Saturday, March 31, 2007

A dip in the Panama Canal offers little relief

Books like Confessions of an Economic Hit Man and A Game as Old As Empire (both from Berrett-Koehler) offer a view of the actions and motives of our nation's companies and government that is at such odds with values and ideals that we profess that some part of me refuses to believe them. I don't know why I have a hard time swallowing these unpalatable versions of reality. I grew up with the Kennedy and King assassinations and Vietnam and Nixon. I shouldn't have any illusions and yet, I find myself looking for an out, looking for anyone I can trust who can "say it ain't so."

Anyway, that's why I was interested in reading "What Roosevelt Took," a fascinating working paper by Harvard Business School's Noel Maurer and Carlos Yu. (Read it here.) Maurer and Yu analyzed the economic benefits derived from building and operating the Panama Canal between 1903 and 1937. Who benefited most? The US, they say. And Panama? Panama was shortchanged on the purchase price and overtly excluded from participating in the construction of the Canal; it received almost no benefit whatsoever. In fact, the only significant benefit it received accrued from the campaign against disease, which was undertaken to preserve the health of the non-Panamanian canal workers, not the citizens.

Maurer and Yu's conclusion:

Panama’s experience with the Canal, therefore, holds warnings for modern underdeveloped countries that seek to rapidly develop through the construction of large infrastructure projects, be they pipelines (as in Central Asia and Africa) or “land bridges” (as in Central America). The spillovers from such projects may prove disappointing. Nor is it clear that greater international oversight is an efficient way to insure greater local benefits from such projects...Panama eventually developed the human and institutional capital needed to benefit from the presence of the Canal on its soil, but it was a slow process that took almost a century, and required multiple costly interventions by the United States. It is not clear how long it will take Bolivia, Chad, or Uzbekistan to do the same.
Which, by the way, sounds a lot like a polite way of saying exactly the same thing as the writers of the books mentioned above.

Wednesday, March 28, 2007

One question: Timothy Butler

I didn't have a clue what I wanted to be when I was a kid. I didn't do much better as a so-called adult, stumbling around careerwise until my mid-30s. The only saving grace was that I was pretty willing to jump off whatever ship I was on and start swimming in another direction whenever wherever I was heading didn't seem fulfilling. And eventually, I got lucky and discovered that writing was right for me.

I could have saved myself a lot of grief and time if I could have read Getting Unstuck: How Dead Ends Become New Paths by Timothy Butler like 30 years in advance of publication. Butler, a Senior Fellow and Director of Career Development Programs at Harvard Business School, has created the best hands-on guide I've seen to dealing with impasse -- that experience of coming to a dead end in your career or life.

It was actually a relief for me to learn that impasse was such a common experience. But because I've always tended to jump ship when I find myself in that position, I've often wondered if I was making a mistake, that if I had stayed the course I might have achieved some greater success. So, I asked Butler, "How do you tell the difference between an impasse that requires a new path and a bottleneck in a path that you should stay on?" Here's his response:

"Very interesting question. Bottlenecks can be approached and worked-through using the problem solving methods that are currently in our repertoire. When we label something a 'bottleneck' we are implicitly recognizing it as a more or less predictable disruption within the model that we are using to understand our work situation. At times of impasse, there is no recognition. We do not understand what is happening around us. Impasse arrives as a sense that we are not making full sense of our situation. It often arrives first as feelings of frustration, indifference, or self-doubt. What we do not know yet is that we are encountering more than our model, of a work or life situation, can explain. It is then that we can begin the work of the impasse-to-vision cycle."

Tuesday, March 27, 2007

What a racket!

Publishers Weekly reported this nugget yesterday:

In a deal inspired by current bestseller and Oprah phenomenon The Secret, Thomas Dunne has announced that his imprint at St. Martin’s will publish Karen Kelly’s The Secret of the Secret in August. This will be a wide-ranging analysis of Rhonda Byrne’s book; Madeleine Morel at 2M Communications sold world rights.

Kelly, a former editor at Warner Books who has also worked as a ghostwriter, will talk to media and publishing professionals, scientists, psychologists and philosophy experts to help explain the success of The Secret and whether its message, on the power of positive thinking, really works. Kelly will also reveal The Secret’s scientific and religious influences and investigate the lives of eminent figures like Shakespeare, Einstein and Plato to see if these men did, as Byrne claims, all share The Secret.

Do you want to know the real secret? The Secret is rehashed self-help that has been expertly marketed (check out the website) and The Secret of the Secret is based on a time-honored publishing stratagem: you can make easy bucks by glomming onto the success of another book.

