattner's career. He worshiped John F. Kennedy. "He had a vision," Plattner says, shifting into a nasal Boston accent to mimic Kennedy's voice: "We want to get to the moon in 10 years." For a kid growing up in beaten-down Germany, Kennedy represented the promise of a new, can-do era. When Kennedy was shot, Plattner was devastated. "I couldn't believe it," he says. "I went to bed and listened to the radio." Plattner followed in the footsteps of a grandfather and studied engineering--intent on being where the action was.

The future, it turned out, was to be built on electronics. In college, Plattner studied telecommunications, since a computer science program wasn't available. Upon graduating, he got a job as a sales consultant for IBM in Mannheim, Germany. That didn't last long. He left with four colleagues in 1972 to form SAP after they were rebuffed by IBM when they suggested creating a financial-software package for corporations. Their novel idea: to replace expensive custom applications with off-the-shelf packages. Since then, Plattner has been the company's cheerleader and visionary, mapping out technology and strategy while the original chairman, Dietmar Hopp, managed the business. Plattner became the No. 1 executive in 1998 when Hopp resigned and has remained SAP's spark plug.

SAP’s vision of the real-time enterprise is well on its way to being realised for the world’s largest organisations. SAP has faced many challenges during its existence, but it has conquered them all and emerged stronger each time. Plattner has laid a very strong foundation which the next generation of leaders is now building upon.

To commemorate his 60th birthday, SAP has published a book “Realtime” as a tribute to Hasso Plattner. From the description and review on the website:

In the book, 30 well-known colleagues, customers, and partners put forward their ideas on the subject of the realtime enterprise, and in doing so, pay tribute to a vision that Plattner and his companions have been forming since the foundation of SAP and, thanks to their software, have already had some success achieving. In a realtime enterprise, business processes are largely automated, software systems are adaptable, and all of the relevant data is available to the management at any time at the touch of a button.

This book recognizes Hasso's accomplishments as it relates the history of the real-time enterprise and invites you to share in its future.

You'll review SAP's vision for real-time technology, analyze the transformation produced by client/server computing and the all-pervasive network, explore the interaction between organizational structure and the capabilities of real time, and recognize the challenge confronting user interfaces and human/computer interaction.

Finally, you will observe how the emerging nervous system of RFIDs, voice recognition, virtual collaborative environments, and other leading-edge technologies is shaping our world.

The contributors include Ravi Kalakota (Mobility Unleashed), Vinton Cerf (Everything-to-Everything Connectivity), Carly Fiorina (The Integration Story), Bill Gates (Seamless Computing, described in two pages), Michael Hammer (The Process Revolution and ERP), Vinod Khosla (The Real-Time Enterprise), Geoffrey Moore (Context versus Core in the Real-Time Enterprise), Craig Barrett (Real-Time Hardware, in a page), and Esther Dyson (Cultural Change in the Real-Time Enterprise).

Plattner’s dream and SAP’s mission of creating real-time enterprises endures with the focus now on the last frontier – the small- and medium-sized enterprises of the world.

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TECH TALK: Good Books: Why I Read

For me, books are temples for the mind. The relaxation, the clear thinking, a glimpse of the road ahead – these are a few things that temples and books do for me. A good book encourages solitude as one joins the author in a journey into a world apart. For me, books have been the doors that have opened up new ideas and insights. As the years have passed, I have found my reading increasing, with a diversity that I wish I had encouraged when I was younger. This column shares some of the books that I am reading and have read recently.

I read because there is so much to learn from other people’s experiences. My reading is not as much for “time-pass” as it is for learning. I choose my books like we should chose friends – carefully. A good book, like a good friend, can leave a lasting impression. It can shape thinking and beliefs the way few people can. When we are listening to others (even family members or friends), we can always interrupt them to get across our point of view. With a book, we can do no such thing – we let the author weave us into a trance, slowly, inexorably. Our inattention is undivided and in solitude. We cannot argue, we can only imagine. We cannot fight, we can only contemplate.

There is something magical about a book, which can never be replicated by any of the other media – be it magazines, the Web or television. A book does not let us do multi-tasking. It demands undivided attention – there are no micro-moments. A book consumes our most precious resource – time. When we read a book, we are committing a significant chunk of mental time and attention that is the hardest to find in today’s multiplexed lives.

I read because a book challenges my thinking. It gives me perspectives that I otherwise might not have seen. A book also simplifies the complexities that we see around us. A book inspires in a way only great leaders can (and there are fewer of those around). A book transports us to different worlds – that we each create in our own mind’s eye. It expands horizons like a good teacher. It creates memories for life.

In the past 18 months, I find myself reading a lot more, and books other than the management and technology variety. For this, I have to thank our monthly Book Club meetings, where four of us with different backgrounds meet to share what we have read. What started as a one-off meeting nearly two years ago has grown into something which has given a new purpose for my reading. Bloggers have also made a mark on my reading. Recommendations from my favourite writers have gone a long way in influencing the books I read. I hope I can do the same for you.

Tomorrow: Mountains Beyond Mountains

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TECH TALK: Good Books: Mountains Beyond Mountains

I remember reading Tracy Kidder’s “A Soul of a New Machine” more than 10 years ago, while I was working in the US. The book made a lasting impact – it brought alive the romance of doing something different, something innovative, something which can change the world. So, when I first read about Tracy Kidder’s most recent book, “Mountains Beyond Mountains”, I was a tad disappointed to note that it was about a doctor in Haiti. I was hoping for something more exciting. Yet, the author’s reputation got the better of me, and I bought the book recently. Rarely have I been so wrong in judging a book by its cover.

“Beyond mountains there are mountains” is a Haitian proverb. It means that as you solve one problem, another problem presents itself. Solve that, and there’s another one waiting. In many ways, this is how my life has been for the past 18 or so months as we have been trying to tackle the problem of making affordable computing solutions. It was just the tonic I needed to immerse myself in reading the book.

It is one of the most remarkable stories I have read. It is about “the quest of Dr Paul Farmer, a man who would cure the world”. From the introduction on the book’s jacket:

At the center of “Mountains Beyond Mountains” stands Paul Farmer. Doctor, Harvard professor, renowned infectious-disease specialist, anthropologist, the recipient of a MacArthur “genius” grant, world-class Robin Hood, Farmer was brought up in a bus and on a boat, and in medical school found his life’s calling: to diagnose and cure infectious diseases and to bring the lifesaving tools of modern medicine to those who need them most. This magnificent book shows how radical change can be fostered in situations that seem insurmountable, and it also shows how a meaningful life can be created, as Farmer—brilliant, charismatic, charming, both a leader in international health and a doctor who finds time to make house calls in Boston and the mountains of Haiti—blasts through convention to get results.

“Mountains Beyond Mountains” takes us from Harvard to Haiti, Peru, Cuba, and Russia as Farmer changes minds and practices through his dedication to the philosophy that "the only real nation is humanity" - a philosophy that is embodied in the small public charity he founded, Partners In Health. He enlists the help of the Gates Foundation, George Soros, the U.N.’s World Health Organization, and others in his quest to cure the world.

Adds the Publisher’s Weekly: “Farmer founded Zanmi Lasante (Creole for Partners in Health), a nongovernmental organization that is the only health-care provider for hundreds of thousands of peasant farmers in the Plateau Central. He did this while juggling work in Haiti and study at the Harvard Medical School… During his work in Haiti, Farmer pioneered a community-based treatment method for patients with tuberculosis that, Kidder explains, has had better clinical outcomes than those in U.S. inner cities…Kidder provides a sympathetic account of Farmer's early life, from his idiosyncratic family to his early days in Haiti. Kidder also recounts his time with Farmer as he travels to Moscow; Lima, Peru; Boston; and other cities where Farmer relentlessly seeks funding and educates people about the hard conditions in Haiti. Throughout, Kidder captures the almost saintly effect Farmer has on those whom he treats.”

Tomorrow: Mountains Beyond Mountains (continued)

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TECH TALK: Good Books: Mountains Beyond Mountains (Part 2)

There is a quote (in the last chapter) which captures the essence of Dr Paul Farmer’s work and philosophy: “I have fought the long defeat and brought other people on to fight the long defeat, and I’m not going to stop because we keep losing. Now I actually think sometimes we may win. I don’t dislike victory.” By losing, Dr Farmer is referring to the death of patients despite of their best efforts. He continues: “You know, people from our background – like you, like most PIH (Partners in Health)-ers, like me – we’re used to being on a victory team, and actually what’re really trying to do in PIH is to make common cause with the losers. Those are two very different things. We want to be on the winning team, but at the risk of turning our backs on the losers, no, it’s not worth it. So you fight the long defeat.”

