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 centur