The really real secret is you've gotta be crazy to buy either of these books. Did you read the Newsweek article on Rhonda Byrne and the book? Her advice apparently includes this gem: "If you see people who are overweight, do not observe them, but immediately switch your mind to the picture of you in your perfect body and feel it." I, for one, will never again gaze upon any book that isn't a Oprah pick. Instead, I look away and envision my very own bestseller.

Monday, March 26, 2007

Flattery will get you nowhere

A decade ago, Lynda Obst, the Hollywood producer, wrote a forgettable book with an unforgettable title -- Hello, He Lied -- which pretty much sums up my initial state of mind whenever I'm accosted by retail sales clerks. They invariably say one or both of the things that make me grind my teeth: "That's really popular right now" or "That really looks great on you." I'd really rather be ignored.

Happily, it turns out that nobody believes this blather, according to Kelley Main, Darren Dahl, and Peter Darke, a trio of Canadian marketing professors. They conducted a set of experiments using a sunglasses kiosk in which the sales clerks flattered shoppers either during the sale, after the sale, or not at all. Then, they asked the shoppers to rate the trustworthiness of the clerks. Guess what? Flattery, whether it comes during or after the sale, lowers the shopper's perception of the clerk's trustworthiness. In fact, it automatically (that is, without conscious reflection) makes them suspicious.

The professors' results and conclusions were just published under the title "Deliberative and Automatic Bases of Suspicion: Empirical Evidence of the Sinister Attribution Error" in the Journal of Consumer Psychology. They could have used Obst's help there.

Sunday, March 25, 2007

The mark of a good agent

I promised a post on how to identify a good business book agent a while back and have been avoiding it ever since. But, it's Sunday afternoon and I finished an article early, so here goes.

  1. A good bizbook agent doesn't charge a fee to consider taking you on as a client. I think good agents can take a quick look at your book proposal and your resume and decide if you are worth their time. If you want more than a 'yea' or 'nay,' however, they have every right to charge you for their professional opinions or to read and comment on a manuscript or any of the other stuff that writers seem to expect for free.
  2. A good bizbook agent doesn't make you sign away your life in return for representation. A writer's output is his or her income flow. Don't ever give an agent or anyone else control over that flow thru options on your next work or any other contract clause.
  3. Once you're signed up, a good bizbook agent tears you up. Unless you're great, a good agent should be able to offer suggestions for fine-tuning your work. You should challenge those suggestions to be sure they make sense, but you should also take them seriously.
  4. A good bizbook agent sticks it out. Ask agents about their process. If they dangle proposals in front of the usual suspects once and if nobody bites, forget about the proposal, forget about them. Publishers reject and accept books for all sorts of nutty reasons that have nothing to do with the books. I had one proposal that was rejected and later, accepted by the same editor! Good agents know that the market and the players are always changing and they are always looking for the right opening -- even if it's a year down the road.
  5. A good bizbook agent is honest about the offers you get. Many, maybe most, offers from publishers are lousy offers. If you find your agent is saying every offer is great, call him on it or get a new agent.
  6. A good bizbook agent reads your contract, makes sure you don't sign anything that is not in your best interest, and is willing to negotiate with publishers as long as it takes. Your demands have to be reasonable, but if they are, your agent shouldn't be the one shutting you down. By the way, the only way you'll know whether agent is shutting you down is if you learn what should and shouldn't be in contracts, refuse to sign anything that is not in your best interest, and are willing to negotiate with publishers as long as it takes.
  7. Finally, a good bizbook agent knows that it's far better for you to let off steam with him as opposed to your publisher. So, he lets you curse and yell all you want and never holds it against you. (Thanks for that, John.)

Saturday, March 24, 2007

Nazi Germany, thru an economic lens

Eight hundred-page books tend to threaten the already teetering structural integrity of my tower o' reading, so I try to avoid piling them on. But I have to make an exception for University of Cambridge prof Adam Tooze's economic history of Nazi Germany, The Wages of Destruction, released last year in the UK and just now in the US by Viking.

According to everything I've read, the book has broken new ground in our understanding of WWII by tracking the economic forces that both supported Hitler's rationale for war and guaranteed the defeat of Nazi Germany. It has been getting good reviews, too (in the Financial Times here and in the NY Sun here).