Farmer adds: “If we could identify losers like John [who died despite the efforts made by PIH], and not waste our time and energy on them, then we’d all be good, as they say in the States. Right? But the point of O for the P [preferential option for the poor] is that you never do that. You never risk that. Because before you turn your back on someone like John you have to be really sure, and the more you learn about John’s family the more you realize that the whole family, their whole – I mean, they’re basically extinct. He was the last kid…”

Tracy Kidder writes, after have walked for seven hours with Dr Farmer to see two families in Casse near Cange (in Haiti):

I am aware of other voices that would praise a trip like this for its good intentions, and yet describe it as an example of what is wrong with Farmer’s approach. Here’s an influential anthropologist, medical diplomat, public health administrator, epidemiologist, who has helped to bring new resolve and hope to some of the world’s most dreadful problems, and he’s just spent seven hours making house calls. How many desperate families live in Haiti? He’s made this trip to visit two.

I can imagine Farmer saying he doesn’t care if no one is willing to follow [his] example. He’s still going to make these hikes, he’d insist, because if you say that seven hours is too long to walk for two families of patients, you’re saying that their lives matter less than some others’, and the idea that some lives matter less is the root of all that’s wrong with the world. I think he undertakes what, earliesr today, he called, “journeys to the sick” in part because he has to, in order to keep going. “That’s when I feel most alive,” he told me once, “when I’m helping people.”

Doctoring is the ultimate source of his power, I think. His basic message is simple: This person is sick, and I am a doctor.

How does one person with great talents come to exert a force in the world? I think in Farmer’s case the answer lies somewhere in the apparent craziness, the sheer impracticality, of half of everything he does, including the hike to Casse.

Tomorrow: Mountains Beyond Mountains (continued)

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TECH TALK: Good Books: Mountains Beyond Mountains (Part 3)

As I read the book, I kept being amazed at the way Farmer battled all odds – right from childhood, when he grew up in a trailer. He is 8 years older than I am, and I could not but help ask myself how I have made a difference to the world. We all only live once – what is it that I can do which can help transform the world into a better place? One of Dr Farmer’s lines – “I can’t sleep. There’s always somebody not getting treatment. I can’t stand that.” – keeps resounding in my head. Here we are, with all the comforts that life has given us. And there is Farmer, amongst the “tin roofs of Cange”, working to ensure that every human life is saved. No price is too high to pay for the gift of life – anywhere in the world.

I have often wondered – can one or a few make a difference? Though the logical answer is probably a No, I have come to believe that Yes, it is possible. When Gandhi started the Dandi March, he was alone. We see the images at the end with the thousands, but that was not how it began. Frodo in “The Lord of the Rings” began his quest with just Sam and two other friends in his quest to destroy the Ring and save Middle Earth. There are many examples – from history, from fiction, from contemporary life. We see the final results and think about all who made it possible, and yet, when it all started, there must have been One. A mind’s idea and a person’s vision and determination can combine to bring about the most dramatic changes that one can think about. Dr Farmer’s pursuits are the embodiment of the fact that a few can, indeed, change the course of history. As Jim Kim, Dr Farmer’s colleague, says, quoting Margaret Mead, “Never underestimate the ability of a small group of committed individuals to change the world.” Added Jim: “Indeed, they are the only ones who ever have.”

There are many Dr Paul Farmers, but there is one Tracy Kidder, who brings it all to life. The book makes a deep and lasting impact as much for the work that Dr Farmer is doing and as much for Tracy Kidder’s realism-filled portrayal of the world around Dr Farmer. That is why the author is so important – as a reader, we hand over our time and trust to the author, and allow us to see the world through a different lens than our own. Kidder succeeds – but the real success will be if we start thinking about how we can bring an element of Dr Farmer in our lives. What is the Cange in our lives? What is the Zanmi Lasante that we can create?

Reading the book makes me think harder about what I want to do – how can I use my strengths, and those of people around me, so we can succeed in the two goals that I have set myself: how can we make computing affordable for the next billion users from the world’s emerging markets, and how we can transform rural India. There are times when I feel it is an uphill struggle, and one where the challenges are just too many to try and overcome. Now, I think of these problems as part of the course – mountains beyond mountains. Keep climbing. As Farmer said, “As members of the world community, we must recognize that we can and should summon our collective resources to save the countless lives that were previously alleged to be beyond our help.”

Tomorrow: The Scientists

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TECH TALK: Good Books: The Scientists

Tracy Kidder’s “Mountains Beyond Mountains” traces the story of one person’s quest to cure the world. John Gribbin’s “The Scientists” sheds light on the lives of the greatest inventors over the past 500 years. From the book’s description: “John Gribbin tells the stories of the people who have made science, and of the times in which they lived and worked. He begins with Copernicus, during the Renaissance, when science replaced mysticism as a means of explaining the workings of the world, and he continues through the centuries, creating an unbroken genealogy of not only the greatest but also the more obscure names of Western science, a dot-to-dot line linking amateur to genius, and accidental discovery to brilliant deduction.”

I haven’t been much of a reader of profiles or biographies or history. But as I seek out my own goals and objectives, I am finding it helpful to read about our rich heritage – especially in the sciences. Even as we see a lot of change in the world around us, the foundations were laid centuries ago – and one could go back right to the contributions Indians made to the world of science, mathematics and philosophy. If there is one thing reading about the lives of people and the stories of their inventions highlights, it is the sheer conviction that they had in their beliefs. They were entrepreneurs in their own right.

Writes John Gribbin: “The importance of the people and their lives is that they reflect the society in which they lived, and by discussing, for example, the way the work of one specific scientist followed from that of the other, I mean to indicate the way in which one generation of scientists influenced the next…Science is one of the greatest achievements (arguably the greatest achievement) of the human mind, and the fact that progress has actually been made, in the most part, by ordinarily clever people building step by step from the work of their predecessors makes the story more remarkable, not less. Almost any of the readers of this book, had they been in the right place at the right time, could have made the scientific discoveries described here. And since the progress of science has by no means come to a half, some of you may be yet involved in the next step in the story.”

The story does indeed continue in every sphere of science. In our world where we evaluate success or failure of tasks in days and months, it can sometimes become hard to see the progress that is being made across all areas of science. What the book does is show how today and tomorrow would not have been possible had it not been for the efforts of the scientists of yesterday.

QuickSilver

An interesting, and very different book, is Neal Stephenson’s “QuickSilver”. It is the first of a trilogy. Writes Amazom.com: “The novel, divided into three books, opens in 1713 with the ageless Enoch Root seeking Daniel Waterhouse on the campus of what passes for MIT in eighteenth-century Massachusetts. Daniel, Enoch's message conveys, is key to resolving an explosive scientific battle of preeminence between Isaac Newton and Gottfried Wilhelm Leibniz over the development of calculus. As Daniel returns to London aboard the Minerva, readers are catapulted back half a century to recall his years at Cambridge with young Isaac. Daniel is a perfect historical witness. Privy to Robert Hooke's early drawings of microscope images and with associates among the English nobility, religious radicals, and the Royal Society, he also befriends Samuel Pepys, risks a cup of coffee, and enjoys a lecture on Belgian waffles and cleavage-—all before the year 1700.”

Next Week: More Good Books

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TECH TALK: Good Books: Problem Solving

I recently attended a marriage. I dread attending wedding receptions because I invariably end up meeting people and having conversations with them without figuring out who they are. So, much of the conversation ends up trying to decipher clues as to their identify. The problem is compounded when they ask “Remember me” and you reply “Oh Yes, Of course I do” and they go on to ask “So, who am I?”

I went through a similar experience in a reception I attended recently. I talked with a travel agency owner thinking him to be a stock broker friend. Having realised my bloomer before the other person did, I started thinking of what could be done differently so I didn’t have to go through this again. Imagine if everyone were given name tags – just like the way it happens when we go to conferences and trade shows. While I agree that marriages are more informal settings, one of the purposes of these elaborate functions (especially in India) is to also foster meetings among friends and family in an otherwise busy life. So, why not make things easier by giving name tags at the time of walking in to the reception venue. In most cases, the set of people coming is known well in advance, so the tags could be kept ready in advance. Marriage meetings would suddenly be fun, less of a mental strain and embarrassment-free!

So, when I came across a book entitled “Why Not: How to Use Everyday Ingenuity to Solve Problems Big and Small” by Barry Nalebuff and Ian Ayres, I had to read it. After all, Nalebuff was the author of two earlier books I had read “Co-opetition” and “Thinking Strategically”.

