Is the gig up?

strategy+business, December 17, 2020

by Theodore Kinni



Photograph by Brothers91

A decade ago, advocates touted the sharing economy as an alternative to corporate capitalism. Digital technology was opening vast, new peer-to-peer marketplaces: TaskRabbit and Airbnb were founded in 2008, Uber in 2009, RelayRides (now Turo) in 2010, Postmates in 2011, Lyft in 2012. These platforms promised that people would be able to make a good living while working when and how they wanted — selling their time and skills, and renting out their cars, spare bedrooms, and that dusty camping gear in the attic.

“You will know by now that things haven’t turned out exactly as expected,” Juliet Schor wryly notes in her new book, After the Gig. Schor, a sociology professor at Boston College, and her team at the Connected Consumption project, funded by the MacArthur Foundation, studied gig workers and platforms of the sharing economy from 2011 to 2017. The result is a more nuanced view than has been offered by previous books on this topic, which typically focus on either how companies can build their own platforms or how platform companies prosper by evading regulation and exploiting workers.

Among the insights: The less you actually need a gig job, the more likely it is that a gig job will work for you. “Workers’ experiences are not uniform, with variation in pay rates, job satisfaction, and how they do the work,” Schor explains. “As we saw these differences playing out at individual companies, we realized that they are explained by how dependent the worker is on income from the platform to pay basic living expenses.” Schor’s team found that supplemental workers — that is, workers who are not financially dependent on their platforms — make more money, have more autonomy, and are more satisfied with their gigs than platform-dependent workers. Moreover, the former group comprises 34 percent of the workers in the sample the team studied; the latter was only 22.5 percent. (The rest, nearly half of platform workers, fall between the two extremes.)

This finding partly contradicts the headlines of worker abuse that have generated a lot of political Sturm und Drang lately. At the same time, it is clear that the gig economy can’t really substitute for a full-time job. As Schor concludes: “With some exceptions, our data suggest that being dependent on a platform is not a viable way to make a living.” Read the rest here.

Restoring craft to work

strategy+business, August 4, 2020

by Theodore Kinni



Photograph by RubberBall Productions

You’ve probably heard these stories before. There’s the proud janitor at NASA who tells President Kennedy that he isn’t just sweeping up; he is helping put a man on the moon. And the gung-ho stonemason who tells architect Christopher Wren that he isn’t just hammering rock; he is building a cathedral to God’s glory. The stories are popular, even though they probably never happened. And they get told and retold to support the power of purpose. It’s the subtext that bothers me.

Invariably, the moral of these stories is that employers (a label that literally defines the rest of us as something to be used) need to provide employees with a purpose. This suggests that many jobs are, in and of themselves, meaningless. It also implies that people don’t care about the work they do — that they are wastrels.

I don’t know if the relationship between meaningless work and aimless wastrels is one of correlation or causation (or in which direction it might run). But a high-flown and inevitably vague corporate purpose — don’t be evil! — isn’t the solution to either problem. It’s more likely the solution lies in the concept of craft, which Richard Sennett, senior fellow at the Center on Capitalism and Society at Columbia University, described in his erudite and engaging 2008 book The Craftsman.

“Craftsmanship names an enduring, basic human impulse, the desire to do a job well for its own sake” [italics added], wrote Sennett. “Craftsmanship cuts a far wider swath than skilled manual labor; it serves the computer programmer, the doctor, and the artist; parenting improves when it is practiced as a skilled craft, as does citizenship. In all of these domains, craftsmanship focuses on objective standards, on the thing in itself.”

Craft resonates for me in a way that corporate purpose never does. One reason is the fact that I’m a self-employed business writer and editor, who needs to be good at a craft to make a living. Another reason is plain orneriness: Why should I internalize a company’s purpose? Especially when I may only work there for a few years. That’s somebody else’s business (and profit), not mine. Read the rest here.

Fit-for-context leadership

strategy+business, July 6, 2020

by Theodore Kinni


Illustration by wildpixel

From Herodotus and Machiavelli to Peter Drucker and Warren Bennis, most leadership writers have followed the same basic approach: They study successful leaders and try to derive practices from their lives and careers that aspiring leaders can adopt. Amit Mukherjee, a professor of leadership and strategy at Hult International Business School, rejects this approach in his intriguing new book, Leading in the Digital World.