Tooze's analysis of Hitler's perceptions of the US suggests that the war was inevitable long before the first bullet was fired. He finds that the rising industrial might of the US led Hitler to believe that Germany must carve out its own empire in order to survive, that the Great Depression's impact on the US offered what seemed like the best opportunity to establish that empire, and that our leadership was inextricably linked to that figment of Hitler's diseased imagination -- the "worldwide Jewish conspiracy." Thus, Tooze concludes, "For Hitler, a war of conquest was not one policy option amongst others. Either the German race struggled for Lebensraum [living space] or its racial enemies would condemn it to extinction."

Thursday, March 22, 2007

Gardner on your mind

I'm a fan of Howard Gardner, the Harvard psychologist whose theory of multiple intelligences won him a MacArthur genius grant and created serious doubts about the efficacy of standard IQ tests. I particularly liked his 2004 book, Changing Minds: The Art and Science of Changing Our Own and People's Minds, a thoughtful, authoritative read that offers a model and lots of insight into the mind-changing process without hype or oversimplification. None of that "how to get anyone to do anything you want in 5 seconds" baloney -- a fact that many reviewers complained about! (You can hear Gardner talking about the book on NPR's Talk of the Nation here.)

Gardner's new book from Harvard Business School Press, Five Minds For the Future, just arrived. In it, Gardner describes five uses of the mind that people, especially leaders and teachers, should cultivate if they wish to be successful in tomorrow's world. He calls these uses the Disciplinary Mind, the Synthesizing Mind, the Creating Mind, the Respectful Mind, and the Ethical Mind.

Why are these particular minds important? Gardner writes:

"Individuals without one or more disciplines will not be able to succeed at any demanding workplace and will be restricted to menial tasks.

Individuals without synthesizing capabilities will be overwhelmed by information and unable to make judicious decisions about personal or professional matters.

Individuals without creating capacities will be replaced by computers and will drive away those who have the creative spark.

Individuals without respect will not be worthy of respect by others and will poison the workplace and the commons.

Individuals without ethics will yield a world devoid of decent workers and responsible citizens: none of us will want to live on that desolate planet."

Wednesday, March 21, 2007

Puzzle pieces

If you've wondered about the origin of the sudoku puzzles that have sprouted like weeds in newspapers and magazines everywhere, check out today's NYT article on Maki Kaji, the father of sudoku and founder of what could end up becoming the next global publishing empire, Nikoli. I was intrigued to read that Nikoli was built on an open source basis; the people who buy its puzzles also refine them and design new ones. By the way, Kaji's US literary agent is none other than my own, superagent John Willig. Hmmm, wonder which one of us generates more commissions?

Speaking of puzzles, the pieces seem to be falling into place over at Portfolio, the massively-hyped new Conde Nast business magazine. According to a post over at Talking Biz News, the first issue, which will stand alone until the presses start running full time about four months from now, supposedly contains a bunch of 5,000 word articles, as well as a 25,000 word piece on hedge funds by New Journalism pioneer Tom Wolfe. For more on the ambitious new magazine, which hopes to expand the genre and broaden the audience, check out Paul Farhi's article in American Journalism Review.

Tuesday, March 20, 2007

Nice Pando

I signed up for an account at Pando yesterday and in minutes, was set up to send a couple of 30-40 MB audio files recorded during a recent meeting to Sharon Lee Harkey at Purple Shark Transcriptions. Pando offers upgraded services for a price, but the stripped-down free account will handle files up to 1 GB, which is fine for my needs right now.

It's a great service. You download their software, which enables you to upload any file you want to share to their servers and send notification emails with a link to whoever you want to download them. It worked right the first time out and I didn't even have to read the FAQs to figure it out.

Pando competes with a few other similar services, but to be honest, I can't figure out why the niche exists at all. I get all this bandwidth from my cable internet provider, but for some reason, still can't send files bigger than a handful of MBs via email. Why is that anyway?

Sunday, March 18, 2007

What apologies?

Friday afternoon was not a good time to be in the Cleveland airport and heading east. The NY flights were all cancelled. But I got lucky, the really bad weather didn't extend down to Richmond.

The 20-minute delay caused when our plane was late from Indianapolis didn't bother me at all. We made it onto the plane and thru de-icing and then, the hydraulics that control the right side of the plane failed. Back to the terminal, where the mechanics were supposed to fix us up. Then, we got de-planed (it was a cold on Cleveland's tarmac), sent back thru the terminal to another gate to catch another plane. Got there, no plane, sent back where we came from. A plane finally did arrive and we left three hours late.

That's actually not too bad compared to what the New Yorkers went thru. But then I saw this NYT article, which focuses mainly on Southwest Airlines, about how all the airlines are suddenly big on apologies. Well, Continental is not one of them. We got a few perfunctory 'sorrys' here and there (sorry, but your plane just laid down and died) but that's about it. The flight attendant who sent us up and down the terminal in pursuit of a new plane never mentioned it. So I guess the real apology is in the mail?

