When Lou Gerstner first arrived at IBM as CEO in 1993, he brought a gripe with him from his time running American Express, one of Big Blue’s largest customers. As he wrote in his memoir, Who Says Elephants Can’t Dance?, it became central to his transformation of the company.
What had happened was that an IBM executive had called one of his division managers and threatened to withdraw support from a major processing center. The reason? The division had installed a single computer from a competitor. Gerstner had been flabbergasted and vowed to change things when he got tot IBM.
Jeremy England, a rising star in the world of physics, has made quite a stir with his ideas about the meaning of life. In a nutshell, England argues that while disorder in the universe tends to increase over time, living things harness energy around them to create order from randomness.
Or, more accurately, he argues that life is the universe’s way to dissipate energy more efficiently, meaning that what we see as order is really just nature’s way of spreading disorder more broadly. It’s an intriguing theory, implying that life is not a cosmic historical accident, but the inevitable consequence of physics.
It is also the exact opposite of how we tend to see things. We assume that the energy we employ to create order as constructive or “putting things aright,” when actually we are setting the stage for more disorder. In other words, most people look at an ordered system as the natural way things should be. That’s what opens up opportunities for successful disruption.
In 1904, the great sociologist Max Weber visited the United States. As Moises Naim describes in The End of Power, traveling around the vast country for three months, he believed that it represented “the last time in the long-lasting history of mankind that so favorable conditions for a free and grand development will exist.”
Yet while Weber saw vast potential and boundless opportunities, he also noticed problems. The massive productive capacity that the industrial revolution had brought about was spinning out of control. Weber saw that traditional and charismatic leadership would have to give way to a more bureaucratic and rational model.
Most of today’s organizations were built on Weber’s principles. So much so that we see them as “the way things work” and forget that bureaucracies were once innovations too. Today, we live in a time of transformation every bit as colossal as what Weber saw a century ago: a shift from hierarchical to networked organizations. Here’s what you need to know.
In his quest to join his father and his brother in the presidency, Jeb Bush recently pledged to produce 4% GDP growth if he is elected. Many economists have questioned his claims, but the bigger question is whether GDP growth is a good measure of our national well being. Chances are that it is not.
To understand why, think about what happens when you dry your clothes on a clothesline instead of in a dryer. Because you are neither consuming energy nor making use of the nation’s factories, you are failing to contribute to GDP. Nevertheless, you still get dry clothes.
That, in a nutshell, is the clothesline paradox and it is far more pervasive than you might think. In so many areas we now produce less and get more, which improves our lives, but diminishes GDP. That doesn’t mean we should abandon basic economics, but it does mean we should take a more expansive view. Progress can’t be reduced down to a single number.
I love TV. Unlike most people, who see it as a distraction, I consider watching TV critical to maintaining my productivity by providing me with crucial downtime (and the new book, How We Learn, by NY Times science writer Benedict Carey provides some evidence for that). TV is something I simply wouldn’t want to live without.
Still, a little over a month ago I cut the cable and haven’t looked back. I estimate that I’ll save $500-$600 per year without sacrificing much, if anything, in the way of programming. It’s also surprisingly easy. If you can set up a DVD player, you can go cable free without undue effort.
As I pointed out in a previous article, there is no real reason we need a cable box anymore. Programming, bundling and other functions that a cable box performs can now be done more efficiently in the cloud. So, as the cable business model begins to unravel, options for going cable free are expanding. Here’s how you can cut the cable and never look back too.
In 1929, just before the stock market crash, Louis Bamberger and his sister, Caroline Bamberger Fuld, sold their department store in Newark to R.H. Macy and Company for $25 million ( $343 million in 2015 dollars). Grateful to the people of Newark for their support, they planned to endow a medical college in that city.
Yet when they approached Abraham Flexner, the foremost authority on higher education at the time, he told them that there was little point in building a medical school just across the river from Manhattan, where there was no shortage of medical talent. Instead, he asked the Bambergers to be more ambitious.
What he had in mind was a place unlike any the world had ever seen, the Institute for Advanced Study. It was to be an academic institution without classrooms or laboratories, but would host great minds in an idyllic setting where their genius could roam free. As it turned out, it was an idea that would have enormous impact on America and the world.
The great philosopher Ludwig Wittgenstein argued that, unless you can express an idea clearly, you don’t really understand it yourself. His point was knowledge only has value if it’s explicit. We may act on vague notions and gut impulses, but that doesn’t mean we’re really thinking things through.
Fareed Zakaria seems to agree. As he noted in a recent article, “Thinking and writing are inextricably intertwined. When I begin to write, I realize that my ‘thoughts’ are usually a jumble of half-baked, incoherent impulses strung together with gaping logical holes between them”.
“Whether you’re a novelist, a businessman, a marketing consultant or a historian,” he continues, “writing forces you to make choices and it brings clarity and order to your ideas.” Zakaria also points to Jeff Bezos’ emphasis on memo writing as an example of how clarity of expression leads to innovation. Here are four simple rules that will help you write better.
In a classic Harvard Business Review article, Abraham Zaleznick contrasted two very different styles of authority. Managers he argued, take a rational approach and seek order and control. Leaders, on the other hand, are more emotionally driven and seek to drive change.
Every organization needs both. Managers provide the continuity needed to execute efficiently and leaders drive the kinetic energy needed to respond dynamically to the needs of the marketplace. The best CEOs, like Steve Jobs and A.G. Lafley, are both great managers and great leaders.
These days, however, crucial resources and capabilities often lay outside of an organization. That means that, to compete effectively, enterprises need to leverage platforms in order to access ecosystems, so the ability to manage operations and the capacity to inspire employees only goes so far. Today, we must learn how to shape networks around a shared purpose.
In The Innovator’s Solution, Harvard Professor Clayton Christensen argued that, during the early stages of an industry, firms with wholly proprietary products have the advantage. New technology is always glitchy, so engineering the entire architecture is the best way to ensure quality.
However, as an industry matures and the technology becomes better understood, it inevitably becomes more modular, with different firms specializing in different parts of the value chain. That’s when the true potential of a technology is unlocked, empowering an entirely new era of value creation.
The computer industry is a good example of Christensen’s model at work. Before the PC, computers were proprietary systems. Yet when the basic architecture became universal, an amazing amount of innovation was unleashed. IBM’s recent news of its commitment to the open source Apache Spark community, marks just such a point in the evolution of data.
Arthur C. Clark insisted that any sufficiently advanced technology is indistinguishable from magic. Yet most of us have to live in a world of practicalities. Growing up means that fantasies must give way to realities. We learn to favor probabilities over possibilities.
In other words, we learn to be reasonable. Yet as George Bernard Shaw pointed out, “The reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”
The modern world is one of the visceral abstract, in which unlikely ideas lead to important breakthroughs and seemingly useless things can become useful indeed. It is, as Marie Curie put it, not the practical men, but the dreamers who create new paradigms. While hard facts define today, new value is created only when the impossible becomes possible.