Lateral thinking is not something which comes naturally to most of us. And yet, thinking and problem-solving is one of the most common and important tasks that we all do. Most of the time, we follow a structured process of ideation. We are called upon to make decisions all the time, so it isn’t easy to deviate too much from the norm and do lateral thinking every time!

Yet, there are times when we will want to think differently. This is how inventions and innovations are born. If we were all satisfied with the way things are, there would be little progress. It is the angst, the discomfort, the desire for there to be a better approach that drives the innovator in us to do things to change status quo.

In the formal education that we go through, there is time spent on anything outside the book. Yet, in the exams that we undertake, we are expected to be ingenious in how we solve the problem. We are warned that in exam papers like JEE (for IITs) or CAT (for IIMs) or GRE/GMAT, many problems have a simple, shorter way to the solution. We are expected to find this without any structured training in thinking.

So, many of us find outlets in brain teasers and puzzles to stimulate thinking. When we are young, these mathematical and logic games become a challenge to the mind. As we grow older, much of this thinking and puzzling gives way to conformity and following the path laid down by others. Only a few among us tread away from the beaten path. It is these unplanned, impromptu exits from the crowded highways of life that brings about innovation. Asking not “Why” but “Why Not” is the first step in the process of discovery.

Tomorrow: Why Not

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TECH TALK: Good Books: Why Not

Nalebuff and Ayres take the view that innovation can be learnt, and there is a framework for thinking “out-of-the-box.” The book, through a series of examples, shows the way in which we can implement innovative thinking as part of our normal course of work, giving a platform for coming out with ideas and hopefully, solutions to challenging problems. “Why Not” describes four approaches to problem solving.

The first is WWCD – What would Croesus do? Croesus was a very wealthy king and in this context it is taken to mean infinite resources. So, how would we solve a problem if there were no constraints. What this does is show that a solution exists, and then we can work on refining it. “An innovator might produce 99 percent of the benefit for 1 percent of the cost.”

The second approach is to internalize the externalities – Why aren’t you feeling my pain? This focuses on creating the right incentives. “The trick is to look at some choice that buyers or sellers make whereby the decision maker’s benefit from the value is less than the cost it imposes on others…If the decision maker is made to feel your pain, she will end up doing the right thing…Figure out what you like the person to do differently, and then provide the right rewards and punishment, accordingly.”

The third approach involves idea arbitrage – Where else would it work? In this case, the tool starts with a solution and looks for other problems the solution can be translated to. “Translation often requires adaptation – not just brute arbitrage, but arbitrage with a twist. The translated solution needs be well translated or blended to fit the context and institutions of the new setting.”

The fourth tool involves symmetry – Would flipping it work? This means trying things the other way around. “It takes an existing solution in a given context and turns it around to get a new perspective.”

The goal, as the authors put it, is “principled problem-solving, [which can] help you see the solution more clearly. While we typically think of filters as constraints, we want to convince you that identifying the underlying attributes of any solution can be liberating and can actually help you generate ideas…Principled problem solving means that you take into account the principles that any solution must satisfy. The more of these principles you can identify, the closer you are to the solution. There may be fewer options to explore, but those are the right ones to focus on.”

As I read the book, I thought about the challenges we face in our quest to tap the SME and rural markets. The key is to frame the problem correctly .For example, in addressing the issue of making computers more affordable, one should ask not “how do we provide a computer to every employee?” but “how can we provide computing to every employee?” The former question will invariably point us to a low-configuration computer (use one with a lower-end processor, or use a refurbished computer), but the latter will point us in the direction of thin clients and server-centric computing.

So, here are two practice exercises that Nalebuff and Ayres discuss to show how to apply the principles. (Read the book for the solutions.) The Four Seed Puzzle: The task here is to plant seeds so that each seed is equidistant from the other seeds. The Ten-Seed Puzzle: The task is to plant ten seeds in a way so that they form five distinct rows, each with exactly four seeds. Happy thinking!

{Postscript: A book on a related theme is “How would you move Mount Fuji?” by William Poundstone. It focuses on puzzles asked during job interviews at Microsoft.]

Tomorrow: Why Things Break

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TECH TALK: Good Books: Why Things Break

Things break all the time. I haven’t worried much about breaking things so far in life, though there are times when it has a direct impact. The bag which comes apart at the wrong time, the cassette/CD case which rarely seems to last for too long, the toys which break all too quickly, the glass which develops cracks, the spectacles frame that seems to give way all of a sudden, software programs which crash – these are all “breakages” which have passed by my life. So, my attention was grabbed by the book entitled “Why Things Break” with the byline “Understanding the world by the way it comes apart.”

The author is Mark Eberhart, who received his doctorate from MIT in materials science, and is now a professor at the Colorado School of Mines. From the book introduction: “In [the book], Eberhart leads us on a remarkable and entertaining exploration of all the cracks, clefts, fissures, and faults examined in the field of materials science and the many astonishing discoveries that have been made about everything from the explosion of the space shuttle Challenger to the crashing of your hard drive. Understanding why things break is crucial to modern life on every level, from personal safety to macroeconomics, but as Eberhart reveals here, it is also an area of cutting-edge science that is as provocative as it is illuminating.”

The book deals primarily with materials science. It is a topic I know we will have to look at closely as we build out our pilot RISC (Rural Infrastructure and Services Commons) centre in rural India. We have often discussed on the need to focus on creating a breakthrough design – we can afford to do so because we are starting from scratch. We want to not only build a centre which is aesthetically good-looking, but one which can weather the wear and tear that the elements and usage will bring forth. So, the right choice of materials is going to be important. Ensuring that things don’t break will be even more critical as we seek to do a design which we can roll out across the rural areas in India and then the rest of the world.

The book gives a framework to think about materials. As the author writes:

The fun becomes when I say, “I study why things break, not when.”

It is a common misunderstanding, confusing when with why. What people really understand is when things break. Fracture, as with almost every other phenomenon, is composed of two parts, cause and effect. The question of when deals with the cause, while that of why deals with the effect. An engineer can control the phenomenon with an answer to either question. For example, knowing that a drinking glass will break when it is dropped, an engineer could carpet the floor and avoid a cause of the fracture. Similarly, the engineer can change why the glass breaks by changing the material from which it is made. A tin cup will not break when dropped.

What intrigues me is that so much of mankind’s development in history, art, science and economy is intimately intertwined with the fact that some things break while others bend. Despite the fact that throughout history we have worked to develop a nearly complete answer to the question of when things break and bend, we have only the most rudimentary understanding of why they do so.

The book is an interesting tour through the world of materials that shape our lives. Read it, ponder the effect on the breakages that affect our lives and think about what can be done to solve the problems.

Tomorrow: The Gifts of Athena

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TECH TALK: Good Books: The Gifts of Athena

If there is one driving, unifying factor that connects us and what we do, it is the relentless pursuit of knowledge. It is knowledge and its application which has seen us progress, and has now put us on a self-reinforcing circle of technological innovation and economic growth. Much of this transformation has been driven in the past few centuries (at least, that is the part which is documented and is understood). Even as we live through a period of remarkable and accelerating change, it can sometimes become difficult to fathom the important role that knowledge plays in our progress.

What is interesting about our times is that for the first time in our history, knowledge dissemination is happening via an overlay of networks that can connect people the world over nearly instantaneously. The Internet connects individuals, information and computers, Google makes the connection between individuals and web pages, and Amazon connects us to repositories of books that we didn’t even know existed. What happens in one part of the world is relayed by television networks, email and cellphone nearly instantaneously across cultures and timezones. Even in enterprises, it is the availability of real-time knowledge that is transforming supply chains.

This is the backdrop for reading Joel Mokyr’s “The Gifts of Athena: Historical Perspectives of the Knowledge Economy.” From the book’s introduction:

The growth of technological and scientific knowledge in the past two centuries has been the overriding dynamic element in the economic and social history of the world. Its result is now often called the knowledge economy. But what are the historical origins of this revolution and what have been its mechanisms? In [the book] Joel Mokyr constructs an original framework to analyze the concept of "useful" knowledge. He argues that the growth explosion in the modern West in the past two centuries was driven not just by the appearance of new technological ideas but also by the improved access to these ideas in society at large--as made possible by social networks comprising universities, publishers, professional sciences, and kindred institutions. Through a wealth of historical evidence set in clear and lively prose, he shows that changes in the intellectual and social environment and the institutional background in which knowledge was generated and disseminated brought about the Industrial Revolution, followed by sustained economic growth and continuing technological change.