Thursday, March 15, 2007

The ties that bind

Ran across a Newswise press release from the University of Washington Business School about an interesting concept called job embeddedness. A little searching revealed that the idea first emerged in 2001 in a paper titled "Why People Stay: Using Job Embeddedness to Predict Voluntary Turnover," written by an academic team headed by UW management and organization professor Terrence Mitchell.

The paper offered a new model, based on research and two samples, suggesting that the traditional wisdom that job satisfaction and money entice people stay at jobs was a less-than-complete picture. In fact, Mitchell and team found that job satisfaction plays a relatively small role in employee decisions to stay.

Instead, they discovered that people become enmeshed in their jobs thru a web of forces the team named "job embeddedness." They also found that the degree of job embeddedness that an employee perceives is determined by three dimensions: link, the extent to which the employee feels linked to other people and activities on the job; fit, the extent to which their job is a good fit with other aspects of their lives; and sacrifice, the amount of change leaving a job would entail.

Since 2001, there appears to be a growing number of academics conducting research in this area and surely, given the talent shortages everyone is predicting for the near future, HR pros and other organizational execs will want to know how they can utilize job embeddedness to keep good people...and I'm wondering why there haven't been any books on the topic.

Wednesday, March 14, 2007

A look at nation-building

The Rand Corp., the Santa Monica-headquartered think tank, publishes some amazing stuff, such as this recent and fascinating report titled The Beginner's Guide to Nation-Building (free dl here), which is based on the study of major US and UN interventions since WWII. Nation-building, in case you haven't heard, is what powerful countries and/or international coalitions do when the actions of less-powerful countries become intolerable. The goal of nation-building, according to the authors of this report, "is to leave behind a society likely to remain at peace with itself and its neighbors once external security forces are removed and full sovereignty is restored."

The report offers several conclusions that give pause. It says, for instance, that democratization and economic development are less important in the establishment of peace than security and further states: "Establishing a modicum of security requires a military force that is large enough – as many as 20 soldiers per thousand inhabitants – to disarm, demobilize, and reintegrate former combatants." Iraq, by the way, had a population of about 26.7 million in mid-2006, which means a military force of 500,000 men and women. (There are about 150,000 coalition troops there now and maybe that many again in Iraq's armed forces?) The 300-odd page report also says that:

"[F]ull-scale peace enforcement actions are feasible only when the intervening authorities care a great deal about the outcome, and even then, only in relatively small societies. Thus, the effort needed to stabilize Bosnia and Kosovo has proved difficult to replicate in Afghanistan or Iraq, nations that are eight to 12 times more populous. It would be even more difficult to mount a peace enforcement mission in Iran, which is three times more populous than Iraq, and nearly impossible to do so in Pakistan, which is three times again more populous than Iran."
Hope the head nation-builders read these things.

Tuesday, March 13, 2007

Stickiness in action

As I was reading Chip and Dan Heath's book, Made to Stick, I happened onto a great example of what they call 'stickiness.' According to the brothers, stickiness, a concept they borrowed from Malcolm Gladwell, is what makes communication attention-grabbing and memorable. They write:

By "stick," we mean that your ideas are understood and remembered, and have a lasting impact -- they change your audience's opinions or behavior.
I happened to see stickiness in action during a 2-hour walk through New Quarter Park with Dr. Gerald Johnson, a retired William and Mary geology professor. I was surprised to find about 50 people waiting for this guided tour of the park's geology -- often these things are deadly boring and sparsely attended. But here were twice the maximum number of people expected by the park's staff and it didn't take long to figure out why.

Johnson is a great teacher. He's animated, clearly loves his topic and an audience, and is a master of communication. Within seconds of being introduced, he was moving thru us, choosing individuals to finish his sentences for him to ensure we were listening. Before we set off, he posed a problem that he promised we'd be asked to solve at the end of the walk. We kept our eyes out for clues the entire walk.

When Johnson introduced a scientific term, he paired it with a mnemonic device, such as when he startled us by breaking into song, "Gonna take a sedimentary journey." He had the group vote on whether the soil is deeper in the forests or the plains. We chose the forests. He said, "This is why we don't vote in science."

I learned more about geology on this 2-hour walk than I learned in a semester at college and I think I might even remember a good part of it. For sure, I'll be looking out for anything that Johnson is doing in the future.