As Mukherjee tells it, the technologies that gave rise to the industrial era — mass manufacturing, electric power, and scientific management, among others — created the context for authoritarian leadership. Then, in the mid-20th century, new technologies, starting with statistical process control, which was pioneered by Walter Shewhart at Bell Telephone Laboratories in the 1920s, gave rise to the quality movement and spawned empowered leadership. Today, new technologies with a long arc of impact are giving rise to the “digital epoch” and creating the need for a new set of leadership practices.

In a variation on the theme of contextual leadership championed by Harvard Business School’s Anthony Mayo and Nitin Nohria, Mukherjee contends that the practices of business leaders must evolve with and from the technological context of their times. “Periodically, technologies appear that have long arcs of impact into the future,” he writes. “When introduced, they require dramatic changes in the nature of work, which, in turn, require profound changes in how people are organized. That changes how people must be led. Companies — and executives — who fail to adapt are cast aside by those who do.”

It’s been clear for several decades that digital technologies are driving the transformation of entire industries. As an example, Mukherjee points to the pharmaceutical industry, in which technologies such as genomic medicine and radio-frequency identification (RFID) tracking have driven a fundamental revamping of R&D and distribution models.

Instead of focusing on digital technologies themselves, however, Mukherjee examines their ramifications for work and organizational structures, which he categorizes as seven principles...read the rest here

5 Musts for Next-Gen Leaders

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, April 22, 2020

by Amit S. Mukherjee




Image courtesy of Gordon Studer/theispot.com

Effective leadership isn’t ageless or immutable. Periodically, new technologies overturn established modes and sweep aside executives who don’t adapt.

For most of the 20th century, after transformative technologies made it possible to measure the minutiae of human work, leaders concentrated on maximizing productivity and efficiency, many taking a command-and-control approach. But this autocratic style failed disastrously when upstart Japanese companies used newer technologies — focused on quality — to enter Western markets. In the mid-1980s, unwilling to make the organizational and leadership changes required by this shift in competition, American companies went bankrupt at rates not seen since the Great Depression. Those that survived augmented their long-standing functional silos with teams that enabled cross-functional collaboration, while their leaders learned to empower employees to make decisions.

Today, business is being transformed again — this time by digital technologies. They render some elite skills obsolete and widely distribute others; make work more thought-driven than muscle-powered; shed light on unpredictable customer needs that create disproportionate value; reveal information regardless of the merits of concealment; and affect — and are affected by — environmental conditions near and far. They also connect companies and employees by distributing work across geography and over time.

Current and aspiring leaders must respond to this new wave of change in five key ways. Read the rest here.

Pessimism dematerialized: Four reasons to be hopeful about the future

strategy+business, January 16, 2020

by Theodore Kinni



Photograph by Klaus Vedfelt

If you’re a glass-half-full person, you’re going to love Andrew McAfee’s latest book, More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources―and What Happens Next. Always optimistic, while still expressing minor notes of caution, McAfee, a research scientist at the MIT Sloan School of Management and cofounder and codirector of MIT’s Initiative on the Digital Economy (with frequent collaborator Erik Brynjolfsson), believes that life on this planet is getting better all the time. He also thinks that though humans face some big challenges, we have at our command all the resources needed to meet them.

The principle support upon which McAfee constructs this thesis, which he admits will be hard for more skeptical readers to swallow, is an ongoing process of dematerialization that he finds occurring in mature economies. Building on research by environmental scientist Jesse Ausubel and writer Chris Goodall, McAfee charts resource consumption in the United States. For instance, he uses U.S. Geological Survey data to show that as of 2015, the consumption of the five “most important” manufacturing metals in the U.S. — aluminum, copper, steel, nickel, and gold — are all off their peaks since 2000. Steel consumption is down 15 percent; aluminum is down 32 percent; copper is down 40 percent. The same is true for energy consumption, as well as a variety of farming and construction inputs. Since the first Earth Day in 1970, U.S. consumption of resources has been falling, yet the nation’s economy has continued growing. Simply put, McAfee is arguing that it takes a lot less stuff to produce a dollar of GDP today than it did 50 years ago.