Mokyr draws a link between intellectual forces such as the European enlightenment and subsequent economic changes of the nineteenth century, and follows their development into the twentieth century. He further explores some of the key implications of the knowledge revolution. Among these is the rise and fall of the "factory system" as an organizing principle of modern economic organization. He analyzes the impact of this revolution on information technology and communications as well as on the public's state of health and the structure of households. By examining the social and political roots of resistance to new knowledge, Mokyr also links growth in knowledge to political economy and connects the economic history of technology to the New Institutional Economics.

The place where knowledge matters most is for the Indians living in rural areas.

Tomorrow: Knowledge and Rural India

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TECH TALK: Good Books: Knowledge and Rural India

As Atanu Dey and I wrote in a paper: “Poverty can be considered to be the result of two gaps: one, the ideas gap, and the other, the objects gap. Poor people have less material goods at their disposal as compared to rich people. Hence the objects gap. The ideas gap arises from the inability of poor people to most effectively and efficiently use the limited material resources they have. For any level of objects gap, an ideas gap amplifies the problem. Knowledge goods, efficiently produced and distributed by ICT, can bridge the ideas gap.” It is this context in which it is useful to understand the creation of appropriate technology and their diffusion to bring about an economic transformation of rural India. What can the history of the developed world teach us?

Joel Mokyr writes in “The Gifts of Athena”:

The rise of Western technology in the past three centuries suggests [that] knowledge has to flow from those who know things to those who make things. There are many forms these flows can take, from the lecturers, philosophical societies, and encyclopedias of the eighteenth century to the community colleges and internet of the twenty-first. But the institutions that facilitate these flows have to exist.

For better or for worse, the history of the growth of useful knowledge is the history of an elite: the number of people who augmented the sets of prepositional and prescriptive knowledge is small, even if we take into account the majority of experimenters, philosophers, would-be inventors, and thoughtful mechanics whom history has not recorded because they contributed small sentences to the book of knowledge. The bulk of productivity gains come from the small incremental technicians and mechanics who find a way to tweak the instructions on the margin to make things work just a little better.

The roots of twentieth-century prosperity were in the industrial revolutions of the nineteenth, but those were precipitated by the intellectual changes of the Enlightenment that preceded them. To create a world in which “useful” knowledge was indeed used with an aggressiveness and a single mindedness that no other society had experienced before was this unique Western way that created the modern material world.

Adds figvine in a review on Amazon about the book:

Apparently some economists believe that the Industrial Revolution must have been driven primarily by economic forces (new means of capitalization and rising demand) rather than by the availability of science, because of the multi-century lag from Kepler and Newton to the economic blastoff. But Mokyr argues that there was a necessary intermediate stage, the "Industrial Enlightenment", which structurally altered the relationship between "what-is" and "how-to" forms of knowledge, as well as making both forms radically more accessible to artisans, entrepreneurs, and the general public.

If urban India has to grow, it needs to take rural India with it. For the growth of rural India, it is necessary to create a mechanism to diffuse knowledge and innovations – to create the “enlightenment” that will necessarily have to precede development. This is where we need to combine ideas from economics and innovations in technology to create a knowledge-driven platform for bridging the ideas divide first and then the income and object divides in rural India.

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2 Books to Read

Two books I am planning to read in the coming days as I travel are Smart Mobs by Howard Rheingold (who has also written Virtual Community), and David Allen's Getting Things Done.

I remember reading Rheingold's Virtual Community just as the Internet was rising into prominence. He has always been a good forecaster of things to come. Smart Mobs is "the next social revolution" and promises to "transform cultures and communities in the age of instant Internet access." Looking forward to Smart Mobs. [Slashdot thread]

David Allen's book will, hopefully, make me more productive! We all have more things to do than time, so could do with techniques to make us more efficient. Let's see. Of course, in this case, I also have to make sure I have the time to implement the techniques!

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Gerstner's Elephants and Crichton's Prey

Two good books I have read recently: Lou Gerstner's Who Says Elephants Can't Dance? and Michael Crichton's Prey. Gerstner was CEO of IBM for the past 9 years and instrumental in its turnaround. Crichton authored, among others, Jurassic Park and The Lost World.

Gerstner details his IBM years. It is a fascinating insight into how IBM regained its leadership position in the tech industry. A decade ago, it was en route to extinction. Today, along with Microsoft, it is one of the two companies that define the industry. One fears Microsoft, but one respects IBM. And a lot of that credit goes to Gerstner.

Crichton is always a great read, even though his previous book (Timeline) was a disappointment. This time, he delves into Nanotechnology and Artificial Life for his plot. The core of the book is great, but the last third was not as good. Overall, it is still a book you'll end up finishing in a single sitting.

The latest Economist has a report on Nanotech, taking Crichton's book as its lead. News.com has a perspective on Nanotech, stating "[it] is an enabling and potentially disruptive technology that can solve problems in industries as disparate as telecom, biotechnology, microelectronics and energy. Currently more than 100 start-ups are developing nanotechnology-based products that will be marketable in the next three years."

Sidelight: an interesting thing about buying books in India is how cheap you can get them. Gerstner's book costs Rs 580 (USD 12) vs USD 16.77 on Amazon, while Crichton's book costs Rs 195 (USD 4) vs USD 16.17 on Amazon.

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TECH TALK: Good Books: Books and I

Since time immemorial, the written word in the form of books has been used to spread knowledge. Today’s world is no different. Even with the choice of multiple media like television and the Internet, there is nothing better than spending an afternoon reading a good book. As newspaper and magazine articles tend to get shorter (and in some cases, dumber), the book remains the best way to expand one’s horizons. In our instant and real-time present, there is something about a book which slows time as one is transported into the world of new ideas and characters created by the author.

Books are not limited by space as newspapers and magazines are, or by time as television stories are. Because books do not distract with ads or visuals, they allow the formation of images of our own. In that sense, books are the ultimate personalised experience. Each of us has our memories about our favourite books, especially the time when we read them first. They take us back to our past, becoming synonymous with memories of an era gone by.

My earliest memories of books are the Famous Five, Secret Seven and Hardy Boys series. I remember going to the local library every week and picking up the books, and then anxiously waiting for time between school studies to read them. They helped nourish my language and fed the imagination. Those adventures became my own. Books and I started a friendship which has endured ever since.

Next came Agatha Christie’s Hercule Poirot and Miss Marple, and Arthur Conan Doyle’s Sherlock Holmes and Dr Watson. Every story, every book enveloped me in its own mystery. Along similar lines was Erle Stanley Gardner’s Perry Mason series. The goal in reading all remained the same – could I solve the mystery before the end of the book. The authors inevitably outwitted me, and that made me read the next in the series – hoping that the next time, I’ll be smarter!

Somewhere along the line, PG Wodehouse took over. The delectable wit of Jeeves and the inimitable Bertie Wooster meant that every book just had to read – and re-read. The subtle humour, the tricky situations, the wonderful language – this was English literature at its best for me. I still remember going to Strand Book Shop in Mumbai hunting for the PGs that one had somehow missed!

One of my regrets is that I did not read much from Indian authors. I only read a little of RK Narayan. Perhaps, there is still time to go back to them. I don’t know why I read less about India – maybe, I wanted my images of India to be self-formed. I do remember reading Vikram Seth’s tome, “A Suitable Boy”. For the hype it had generated, I couldn’t but feel disappointed.

My four-year stint at IIT reinforced my love for books. Maybe, it was because books were more easily accessible (through hostel mates and the well-stocked library). Or, perhaps, because one always had plenty of time: skipping (boring) lectures on Electrical Engineering, spending the time reading a book and then discussing it with friends later in the evening was seen as cool.

Tomorrow: Books and I (continued)

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TECH TALK: Good Books: Books and I (Part 2)

My time in the US built on my attraction for books. New York had excellent book stores. My favourite was the namesake of the one in Mumbai – Strand. Its collection of second-hand (read cheaper) books was too much to resist. It was then that I discovered poetry. In school, one was used to analysing each line from a “reference to context” viewpoint. But now, it was different. Poetry had emotion and depth. Even today, I treasure the one book which started it all – a treasury of a thousand poems. Some brought back old memories of school and teachers, others heightened the joy of new discovery.

The Book Clubs in the US also created easy access. That was how I got my first Calvin and Hobbes. Through the years, the story of the six-year-old and his tiger has never failed to delight. It was a sad day when the series was ended by Bill Watterson.

In recent times, Amazon has been a delight, creating an almost infinite, connected (through recommendations) supply of books. Amazon has become one of the wonders of the Internet, delivering everything I want so faithfully.