Monday, March 12, 2007

Another childhood hero bites the dust

As a kid, I loved biographies and, though I don't remember why exactly, one of my favorite subjects was Thomas Alva Edison. Maybe it was that Edison was a real-life version of the quintessential Horatio Alger character, you know, the poor kid whose creativity and hard work leads to larger-than-life entrepreneurial success. Maybe it was the Jersey connection or that he was a lowly paper boy, too.

Of course, I've become disillusioned with many of my heroes from those days. (It turns out that biographies written for children forty-odd years ago were not always entirely forthcoming about character flaws.) I figured that Edison had plenty of flaws -- after all, this is the guy who enjoyed hanging out down in Fort Myers during the winter months with Henry Ford, a brilliant entrepreneur with plenty of loose screws. But, I had managed to maintain my lopsided image of Edison...until now.

On Sunday, The New York Times ran an article adapted from Randall Stross's new bio of Thomas Edison, The Wizard of Menlo Park, which manages to suggest in a few short pages that Edison's reputation as an inventor is overblown, he was a less-than-savvy CEO with an outsized talent for self-aggrandizement, and his work/life balance was seriously skewed. (Stross, by the way, is a professor in the Organization & Management Department at San Jose State, a historian, and a NYT columnist. He's also written several good books about instrumental players in today's high-tech arena.) I've added the new bio to my tower o' reading, but it already seems clear that another childhood hero is going to bite the dust.

Friday, March 9, 2007

One question: Richard C. Cook

I heard Rick Cook, author of the new book, Challenger Revealed (Thunder's Mouth Press), speak at the Williamsburg Library last Friday. I've read and even written a little about the 1986 Challenger disaster and knew that it was caused by a failure of management as much as a failure of o-rings. But Rick lived it and lived with it for the past 20 years. Now, he has also written the definitive book, which PW called a "gripping true-life thriller" no less, on the tragedy.

Rick was NASA's lead resource analyst for the shuttle's solid rocket boosters and six months before the launch, wrote the first memo warning NASA's top management of the dangers inherent in the huge o-rings that helped seal the joints between the booster sections. In the aftermath of the disaster, he re-reported this information to NASA and the Rogers Commission. When it appeared that a cover-up was in progress, Rick took his files to the New York Times. His action paved the way for Morton Thiokol's engineers to step forward with the story of the managerial pressure to approve the ill-fated launch they experienced.

In his talk at the library (Rick grew up in Williamsburg and his mom was in the audience), Rick argued that the Challenger disaster was not an accident. He says the risks were known and preventable, that the decision to launch made by NASA's management was driven by political considerations and flew in the face of known facts. That led me to ask him: Given that internal and external 'political' pressures apply to every important organizational decision, what can executives in corporations and other organizations do to avoid making the same type of error that resulted in the deaths of the Challenger's seven crew members?"

Here is his very generous and insightful response:

This is a very good question, so I have put together the following "Sixteen Lessons from the Challenger Disaster." These would seem to apply to many organizational situations, as well as to events in the news today.

Lesson One: ASSURE ADEQUATE RESOURCES. The space shuttle was chronically underfunded, both while it was being developed and later, after it began to fly, when hardware glitches should have been repaired.

Lesson Two: DESIGN IT RIGHT IN THE FIRST PLACE. NASA knew of design flaws in the solid rocket booster joints which doomed Challenger years before the shuttle ever flew. Once a flawed design is engineered into a product, it is much more difficult to change than if it is caught early-on.

Lesson Three: DON'T OVERREACH. The shuttle was supposed to fly like a scheduled airline to serve every conceivable launch need, including scientific, military, and commercial. This resulted in design compromises and excessive launch schedule pressures.

Lesson Four: TEST, TEST, TEST. The shuttle testing program was "hardware starved." The solid rocket boosters were never tested under the full range of anticipated operating conditions.

Lesson Five: INVOLVE THE USERS. NASA concealed the severity of the problems with the O-rings in the joint seals, and the degree of concern the experts had that they could fail, from the astronauts whose lives were at stake.

Lesson Six: LISTEN TO THE EXPERTS. At various stages, engineers who warned of possible disaster were ignored, told not to put it in writing, passed by for promotion, denied adequate resource support, or overruled.

Lesson Seven: STOP AND FIX IT. NASA knew years earlier that the O-ring joint wasn't working properly, and they knew for over a year that the joint was susceptible to failure in cold weather. They had designed a repair, but planned to "fly as is" for two more years while the change was being implemented.

Lesson Eight: DON'T CUT CORNERS: Largely due to cost considerations, the shuttle never had a crew escape mechanism. The Challenger crew cabin emerged from the fireball intact, and the crew might have survived if a parachute/flotation system had been in place.