McAfee declares that the data shows “a great reversal of our Industrial Age habits is taking place. The American economy is now experiencing broad and often deep absolute dematerialization.” And the rest of world? Well, the data is incomplete. McAfee finds some evidence that Europe’s industrialized nations are “past peak” resource consumption, but developing countries, such as China and India, that are still in the process of industrializing, “probably are not yet dematerializing.”

Four forces drive the engine of dematerialization, according to McAfee. Read the rest here.

Disney CEO Robert Iger’s Testimonial to Empathy

Real Leaders, January 6, 2020

by Theodore Kinni




In June 2016, Bob Iger (above left, with Georoge Lucas) was in China overseeing preparations for the opening of Shanghai Disneyland. It was the culmination of an 18-year effort and a $6 billion investment that the CEO calls “the biggest accomplishment of my career.” The day before the opening, as Iger was leading a VIP tour of the new park, he was informed that a two-year-old boy had been killed in an alligator attack at Walt Disney World in Florida.

A highly capable Disney crisis team was already on the scene and Iger dictated a public statement. Everything that could be done was being done, but the CEO felt compelled to try to speak to boy’s parents. Once he got on the phone with the boy’s father, Iger told him that he was a father, too, and a grandfather, but even so, he “couldn’t fathom what they must be going through.”

Sobbing, the boy’s father asked Iger to promise this would never happen to another child. He promised. “I sat there shaking on the edge of my bed,” Iger writes in his book, The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company. “I’d been crying so hard that both my contact lenses had come out.”

When you visit Disney World, you can see one result of that promise: There are ropes, fences, and warning signs around the lagoons and canals on the property. They were installed within twenty-four hours of the phone call, across an area twice the size of Manhattan.

It’s a gut-wrenching story—an odd one to find anywhere in a CEO’s memoir, let alone in its prologue. Being the skeptical type, I wondered about Iger’s motives for telling it. He is as polished and professional an executive as I have ever seen, and a welcome contrast to two flavors of leaders that we see too often these days: posturing, blurting assholes who seem to have no self-control whatsoever; and cold, amoral automatons whose sole concern seems to be the value of their stock options.

Iger definitely isn’t the former. He could be a particularly well-disguised example of the latter—I don’t know him personally and can’t say for sure. But I suspect from reading The Ride of a Lifetime and following Disney’s fortunes over the past 20 years that he is not.

It’s also odd that the empathy that Iger demonstrated during that call isn’t one of the ten principles “necessary to true leadership” that he lists a few pages later. The closest he gets to it is the principle of fairness, which he says, requires empathy and accessibility. Yet, Iger’s tenure at Disney is such a compelling testament to the power of empathy that both veteran and aspiring leaders should study it. Read the rest here.

A disappointing progress report on diversity and inclusion

strategy+business, December 12, 2019

by Theodore Kinni


Illustration by Boris SV


Racial and ethnic minorities make up 38.8 percent of the population of the U.S. and a nearly equivalent share of its workforce. But minorities represent only 17 percent of full-time university professors and 16.6 percent of newsroom journalists. They are only 4.5 percent of Fortune 500 CEOs and 16 percent of Fortune 500 boardroom directors. They are 9 percent of law firm partners; 16 percent of museum curators, conservators, educators, and leaders; 13 percent of film directors; and 6 percent of the voting members of the Academy of Motion Picture Arts and Sciences.

These discrepancies haven’t gone unnoticed, but they also haven’t been effectively addressed. “During more than three decades of my professional life, diversity has been a national preoccupation,” writes journalist and New York University professor Pamela Newkirk in the second paragraph of the preface to her book Diversity, Inc. “Yet despite decades of handwringing, costly initiatives, and uncomfortable conversations, progress in most elite American institutions has been negligible.”

Newkirk devotes most of Diversity, Inc., which is heavily focused on racial inequality, and particularly, discrimination against African-Americans, to demonstrating this dismaying reality through a sometimes tangled mix of factoids and anecdotes drawn from the arenas of academia, media, and business. The bigger stories that emerge are all variations on the same theme: The lack of progress by minorities in America’s elite institutions is a function of a political and societal arc that has stretched across a half a century. Read the rest here.