As time has gone on and I have gotten more into business, my reading has also changed. The past decade has seen the reading change to more business and management books, searching for news ideas and inspirations. I have always found some of my best ideas have come while reading – one of the reasons may be because it gives me chunky time which is otherwise difficult get.

When I was thinking about IndiaWorld in the fall of 1994, I came across “Competing for the Future” by CK Prahalad and Gary Hamel. As I read it over a two-day stretch sitting at a friend’s house in Sunnyvale, various ideas constituting the business plan of IndiaWorld came together. It was that book which gave me the confidence to think long-term and use a vision for the future as a competitive advantage.

Earlier this year, four of us got together and started an informal book lovers club. We meet once a week for about two hours. Each one of us shares with the others the books he has read (or is reading), and what is interesting. This has exposed me to a much wider variety of books and ideas. One of the reasons is that the world that each of us inhabits is very different, necessarily leading to diversity in one’s reading. [A recommendation: try doing the same – find three other people who are quite different from you with whom you can meet once a month to discuss books.]

I have written about books before – here’s a collection. Over the coming columns, I’ll once again share some of the books I have read recently, others that I am reading (a distinct bias towards management and technology books), and a few unusual ones which are perennial favourites.

Tomorrow: Shackleton and Influence

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TECH TALK: Good Books: Shackleton and Influence

Shackleton’s Way: Leadership Lessons from the Great Antarctic Explorer
By Margot Morrell and Stephanie Capparell

Reading about Shackleton is one of the most amazing lessons in leadership. He was a great explorers. In 1914, he led a team of explorers to the Antarctic. Their ship hit an iceberg. They were 1200 miles from civilization, with no means of communications or hope for rescue. The book traces their journey and how Shackleton ensured that every one of the team made it to safety. A book like this makes the challenges faced by Shackleton so vivid that it creates a lasting impression.

The authors link Shackleton’s actions in the face of extreme adversity to leadership lessons that we can learn. While the lessons by themselves may not be new or different, reading Shackleton’s experiences makes it come alive, and perhaps, makes the learning more lasting. We tend to remember more when we have experienced something or read/seen others experience it. By reliving the journey of Shackleton and his men through nearly two years of arduous conditions, one can learn a lot of lessons which can be applied in life and business. Here are a few examples:

Be bold in vision and careful in planning. Dare to try something new, but be meticulous enough in your proposal to give your ideas a good chance of succeeding.

Your No. 2 is your most important hire. Pick one who complements your management style, shows loyalty without being a yes-man, and has a talent for working with others.

Break down traditional hierarchies and cliques by training workers to do a number of jobs, from the menial to the challenging.

Match the person to the position. Be observant of the types of people who are working for you and what jobs might best suit their personalities as well as their experience.

When crisis strikes, immediately address your staff. Take charge of the situation, offer a plan of action, ask for support and show absolute, confidence in a positive outcome.

Influence: The Psychology of Persuasion
By Robert Cialdini

The book was first published in 1984, but is as relevant today as it was then. It talks about “weapons of influence” in marketing – how tricks and mindgames are used by those selling, and what we can do to learn (or resist) them. Using a variety of examples, Cialdini presents six principles used by compliance practitioners – reciprocation, consistency, social proof, liking, authority and scarcity.

Here’s an excerpt from CSJ.org on one of the principles: Reciprocity.

According to sociologists and anthropologists, one of the most widespread and basic norms of human culture is embodied in the rule of reciprocity. The rule requires that one person try to repay, in kind, what another person has provided. By obligating the recipient of an act to repayment in the future, the rule for reciprocation allows one individual to give something to another with confidence that it is not being lost. This sense of future obligation within the rule makes possible the development of various kinds of continuing relationships, transactions, and exchanges that are beneficial to the society. Consequently, all members of the society are trained from childhood to abide by the rule or suffer serious social disapproval. The decision to comply with another's request is frequently influenced by the reciprocity rule. One favorite and profitable tactic of certain compliance professionals is to give something to another before asking for a return favor. The exploitability of this tactic is due to three characteristics of the rule for reciprocation:

1. the rule is extremely powerful, often overwhelming the influence of other factors that normally determine compliance with a request;

2. the rule applies even to uninvited first favors, thereby reducing our ability to decide whom we wish to owe and putting the choice in the hands of others;

3. the rule can spur unequal exchanges; to be rid of the uncomfortable feeling of indebtedness, an individual will often agree to a request for a substantially larger favor than the one he or she received. Another way that the rule for reciprocity can increase compliance involves a simple variation on the basic theme: instead of providing a first favor that stimulates a return favor, an individual can make an initial concession that stimulates a return concession. One compliance procedure, called the rejection-then-retreat technique, or door-in-the-face technique, relies heavily on the pressure to reciprocate concessions. By starting with an extreme request that is sure to be rejected, a requester can then profitably retreat to a smaller request (the one that was desired all along), which is likely to be accepted because it appears to be a concession. Research indicates that, aside from increasing the likelihood that a person will say yes to a request, the rejection-then-retreat technique also increases the likelihood that the person will carry out the request a will agree to future such requests.

Tomorrow: What Management Is and Drucker

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TECH TALK: Good Books: What Management Is and Drucker

What Management Is: How It Works and Why It’s Everyone’s Business
By Joan Magretta

It seems so obvious what management is. Or does it? Magretta explains in straightforward language basic terms like Value Creation, Business Models, Strategy and Organisation. We tend to use these terms so often without quite really understanding their significance. is a must-read – both for beginners and practitioners.

Writing about business models, Magretta writes:

A business model is a set of assumptions about how an organization will perform by creating value for all the players on whom it depends, not just its customers. In essence, a business model is a theory that’s continually being tested in the marketplace.

A business model is a story of how an enterprise works. Like all good stories, a business model relies on the basics of character, motivation, and plot. For a business, the plot revolved around how it will make the money. For a social enterprise, the plot is how it will change the world (or at least its targeted corner of the world). In both cases, the characters must be precisely delineated, their motivations must be plausible, and the plot must turn on an insight about value.

Many a time, we end up managing by trial-and-error (not all of us are fortunate enough to have formal a management education). There are times when we feel that our choices would perhaps have been different if only we knew then what we know now, or if we had spent that little extra time thinking on some of the fundamentals of the plan. Magretta’s book makes us think – on some of the most basic principles on our business runs. And therein lies its success.

Managing in the Next Society
By Peter Drucker

Drucker’s book begins with “I did once believe in the New Economy. The year was 1929…”. For those among us who have only known the New Economy, Peter Drucker’s newest book (a collection of recent essays and interviews) needs to be read! Drucker has seen the world of all of business for the better part of seven decades. In his book, he talks about the information economy and what has changed (and what hasn’t), and the social trends (demographics, for one) which portend huge change in the coming years.

Here’s what Drucker says about one of four entrepreneurship pitfalls – where the new and growing business typically gets into trouble:

The [pitfall] comes when the entrepreneur has to face the fact that the new product or service is not successful where he or she thought it would be but is successful in a totally different market. Many businesses disappear because the founder-entrepreneur insists that he or she knows better than the market.

The majority of successful new inventions or products don’t succeed in the market for which they’ve been originally designed. [Entrepreneurs reject unexpected success.] Because it’snot what they had planned. Entrepreneurs believe that they are in control. And that leads to the [next pitfall]. Entrepreneurs believe that profit is what matters most in a new enterprise. But profit is secondary. Cash flow matters most.

My recommendation for entrepreneurs and managers: take two days off from life, read both the books, think, and live them.

Tomorrow: Warren Buffet and Nexus

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TECH TALK: Good Books: Warren Buffet and the Ultimate Business Resource

The Real Warren Buffet: Managing Capital, Leading People
By James O’Loughlin

I have not followed much of Warren Buffet’s life and moves because I always viewed him as a savvy investor. My view changed when, in a recent discussion on books as part of our informal gathering, I heard excerpts from this book on Buffet.

Warren Buffet came across as one of the smartest and sharpest minds that I’ve come across. His life has not just bene about managing money. His leadership skills may have been underplayed but his CEOs (from the companies he has acquired) prefer him to being on their own. The result: not a single CEO of the firms Buffet has bought (and consequently, made the CEOs rich) has left him.

At the heart of the book is O’Loughlin’s discussion on Buffet’s Circle of Competence, which is “a meta-model, a sythesis of the array of mental models that he brings to bear in his analysis of the world. It is a model that does not go in for completeness. It is a model that recognizes that some things that are knowable are not important. It also accepts that some other things that are important are unknowable. It is a model that, to the exclusion of all else, focuses on the important and knowable.”