Lesson Nine: BE AWARE OF WHAT CAN GO WRONG: There are many ways a complex system can fail. Conscientious management seeks out potential problems rather than assuming, hoping, or praying that everything will work as it is supposed to. NASA had cut back on its safety system even before the shuttle was declared operational.

Lesson Ten: HAVE SOME HUMILITY. It would seem to make sense that if the leading experts say not to do something and you go ahead and do it anyway, bad things could happen. What makes you think that the laws of nature don't apply to you?

Lesson Eleven: THE REWARD SYSTEM SHOULD PROMOTE, NOT DETRACT, FROM QUALITY. NASA's authoritarian culture and a reward system that emphasized "flexibility" tended to promote those who went along with the party line, rather than the ones who raised issues and insisted on substantive answers.

Lesson Twelve: TELL THE TRUTH. Deceit about the dangers of the space shuttle ran like a thread through the history of the program and the investigations which followed the disaster. The disaster was blamed on flawed "communications," when it was often a matter of simple honesty.

Lesson Thirteen: BE ABLE TO SAY "NO." The Thiokol engineers had the courage to recommend against the launch of Challenger because the O-ring joints could fail in cold temperatures. Their managers overruled them and approved of the launch following pressure from NASA officials who themselves had been pressured. Too many people caved in.

Lesson Fourteen: VALUE HUMAN LIFE. Negligence involving human life and safety is a crime. One of the astronauts' widows said that NASA showed "shockingly sparse concerns for human life."

Lesson Fifteen: TELL THE POLITICIANS TO BACK OFF. From members of Congress who wanted to ride on the shuttle, to an acting administrator eager to please, to White House figures who wanted the shuttle in orbit in time for the president's state of the union speech, the space shuttle program was suffocated by politicians who wanted attention.

Lesson Sixteen: SAY YOU'RE SORRY. After the Challenger disaster, a multi-layered cover-up was kindled to protect the management brass and the politicians. Due to the whistleblowers, some of the details became known, but it would have been much better if those in charge had simply admitted they were wrong.

If executives, managers, and employees observe these sixteen lessons, they will have a much better chance of dealing with political pressures when crunch time comes. [Copyright 2007 by Richard C. Cook]

Richard C. Cook is the author of Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by Publisher's Weekly, "easily the most informative and important book on the disaster." He worked in the Carter White House and NASA before spending 21 years as an analyst with the US Treasury Department. He is now a writer and consultant on public policy issues and is working on a book on economic and monetary reform. Visit his website at:

Thursday, March 8, 2007

What's in it for you?

I'm reading the advance proof of Annette Simmons' forthcoming book from Amacom, Whoever Tells The Best Story Wins, for Harvard Management Update and came across this passage that sales professionals might want to mull over:

Experimental economics reveals via simulations, such as investment games and public good games, that fairness and reciprocity often matter more than utility. If an offer feels exploitative people prefer to take nothing and will even pay their own money to punish a "free rider." It's very human to abhor a user.

This doesn't mean that the benefits of a product or idea are not important to a prospective buyer, it just means that we need to pay attention to the sequencing of our message. I was taught in Marketing and Sales 101 that answering the WIIFM -- "What's In It For Me?" -- should be first. And yes, people certainly need to know what is in it for them. However, I've noticed, and you may have also noticed, that people don't relax and listen to what is in it for them until they are satisfied they know what's in it for YOU.

No one wants to feel conned. Big promises of great benefit naturally raise the question: What's in it for you? Turning a profit is fair enough. If everyone at the table is there to make money, and the distribution seems fair, then they are ready to listen to what comes next. However, if your prospect smells a rat, every benefit you promise is sniffed with suspicion.

The new book won't be out until May. In the meantime, Simmons' website has lots of info on how you can influence and persuade thru storytelling.

Wednesday, March 7, 2007

Radio radio

Richard Siklos at The New York Times didn't do the proposed merger of satellite radio players Sirius and XM any favors when he opened his Sunday story on the architect of the plan with: "Mel Karmazin could sell microwavable ice to Eskimos." Other recent NYT stories, such as the one on the premium Karmazin offered XM to get it to accept the deal and the one on how the deal is timed to take advantage of the current administration's willingness to accommodate Big Business, also gave the impression that Karmazin is trying to pull a fast one on the public and their not-always-so vigilant regulatory watchdogs.