Past performance is no guarantee of future results

strategy+business, October 18, 2019

by Theodore Kinni



Photograph by aeduard

By 1905, when philosopher George Santayana wrote, “Those who cannot remember the past are condemned to repeat it,” humans had already been gleaning lessons from history for several millennia. Around 800 BC, in the Iliad, Homer used the principal players in the Trojan War to explore leadership strategies and styles. Nearly a thousand years later, at the start of the second century AD, Plutarch compared the character traits of historical leaders in Lives of the Noble Greeks and Romans. And of course, we are still at it today. The business bookshelves are sagging with leadership and strategy lessons drawn from the lives of yesterday’s inventors, tycoons, generals, politicians, and other leading lights.

Sometimes these lessons feel like too much of a stretch — not only because they tend to idealize their subjects, but also because they elevate ad hoc responses into generic rules. How much credence, for instance, should a new CEO put in creating a “team of rivals” à la Abraham Lincoln? Or, to hold my own feet to the fire, how much faith should a leader in a battle for market share put in the “hit ’em where they ain’t” military strategy of Douglas MacArthur?

Ben Laker, professor of leadership at Henley Business School and dean of education at the National Centre for Leadership and Management in the U.K., points to current Prime Minister Boris Johnson, who wrote a book about another U.K. prime minister, The Churchill Factor: How One Man Made History, to illustrate the difficulties of applying lessons from the past. “The Prime Minister knows how Winston Churchill created a sense of connection through a ‘backs against the wall’ mentality in 1941. He is basing his rhetoric, decisions, and actions on Churchill’s example. And many people do feel more connected to him because of it,” Laker says. “But as Johnson’s critics observe, Brexit is not a war and a wartime mentality is at odds with a situation that requires openness and collaboration to reach a feasible outcome.”

Clearly, context is a critical factor in applying history. “You can look at the past and ask yourself whether you would do the same thing in the same situation,” Laker told me in recent conversation. “But the problem is you are not in the same situation. So, how relevant is history to your present situation?”  Read the rest here.

In praise of the purposeless company

strategy+business, April 18, 2019

by Theodore Kinni



Photograph by Avalon_Studio

These days, my vote for the most misunderstood and misused management concept goes to “corporate purpose.” Back in 1973, the concept was crystal clear to Peter Drucker, who declared with admirable concision in Management: Tasks, Responsibilities, Practices: “There is only one valid definition of business purpose: to create a customer.” Since then, however, the definition of corporate purpose has mutated into pretty much any reason for being in business that isn’t explicitly connected to making money.

Business professors Sumantra Ghoshal and Christopher A. Bartlett unbottled this genie in a 1994 article in Harvard Business Review, in which they argued that strategy (“an amoral plan for exploiting commercial opportunity”) wasn’t enough: “A company today is more than just a business. As important repositories of resources and knowledge, companies shoulder a huge responsibility for generating wealth by continuously improving their productivity and competitiveness. Furthermore, their responsibility for defining, creating, and distributing value makes corporations one of society’s principal agents of social change. At the micro level, companies are important forums for social interaction and personal fulfillment.”

Why was a highfalutin corporate purpose seen as such a big deal? IGhoshal, who passed away in 2004, and Bartlett, who is now professor emeritus of business administration at Harvard Business School, concluded that companies had to transform themselves from economic entities to social institutions. They added that the “definition and articulation [of purpose] must be top management’s first responsibility.” Read the rest here.

Ken Iverson’s Plain Talk

strategy+business, January 7, 2019

by Theodore Kinni

Twenty years ago, in 1998, my agent called and asked if I’d be interested in coauthoring a business book aimed at identifying 21 companies that would lead the way in the 21st century. If you know anything about the vagaries of prediction, you can imagine what a lesson in humiliation that gig turned out to be. (Oh, 3Com; oh, Nokia.) But on the plus side, the project introduced me to F. Kenneth Iverson, a highly successful corporate leader who isn’t nearly as well remembered today as he should be — and whose simple and clear directives from the late 20th century resonate clearly in the 21st century.

At the time, Iverson’s memoir/management exposition, Plain Talk: Lessons from a Business Maverick, was newly published. And he was chairman of Nucor Corporation, which, under his leadership, had come from nowhere to run circles around Big Steel and compete head-to-head with heavily subsidized foreign steelmakers.