Adds the author about Buffet:

1. He establishes what he knows by identifying the truths, the dynamics that sit behind them, and their relationships to each other.
2. He ensures that he knows by a process of inversion whereby he seeks to disprove his prior conclusions.
3. He checks that he knows by seeking out feedback from the consequences of his decision.

If there is one book on Buffet that you are going to read, it has to be this.

Business: The Ultimate Business Resource
By Daniel Goleman et al.

This book has to be seen to be believed. It weighs 4 kgs and has more than 2,000 pages. It has 140 “best practice” essays from some of the leading names in the world of business and management, 116 “management checklists”, summaries of 70 most influential business books, and over 100 biographies of business thinkers and pioneers. It’s not done yet! The book also includes a dictionary of business words and phrases, a collection of facts and statistics on almost every country and industry, and finally, plenty of additional resources of information.

Writes Business Week in a review on the best reason to buy the book: “Most people in business start in narrow disciplines for which specialized knowledge is important. But as they move higher in organizations, they are increasingly required to perform tasks that fall outside their specialty – and they are likely to find themselves managing people. So for many execs moving up the ranks, this volume, largely because it is so comprehensive, is a worthwhile starter.”

At a list price of USD 60 (Rs 1,790 at Strand Book Shop in Mumbai), it is also quite a deal.

Next Week: More Good Books

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TECH TALK: Good Books: Product Platforms and Strategy

Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation
By Annabelle Gawer and Michael Cusumano

Platform leadership, according to the authors, is the Holy Grail of high-tech industries. Many strive for it, but few succeed. Platform leadership is what companies like Intel (microprocessors), Microsoft (software), Cisco (networking) have managed to achieve. The book also discusses platform strategies used by Palm, Linux and NTT Docomo.

Gawer and Cusumano discuss four levers of platform leadership: scope of the firm, product technology, relationships with external complementors and internal organisation. Write the authors:

By definition, platform leaders who succeed can exert a strong influence over the direction of innovation in their industries and thus over the network of firms and customers – their “ecosystem” – that produces and uses complements. The dynamics that makes platform leadership possible occur only in certain conditions. A fundamental condition is that the firm’s product has limited value when used alone but gains in value when used along with its complements. For Intel, the starting point was recognizing that, without innovation on complements and evolution of the PC platform, its main product line – the microprocessor – would have very limited appeal.

The realization that demand for one’s core product depends on an array of complements – and therefore, that one’s destiny depends on decisions and actions of others – is the starting point for thinking like a platform leader. Platform leadership, combined with complementary innovation, can result in win-win scenarios for the platform leader, complementors and customers, if everyone works together.

The essence of platform leadership begins with a vision that extends well beyond the business operations of one product or one component. It is a vision that says the whole of the ecosystem can be greater than the sum of its parts, if forms work together and follow a leader.

Product Strategy for High Technology Companies
By Michael McGrath

McGrath’s book talks about high-tech product strategy. In a sense, it complements the Platform Leadership book, and at the same time presents a much wider framework on creating a product strategy. The four building blocks for product strategy are:

1. Core Strategic Vision (CSV), which is about answering questions like: where do we want to go, how will we get there, why will we be successful
2. Product Platform Strategy, which defines the cost structures, capabilities and differentiation of the resulting products
3. Product Line Strategy, which defines the specific product offerings for a particular product platform, along with a time-line
4. New Product Development, which defines the specific functionality for each new product offering

Derived from these building blocks is the Market Product Platform (MPP), which “enables companies to transform platform strategy into a practicable attack plan for a target market.”

Three other related books on innovation and high-tech marketing:

The Innovator’s Dilemma by Clay Christensen, which discusses disruptive innovations

Crossing the Chasm by Geoffrey Moore, which talks about how to make the transition from selling to the early adopters to winning the early majority

The Chasm Companion by Paul Wheels, which is a fieldbook and implementation guide to Crossing the Chasm

Tomorrow: The Story of Entrepreneurs

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TECH TALK: Good Books: The Story of Entrepreneurs

Giants of Enterprise: Seven Business Innovators and the Empires They Built
By Richard Tedlow

Enterprise defines modern business. Business innovators are responsible for much of what we see around us. Be it the ones who built the railroads across much of the US in the mid-19th century or the dotcommers who spurred the adoption of Internet technology more rapidly than any other, entrepreneurs have always taken risks, done things differently; in the process, they’ve broken old rules and created new ones. Not all entrepreneurs are successful. In fact, most fail. And even the successful ones have to endure failure. A mix of vision and will, combined with daring and determined execution combine to make possible some of the most successful entrepreneurs.

Tedlow’s book profiles seven “extraordinary men doing what Americans do best: building new businesses. They overcame seemingly impossible obstacles to achieve enormous success and, in the process, played a role in the creation of the modern world.” The seven: Andrew Carnegie, George Eastman, Henry Ford, Thomas Watson Sr, Charles Revson, Sam Walton and Robert Noyce.

Writes Tedlow in his introduction:

These are seven stories about men who saw things others did not and made the most of their insight. They used tools that were available to others as well, but used them with greater skill.

For what purpose? To win. To own. To control. To create. This is the story of seven capitalists seizing opportunities in spite of what others saw as constraints.

These seven were all risk takers, innovators, experimenters. They were all more hungry for success than they were afraid of failure. They all had the courage to change not only when things were going badly but, and this is much more difficult, when things were going well.

In this context, it is interesting to read about two contemporary entrepreneurial companies. We have seen and perhaps even used either or both of their products and services, and that is what captures the imagination as we read about them.

The Weather Channel: The Improbable Rise of a Media Phenomenon is written by its founder Frank Batten. As the title says, The Weather Channel is one of those unlikely success. Who would have imagined a channel talking about temperatures, isobars and storms to be so commercially successful? Who would have expected people in the US to watching of all the things a weather channel? It is a fascinating story of a channel and concept almost no one expected to succeed.

Piloting Palm by Andrea Butter and David Bogue is billed as “the inside story of Palm, Handspring, and the birth of the billion-dollar handheld industry”. Butter was a marketing executive at Palm from 1993 to 1999. Pogue is the personal technology columnist for the New York Times. Future success for Palm is still not guaranteed, even as it has split into two companies – one focusing on the hardware and the other on the software. But the story makes fascinating reading.

Tomorrow: Dragon Stories

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TECH TALK: Good Books: Dragon Stories

>Dragon Multinational: A New Model for Global Growth
By John Mathews

Most business books tend to focus on success stories from the developed markets such as the US or Western Europe. Few, if any, look at the emerging markets. Of course, the success stories of emerging market companies that have become global players are also few and far between. But what does it take for these companies to succeed in the competitive marketplace? That is a question John Mathews set out to answer. His book describes the “extraordinary success of a handful of multinationals from the Periphery [as opposed to the Triad of North America, Europe and Japan] in globalizing their operations extremely rapidly and becoming major players in industries as diverse as steel, cement, information technology, and general manufacturing, as well as in services such as finance and hotels.”

Mathews describes dragon multinationals as “companies that start with disadvantages as latecomers, but they devise clever strategies of linkage and leverage to take advantage of the worldwide web of interfirm connections that characterize the global economy…These are firms that start from behind and overcome their deficiencies to emerge as industry leaders, in sometimes astonishingly short periods of time, without any of the advantages of the incumbent industry leaders. They do so without initial resources, without skills and knowledge, without proximity to major markets, and without the social capital that is to be found in regions like Silicon Valley.”

Among the enterprises Mathews discusses are Acer, Li & Fung, Ispat, Cemex and the Hong Leong Group.

Growing Global: A Corporate Vision Masterclass
By Stan Shih

Acer is one of the dragon multinationals Mathews discusses extensively in his book. So it’s good to get a more detailed perspective from Stan Shih, Acer’s founder and CEO. Acer is, arguably, one of the big successes out of Asia in the IT industry. It has gone through many ups and downs, overcome the limitations of its small home market in Taiwan, and restructured many times to emerge as a global player. Acer’s lessons and learnings are very useful for many in the emerging markets who have global dreams.

Stan Shih writes out the four challenges Acer faced in its globalisation: the need to overcome the stereotype of “MIT” (Made in Taiwan), with Taiwan being perceived as a place for manufacturing low-cost, low-quality products; very limited financial resources to fund global operations; access to a relatively limited pool of global talent; highly fragmented Asian markets which do not enjoy the same economies of scale as US or Europe.