Maybe he is. Today's NYT story suggests that FCC chairman Kevin Martin thinks so and indeed, it does look like Karmazin is sugarcoating the benefits to satellite radio subscribers, like me. Given what I had read up 'til now, I presumed that if the merger closed, I'd get XM programming in addition to my current Sirius programming for the same price I pay now. Silly me. It turns out Mel is only offering to give me the same programming I get now for the same price, for a while. If I want XM, I'll pay more. In other words, Karmazin's promise of more choice and lower prices is actually more choice or the same price.

As a Sirius stockholder, I am totally in favor of the merger. As a customer, I don't care much one way or another. As a citizen, I'm wondering if all this posturing by Congress and the FCC is just show biz or if they really are serious about minding the air waves.

Tuesday, March 6, 2007

One question: Steven Hiatt

I posted on the release of Berrett-Koehler's new collection, A Game as Old as Empire, a couple of weeks ago. Since then, I've gotten a chance to dip into it and found it as fresh and disturbing as today's news.

For instance, the morning after I read the chapter relating Greg Muttitt's investigation into the ongoing effort by the US gov't and Big Oil to grab Iraq's most significant source of revenue, its oil reserves which comprise 10 percent of the world's total reserves, the news broke that after much foot-dragging the Iraq cabinet had approved the draft of a national oil law that would open the way for foreign investment in and control over their reserves for the first time since the 1970s. The stories in the news barely mentioned this important fact and said nothing about its ramifications, focusing instead on how the law apportions the reserves among Iraq's regions.

Each chapter in A Game as Old as Empire exposes new strands in what editor Steven Hiatt portrays as a 'web of control' spun by Western governments, corporations, fact, the largest and most powerful institutions on earth, all aimed at looting the Third World. I wondered why they had come together in this way and asked editor Steven Hiatt this question: As you collected all of these pieces and fit them together, did you find that the players were all in the game for different reasons or do they share common motivators and goals; in other words, what are the primary drivers in this game?

Here's his answer:

"Perhaps the key principle is the quote from Hannah Arendt that I used to open my chapter: "A never-ending accumulation of property must be based on a never-ending accumulation of power." Another take would be one familiar to the analysis of financial markets: the drivers are greed and fear. In that sense, their motivations are similar, even though their perspectives may differ because of they occupy different positions in national and global structures of power. We might describe global elites--those who circulate among the top government, corporate, and other institutions--as constantly balancing the reality of competition with each other with the advantages of collusion. Jeff Faux's The
Global Class War
provides a fine account of what he calls "the part of Davos."

For example, suppose you're the head of the US Export-Import Bank, the US export credit agency. Your job is increase the exports/ contracts of major corporations like Boeing, Bechtel, and General Electric. The political aspect is that these contracts will result in jobs and investment in the US and help the administration and politicos in impacted districts and states. Power thus comes from increased business and profits, coin that can be turned into political power. The fear aspect is the mirror image: suppose the contracts, and the profits, go to Airbus, China Harbor, and Siemens? There's an institutional aspect, as well. You don't get far as head of an ECA by reducing your support for local industry: Success is defined as more exports, more contracts, more money, more power. If you don't understand the game or want to play it, you'll be replaced by someone who will. And power is very seductive: if you're newly arrived at these heights, you don't want to give it up. If you've inherited a place at this particular table, you look on it as simply what you're entitled to.

There are also geopolitical drivers--for example, the struggle to ensure access to energy supplies and other raw materials (as well as the struggle to control them to ensure leverage on other countries; see numerous US policy statements on the importance of US primacy in the Middle East going back to 1944). Again, on an institutional level, you don't succeed in the security services or the foreign policy establishment by giving up power and advantage.

Of course, there are differences of opinion among elites about the best course of action. George W. Bush and Dick Cheney believe, it is said, that the sooner the Battle of Armageddon is fought in the Middle East, the sooner the Messiah will return to reclaim His heavenly kingdom. This is decidedly a minority taste. To take another example, some corporate and government leaders, faced with the evidence of global warming, have pushed the longer-term health of the global economy/society, while others, influenced by ideological blinkers or a more precarious position in the market, take only the shortest term view of profit maximization.

Corporate globalization has brought the collusion aspect of the relationship among global elites to the fore. The World Trade Organization and NAFTA were admittedly designed to take most economic matters out of democratic debate and decision making, for example, settling trade issues by secret tribunals through a system riddled with conflicts of interest. As Alasdair Spark, asked, in defense of international elite conclaves such as Davos and Bilderberg, "Shouldn't we expect that the rich and the powerful organize things in their own interests. It's called capitalism."

But, we might, ask: what about the rest of us—the 6.5 billion of the non-elite inhabitants of the planet?"