Iverson, born in 1925, revolutionized the steel industry. But that wasn’t his initial intent. In 1965, he was a vice president at Nuclear Corporation of America, a profitless company in which he headed a unit making steel joists. As bankruptcy loomed, the board fired the company’s president and offered Iverson the position. “Apparently, managing the only profitable division in the company made me presidential material,” he recalled in Plain Talk. “Although I was just 39 years old, I wasn’t too flattered. No one else wanted the job. It was mine by default.”

Iverson didn’t waste time formulating a grand or complex strategy. He returned the company to profitability by doubling down on what worked: He focused on steel joists and sold off everything else that was losing money. Neither did he have the luxury of pursuing disruptive innovation. He was too busy trying to make money in a commodity business the old-fashioned way: by reducing costs and driving up productivity.

He also invested, somewhat counterintuitively, in vertical integration. In 1968, when the rising cost of bar steel (the main ingredient in steel joists) started squeezing profits, Iverson decided to make it instead of buy it. Unable to come up with the couple hundred million dollars needed to finance a traditional smelting mill, he latched onto the then-emerging minimill concept, in which electric arc furnaces melt scrap iron to make low-cost steel. By 1970, the minimill, which Iverson built with a US$6 million bank loan, was producing more steel than the steel joist business required and became a profit center in and of itself. In the years that followed, Nuclear Corporation of America was renamed Nucor, and it built more minimills and expanded into steel decking, bolts, and sheet steel. Read the rest here.

Lessons From China’s Digital Battleground

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, June 12, 2018

by Shu Li, François Candelon, and Martin Reeves


The explosive growth of the digital market in China, a country with more than 700 million internet users, constitutes a rich prize to companies that can exploit its opportunities. Five of the 10 largest public internet companies in the world — Tencent Holdings Ltd., Alibaba Group Holding Ltd., Baidu Inc., JD.com Inc. (aka Jingdong), and NetEase Inc. — have emerged from this $1 trillion market. And, by February 2018, Chinese companies accounted for 33% of the world’s unicorns (privately held startups valued at $1 billion or more), with almost three-quarters of them targeting digital or online markets.

So why have so few of the leading Western players succeeded in holding a winning share in China’s digital market? They know well the winner-takes-all stakes in digital business, and they have successfully dominated international markets in the past — after rolling out their digital products, platforms, and business models in other countries, without significant resistance. But in China, they have struggled:

In 2002, eBay Inc. entered China and quickly captured a 70% market share. Five years later, its market share had dropped to below 10%.

In 2004, Amazon.com Inc. acquired Chinese online book retailer Joyo.com, heralding its high-profile march into China. In 2008, Amazon’s share was 15%; now, it’s below 1%.

In 2005, Microsoft Corp.’s MSN China went live and gained a 53% market share among Chinese business users. But its market share decreased to less than 5% before it quit the Chinese market in October 2014 under strong attack by Tencent’s QQ and WeChat.

In 2014, Uber Technologies Inc. formally entered China and spent billions in fierce competitive battles to gain market share from its Chinese competitors. In 2016, it sold its Chinese subsidiary to Didi Chuxing Technology Co. and exited the country.

In 2015, Airbnb Inc., the world’s largest online marketplace for short-term lodging, landed in China. As of today, it lags far behind its Chinese peers. In 2017, Airbnb had 150,000 rooms for rent; market leader Tujia.com had 650,000 rooms.

Why have so many powerful Western players hit a wall in China? Protectionism is a convenient excuse, but we believe that it is an exaggerated one. Worse, it oversimplifies and obscures some important competitive realities in China that many Western players have missed.

These factors arise from the very different starting point at which China entered the digital era. Unlike many Western economies, China’s economy was not yet mature when the digital tsunami broke on its shores. In many of the industries most affected by digital technologies, offline offerings were limited, physical infrastructure was lacking, and other essential market components, such as payment systems, were missing. Thus, in China, digital technologies offered a solution to fundamental bottlenecks in consumption, rather than a disruptive alternative to existing solutions.

Against this backdrop, China’s digital market developed in an exceptionally rapid and dynamic manner, one based on need rather than preference. Furthermore, the winning game plan for dominating digital markets turned out to have some unique characteristics with regards to localization, speed, online and offline integration, and local ecosystem development.