Shih discusses Acer’s three major globalisation strategies: a “Global Brand, Local Touch” strategy to develop a strong partnership with leading local channel partners to increase access to funds, talent and marketing capabilities in different markets; a “From Peripheral to Core” strategy, starting with secondary markets (developing economies) to then move to the core markets; an “Innovation in Technology and Management” strategy which entailed the development of innovative products and management practices.

Tomorrow: The New Enterprise

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TECH TALK: Good Books: The New Enterprise

The Company of the Future: How the Communications Revolution is Changing Management
By Frances Cairncross

The Economist’s Cairncross provides an excellent overview of the changes that we are seeing around us, largely driven by new technologies. It focuses on management and managers, who need to understand and adapt to these emerging technologies and at the same time translate them into guidelines that people within their organisations can understand and act upon. The challenge that we face is it that people don’t change as fast as technologies, and neither do some of the basics of business and management.

As Cairncross writes, the Internet makes it easier to manage collaboration: “In companies, teams will have new opportunities to work together; companies too will collaborate more, in alliances that allow them to outsource production or to spread risk or to enter new markets. Teams may be separated by time zone or by geographic distance and increasingly will work for different employers. Successful collaboration will require excellent communication, and incentives that reward sharing information and working for common goals.”

X-Engineering the Corporation: Re-engineering your Business in the Digital Age
By James Champy

Champy is the co-author of Re-engineering the Corporation. He describes X-Engineering: “It is about achieving breakthrough business performance by applying information technology to redesign processes that cross organizational boundaries. It requires that you rethink your whole business and all its relationships, not just with customers but also with suppliers, partners and employees – even competitors.”

Peter Drucker has described the Information Revolution as a Knowledge Revolution, and us as knowledge workers. Two other books discuss the importance of knowledge in the new enterprise.

The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization
By Thomas Stewart

In his book, Stewart, who had written Intellectual Capital earlier, shows “how to apply the concept of intellectual capital to manage knowledge assets”. In one of the chapters on creating an Intellectual Capital strategy, Stewart discusses a four-pronged approach: identify and evaluate the role of knowledge in your business – as input, process and output; match the revenues you’ve just found with the knowledge assets that produce them; develop a strategy for investing in and exploiting intellectual assets; improve the efficiency of knowledge work and knowledge workers.

Cultivating Communities of Practice: A Guide to Managing Knowledge
By Etienne Wenger, Richard McDermott and William Snyder

Write the authors: “Communities of practice are groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in this area by interacting on an ongoing basis…These people don’t necessarily work together every day, but they meet because they find value in their interactions. As they spend time together, they typically share information, insight, and advice. They help each other solve problems. They discuss their situations, their aspirations, and their needs. They ponder common issues, explore ideas, and act as sounding boards. They may create tools, standards, generic designs, manuals, and other documents – or they may simply develop a tacit understanding that they share. However they accumulate knowledge, they become informally bound by the value that they find in learning together.”

Tomorrow: Something Different

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TECH TALK: Good Books: Something Different

Finally, as I had promised in the beginning, a few books which have little to do with business and management, but are nevertheless definitely worth spending time on.

A New Kind of Science by Stephen Wolfram is a 1200+ page book which took 10 years to write. Its impact may many more years to fathom – or not. Wolfram’s book builds on his work on cellular automata. His key discovery is many simple programs can produce great complexity. As he writes, “Traditional intuition suggests that to do more sophisticated computations would always require more sophisticated underlying rules. But what launched the whole computer revolution is the remarkable fact that universal systems with fixed underlying rules can be built than can in effect perform any computation.” Wolfram calls his conclusion the Principle of Computational Equivalence. He gives numerous examples, with a fascinating array of pictures and patterns, which cover almost every aspect of the world around us.

If there is one word which describes our world of today, it is Networks. Linked: The New Science of Networks by Albert Laszlo-Barabasi and Nexus: Small Worlds and the Groundbreaking Science of Networks by Mark Buchanan are two books which explore the science of networks, with a focus on many of the recent breakthroughs which have enhanced our understanding of how networks actually work.

Next: two books which take us into the past. Technomanifestos: Visions from the Information Revolutionaries by Adam Brate discusses the various concepts that have shaped modern computing by profiling the people behind them. Brate’s work is a fascination exploration of how thinking and ideas evolved. Among the luminaries whose works have been analysed are Norman Weiner, Vannevar Bush, Alan Turing, John von Neumann, J.C.R. Lickider, Doug Engelbert, Marvin Minsky, Seymour Papert, Alan Kay, Marshall McLuhan, Abbie Hoffman, Ted Nelson, Time Berners-Lee, Richard Stallman, Larry Wall, Eric Raymond, Lawrence Lessig, Eric Drexler, Bill Joy and Jaron Lanier.

Multimedia: From Wagner to Virtual Reality is edited by Randall Packer and Ken Jordan. It complements Brate’s book by providing the original texts of some of the landmark articles in arts and sciences. You will find Vannevar Bush’s 1945 essay “As We May Think” , Tim Berners-Lee’s 1989 proposal which became the foundation of the World Wide Web and Alan Kay’s views on user interface design (1989).

Finally, a book to touch the heart. The Little Prince by Antoine De Saint-Exupery may be a book for children, but its message is for adults. Reading this fable of love and loneliness and seeing its wonderful drawings may just help you to see things differently.

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TECH TALK: Good Books: Good Books

Books have been a great source of inspiration and learning for me. A good book broadens thinking and has something new to teach us. The value of a book can be enhanced if, as we read. we stop and reflect on the points made by the author, and see how they can enrich to our view of the world. Books can help shape how we live in the present and envision the future.

A book may cost Rs 500-1,000 (USD 10-20) to buy but it costs a lot more to read. The knowledge and insights that a good book can provide are worth infinitely more. We need to allocate our time and attention, for which in today's world there are many competitors. To read a book means making room for large chunks of time, which is increasingly harder to do as our life gets compartmentalised into micro-moments.

My best book-reading time has come when I am traveling, especially on long flights. Being strapped to a seat with very limited mobility and with no interruptions (especially from emails and cellphones) helps us forget our world and immerse ourselves into the world the author creates. This is important because to get the most out of a book, we have to let the author take us, quite literally, for a ride.

The Internet has certainly made the process of finding and buying books much easier, irrespective of where you are. Amazon's reviews (especially those from readers) are very helpful. But for me, the best book recommendations still come from people I know - people who have invested the time and effort to read it.

The Internet helps in one more way. It helps you find out more about the author. Because when we read a book, we also get a peek into the author's mind. Seeing how that thinking has evolved in the intervening years - especially in these times of rapid and exceptional change - is always an interesting exercise.

In the coming columns, I will share with me my thoughts on some good books and why I like them. I would also like to hear about your favourite books and why you like them.

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TECH TALK: Good Books: Good Books (Part 2)

The Alchemist by Paulo Coelho
Published in 1988, this magical fable about a shepherd's journey in search of a great treasure talks about "listening to our hearts, learning to read the omens strewn along life's path and above all following our dreams." As I read it, I couldn't help relating many incidents in my life to the book. There are connections between events, a reason why things happen and when they happen. If you like me believe that there is mission why we are all on earth for, and all the various things (good and bad) happen for a reason, this book is definitely for you. Here is an excerpt from what one of the characters in the book says:

[Destiny] is what you have always wanted to accomplish. Everyone, when they are young, knows what their destiny is. At that point in their lives, everything is clear and possible. They are not afraid to dream, and to yearn for everything they would like to see happen to them in their lives. But as time passes, a mysterious force begins to convince them that it will be impossible for them to realize their destinyIt's a force which appears to be negative, but actually shows you how to realize your destiny. It prepares your spirit and your will; because there is one great truth on this planet: whoever you are, whatever it is that you do, when you are really want something, it's because that desire originated in the soul of the universe. It's your mission on earthTo realize one's destiny is a person's only real obligation. And when you want something, the universe conspires in helping you achieve it.

Will and Vision: How Latecomers Grow to Dominate Markets by Gerard Tellis and Peter Golder
The book's premise is counter-intuitive. We have always been led to believe that "the early bird gets the worm", that the first-mover advantage is one of the critical success factors.

This had become all the more so during the early Internet years. The book, through a detailed analysis of various industries and many examples, "debunks the myth of pioneering advantage and reveals the real drivers of enduring market leadership: Vision of the mass market, managerial persistence, relentless innovation, financial commitment, asset leverage" - a combination, as it were, of vision and will. Here's an excerpt on the authors' view on envisioning the mass market:

The mass market is something that marketers tend to shun, especially for mature products. Strategists stress the importance of segmentation and differentiation. [For managers, the mass market] is synonymous with cutthroat competition, low margins, and low profits.