You can read an excerpt from the book here. Also, somehow I ended up with two extra copies of the book. I'm giving them away to the first two people who email me at Include your mailing address, in the U.S. only please.

Monday, March 5, 2007

Absolut marketing

The Swedish government announced that it is getting out of the booze business, which means the third best-selling premium brand in the liquor industry, Absolut, is up for grabs. Absolut vodka reportedly accounts for about half of the sales of Vin & Sprit (no wasted vowels there), which is valued at $5.7 billion.

The next time someone disses Marketing, you should remind them of Absolut. After all, who had ever heard of Swedish vodka in 1980? And truth be told, Absolut is not as good as Stoli or the vast majority of the premium vodkas that have appeared in liquor stores since it was launched here twenty-seven years ago. (Trust me, I've done extensive taste testing. If you don't trust me, read this.) Nevertheless, it led the category for years.

So what transformed a Swedish vodka no one had ever heard of into a brand worth a couple of billion bucks? Carl Hamilton explains it best in his book, Absolut: Biography of a Bottle. He says it was the purity implied by the unique laboratory bottle, the faux heritage in the lettering, and the now-iconic Absolut this and that ad campaigns that tied the brand to everything and everybody that was cool over the past 20 years -- all of which were dreamed up by marketers.

So here's a tip of the martini to marketers. When they get it right, they really earn their keep. Skoal!

Sunday, March 4, 2007

Our town, version 2.000

There is a passage in the profile of Orlando in this month's National Geographic that stopped me dead. T.D. Allman writes:

All over Orlando you see the forces at work that are changing America from Fairbanks to Little Rock. This, truly, is a 21st-century paradigm: It is growth built on consumption, not production; a society founded not on natural resources, but upon the dissipation of capital accumulated elsewhere; a place of infinite possibilities, somehow held together, to the extent that it is held together at all, by a shared recognition of highway signs, brand names, TV shows, and personalities, rather than any shared history. Nowhere else is the juxtaposition of what America actually is and the conventional idea of what America should be more vivid and revealing.

Welcome to theme-park nation.

This resonated with me because I see hints of Allman's dark vision here in the small town of Williamburg. Colonial Williamsburg, for instance, has expanded its for-profit side with a newly-opened spa in what used to be the Abby Aldrich Rockefeller Folk Art Museum and broken ground on an executive health center. On one hand, I welcome these amenities; on the other, I'm not clear on their connection to the heritage that CW was established to restore and protect.

We've also got two so-called New Urbanism communities under construction -- New Town and High Street. I'm sure you've seen one near you; they are those outdoor shopping malls that you can move into. On one hand, I'm glad to see all the new stores and restaurants; on the other, these developments are so patently commercial that to call them 'communities' seems worse than phony.

Is Allman's paradigm coming here? Is it coming to a town near you, too?

Friday, March 2, 2007

In case you don't have enough to read... can always dip back into the Greek classics, which, if you are of a thrifty mind, are available as free e-books. In this week's Newsweek, Columbia historian Eric Foner recommends Homer, saying, "I read the Iliad and the Odyssey to my daughter more than once. They say everything that can be said about human motivation."

The late Peter Drucker recommended the Greeks, too. He especially liked Xenophon, who he said wrote everything we needed to know about leadership 2300 years ago. Try Anabasis, Xenophon’s epic account of a 1500-mile fighting retreat out of Persia for hints on leading in a crisis. It's also been published as "The March Up Country" and "The Persian Expedition."

...and want something a little more contemporary, the Knowledge@Wharton e-letter just published a Spring reading round-up which leads with The Halo Effect (mentioned here back in January). It includes articles and/or excerpts for each book.

Thursday, March 1, 2007

Best corporate citizens 2007

CRO magazine, which now incorporates Business Ethics, just released its eighth annual list of the 100 best corporate citizens. I'm still not sure I like the fact that corporations have the same rights as us human citizens, but they do. So, it's a good thing that at least some of them see fit to play nice.

It's also nice that 11 companies have made the list all eight years:

Herman Miller
Pitney Bowes
Southwest Airlines
Brady Corp
St. Paul Travelers.

Give 'em a hand or better yet, some of your business.

Missing from the list after being in the top 10 since the very beginning is Hewlett-Packard, whose spymasters offered us an instructional lesson in how to erase years of good work and good will. Too bad they didn't learn anything from Merck, another former Best Corporate Citizen which accomplished the same feat back in 2005, when the Vioxx debacle got it kicked off the list after 5 consecutive years. Speaking of feats, how's that old Lowell George song go? "It's so easy to slip. It's so easy to fall."