The mass market bears an entirely different perspective for a new product introduced by a visionary. At the time a vision is first formulated, competitors either may not see any market or may focus on a niche.Why focus on the mass market? Such an orientation has three important benefits for a market entrant.

First, reaching out to the mass market requires one to target a price that would appeal to this market. Second, tapping the mass market allows for economies of scale that lead to low unit costs. Third, the large scale of operation that comes with serving the mass market can easily support a big research effect.

The scale and profits from tapping the mass market allow even a late entrant to surpass the technological lead and experience of a pioneer that focuses on a small segment of the market.

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TECH TALK: Good Books: Good Books (Part 3)

The Lord of the Rings by JRR Tolkien
I had read the "book of the century" first in my college days, and re-read it again (as I lay sick in bed). The richness of Tolkien's world and characters is amazingly inspirational. The first part of the book came to life on the big screen recently. But that is in no way a replacement for the book. The 1,000-page tome, which is actually three books, can be very intimidating at first. But as you start reading it, everything comes to life.

Such is Tolkien's detailing that the "Middle-Earth" becomes reality. The joy of the book is that it allows each of us to create our own imaginary world, and get inhabit it with hobbits, wizards, dwarves and orcs. Besides the fantasy element in the book, it is also about how ordinary people can do extraordinary things - whatever the forces that may be ranged against.

A useful companion book (which I found recently) for the geography of the complex world Tolkien has created is "The Atlas of Middle-Earth" by Karen Fonstad. It consists of "hundreds of two-color maps and diagrams [which] survey the journeys of the principal characters day by day."

Good To Great by Jim Collins
The first two sentences in this book by the co-author of "Built to Last" are: "Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great."

Collins spent five years searching for the difference between good and great companies. The answers and, in fact, his theories on what makes the difference, may seem surprising at first. One of his theories is the "Hedgehog Concept". Writes Collins:

Foxes pursue many ends at the same time and see the world in all its complexity. They are "scattered or diffused, moving on many levels", never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. It doesn't matter how complex the world, a hedgehog reduces all challenges and dilemmas to simple - indeed almost simplistic - hedgehog ideas.

A Hedgehog concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles: what can you be the best in the world at (and equally important, what you cannot be the best in the world at), what drives your economic engine, and what you are deeply passionate about.

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TECH TALK: Good Books: Good Books (Part 4)

How to Win Friends and Influence People by Dale Carnegie
Carnegie wrote this book in 1936. I remember this as one of the first books I had ever got - as a prize in school early on in life. I re-read it recently, and was amazed to see how relevant it still is - and how little we seem to live by the principles embodied in the book. This is a book that is worth reading every few months for what is says are eternal truths. The writing style is conversational, and full of little stories. A small excerpt from the first chapter entitled "If you want to gather honey, don't kick over the beehive":

If you and I want to stir up a resentment tomorrow that may rankle across the decades and endure until death, just let us indulge in a little stinging criticism - no matter how certain we are that it is justified.

When dealing with people, let us remember that we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.

Any fool can criticize, condemn and complain - and most fools do.

But it takes character and self-control to be understanding and forgiving.

Made in America by Sam Walton with John Huey
Walmart recently became the world's largest company. Its sales in 2001 were USD 220 billion, and the company is growing by about 15% every year. The story becomes all the more remarkable when you learn that the first Walmart opened only 40 years ago. Who better to tell the story than its founder, Sam Walton, himself. Even though the book itself is 10 years old, it makes great reading, especially for entrepreneurs. Here's a small excerpt from the book's foreword:

If I had to single out one element in my life that has made a difference for me, it would be a passion to compete. That passion has pretty much kept me on the go, looking ahead to the next store visit, or the next store opening, or the next merchandising item I personally wanted to promote out in those stores.

As I look back, I realize that ours is a story about the kind of traditional principles that made America great in the first place. It is a story about entrepreneurship, and risk, and hard work, and knowing where you want to go and being willing to do what it takes to get there. It's a story about believing in your idea even maybe when some other folks don't, and about sticking to your guns. But I think more than anything it proves that there's absolutely no limit to what plain, ordinary working people can accomplish if they're given the opportunity and encouragement and the incentive to do their best.

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TECH TALK: Good Books: Good Books (Part 5)

The Lexus and the Olive Tree by Thomas Friedman
Written by the Pulitzer Prize-winning foreign affairs columnist of The New York Times, this book (published first in 1999) is about Globalization. Friedman provides a framework to think about what's happening in the world around us, bridging the worlds of geography, politics, technology, economics and trade. The Great Game of today is indeed Globalization: no country or economy can afford to be isolated. The three democratizations - of technology, finance and information - are integrating the world ever more closely. And as this happens, there are tensions and conflicts between the "lexus" (the modernizing force of globalization) and the "olive tree" (the ancient forces of culture, tradition and community). Friedman brings it all to life with his wonderful collection of stories from around the world. Here is how he defines globalization:

It is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before - in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach individuals, corporations and nation-states farther, faster, deeper and cheaper than ever before. This process of globalization is also producing a powerful backlash from those brutalized or left behind by this new system.

The driving idea behind globalization is free-market capitalism - the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be.

The China Dream by Joe Studwell
Subtitled "The Quest for the Last Great Untapped Market on Earth", this book by Studwell (who lived in China from 1990-2000, and wrote for The Economist) provides excellent insights into the Chinese market. China attracted USD 300 billion foreign direct investment in the 1990s, and continues to do so at the rate of nearly USD 50 billion a year. As companies rush into China to outsource low-tech and high-tech manufacturing and eye its domestic market of 1.4 billion people, Studwell has a cautionary note. The book argues that "the economic foundations of contemporary China have been laid on sand and constructed from the hubris that drove the Soviet Union in the 1950s. Among investors, expectations and reality are grossly out of kilter. At the rational, reductive level at which economists operate, it is a recipe for suffering and disaster. And yet, at the less rational level at which real life operates, one can never be certain of betting against the enduring power that is the China dream."

Only time will tell how right (or wrong) Studwell is. From an Indian viewpoint, China is a threat and an opportunity. I believe that Indian companies have to look at China as an opportunity. This book helps in deepening an understanding of China and how it works.

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TECH TALK: Three Good Books: Three Good Books

The Unfinished Revolution

"The Unfinished Revolution: Human-Centered Computers and What They Can Do for Us" by Michael L. Dertouzos is a fascinating account of what needs to be done so that technology can help us "do more by doing less." Dertouzos covers five human-centric forces: speech understanding (natural interaction), automation, individualized information access, collaboration and customization. He relates it to some of the work going on at MIT, especially Project Oxygen, to provide glimpses of how tomorrow will better in terms of usability of technology. An extract from the book's description:

If our cars were as difficult to drive as our computers are to operate, they would never leave the garage. Yet everyday we put up with infuriating complications and incomprehensible error messages that spew forth from our technology: software upgrades crash our machines, Web sites take forever to download, e-mail overwhelms us. We spend endless time on the phone waiting for automated assistance.

In effect, we continue to serve our machines' lowly needs, instead of insisting that they serve us -- a situation that will only get worse as millions of new mobile devices arrive on the scene.

Our world doesn't have to be this way. It shouldn't be this way.

Wouldn't it be great if using your computer was as effortless as steering your car? In The Unfinished Revolution, Michael Dertouzos introduces human-centered computing a radical change in the way we fashion and use computer systems that will ultimately make this goal possible.

e-Business 2.0: Roadmap for Success

This book by Ravi Kalakota and Marcia Robinson a recipe for leveraging the Internet and technology into businesses. It provides insights into how technology can make a difference in interactions with employees, customers and suppliers. An extract from the book's description:

Why are some companies relentlessly successful at e-commerce while others flounder? What are the successful businesses doing differently to solve customer problems or pain? How are successful companies, both old and new, moving from traditional applications to the new breed of integrated, e-business application architectures? Through detailed case studies and analysis, this book examines the e-business blueprint, offering step-by-step guidance in choosing and implementing the right application strategies to survive the e-commerce onslaught and to succeed. The thesis of the book is that durable application frameworks can guide you through the e-business chaos. Business models change. Technology changes. But application infrastructure design principles endure.

The Power of Now

"The Power of Now: How Winning Companies Sense and Respond to Change Using Real-Time Technology" by Vivek Ranadive is about becoming an event-driven company. Ranadive, CEO of Tibco, discusses how technologies like publish-subscribe can help managers focus on exceptions and make quicker decisions. In a world awash with information, it is important for enterprises to leverage it appropriately and more importantly, make the right information available at the right time to the right users within the company.

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