It is important for Western players to recognize and understand these characteristics. They are not only key to winning in China but also in other countries that share a similar profile, such as India and Indonesia. In addition, they provide valuable insight into how China’s digital giants may compete as they go global. Read the rest here.

How to Become a Master of Disaster

strategy+business, June 4, 2018

by Theodore Kinni

If you like disaster stories, you’ll love Meltdown, by Chris Clearfield, a principal at risk consultancy System Logic, and András Tilcsik, an associate professor at the Rotman School of Management. The authors cover a gamut of catastrophe, from a ruined Thanksgiving dinner to the water crisis in Flint, Mich., and the multiple meltdowns at the Fukushima Daiichi Nuclear Power Plant caused by the Tōhoku earthquake and tsunami in 2011. The worst part of all these examples: According to the authors, they were preventable.

All the disasters recounted in Meltdown share characteristics first identified by sociologist Charles Perrow. Now in his nineties, Perrow earned the appellation “master of disaster” for his seminal study of a host of incidents in high-risk settings, starting with the Three Mile Island Nuclear Generating Station accident in 1979. “In Perrow’s view,” explain Clearfield and Tilcsik, “the accident was not a freak occurrence, but a fundamental feature of the nuclear power plant as a system.”

This system — indeed, each of the systems described in Meltdown’s disasters — is complex and tightly coupled: complex in that the systems are nonlinear, with parts sometimes interacting in hidden ways, and tightly coupled in that there is little slack in these systems. A failure in one part quickly, and often, unexpectedly affects other parts. Read the rest here.

How to Compete Against the New Breed of National Champions

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, May 30, 2018

by Sharon Poczter, Aldo Musacchio, and Sergio G. Lazzarini

On March 12, 2018, the U.S. government blocked Broadcom Inc.’s proposed merger with Qualcomm Inc. on the grounds of national security. The presumption was that the merger of the two chipmakers would have resulted in a third company, China’s Huawei Technologies Co. Ltd., gaining a dominant position in the market for 5G mobile network technologies. Huawei is a “national champion” — a company that is heavily subsidized (either implicitly or explicitly) or, in some cases, owned by a government — and the U.S. government is concerned that its growth could provide the Chinese government with undue access to and control over U.S. communication networks.

While the threat posed by national champions is nothing new, their essential character has substantially changed, and the competitive advantage of national champions in the global marketplace has become more pronounced. Today’s national champions are much more sophisticated, competing in more industries, and harder to spot than ever before. As a result, Western companies need a new strategic guide for competing against them.
A New Breed of Competitor

Traditionally, national champions have been large industrial companies, subject to a high degree of direct governmental oversight and intervention. Typically, they are unresponsive to global competitive forces, depending instead on explicit government subsidizes and protection. For instance, Indonesia’s state-owned electricity provider, Perusahaan Listrik Negara, enjoys a government-created monopoly, but its inability to satisfy growing domestic demand has resulted in a costly and unreliable energy supply in the world’s fourth most populous country.

Today, however, there is a new breed of national champions. They differ from traditional champions in two principal ways: the form and degree of their government connections, and their basis of competition.

Modern national champions can be hard to identify. Their connections to government take a variety of forms, both corporate and noncorporate (via sovereign and other investment funds). The degree of government ownership and intervention in these national champions also varies widely. Sometimes governments hold explicit majority or minority ownership stakes in these companies, but increasingly, government involvement is more implicit...Read the rest here.

Are American Workers Dying for their Paychecks?

strategy+business, April 12, 2018

by Theodore Kinni

Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business (GSB), hasn’t been particularly sanguine about business management for a couple of decades now — perhaps he never was. From his Machiavellian take on power to his skepticism about leadership education, his recent books have punctured conventional wisdom and challenged executives to do better. In his brutal new book, Dying for a Paycheck, Pfeffer steps up the attack.

The book’s thesis is straightforward and blunt: American workplaces and management practices are destroying individual and organizational health. To prove it, Pfeffer partnered with GSB colleagues Joel Goh, a doctoral student (now a professor at the National University of Singapore), and Stefanos Zenios, a professor of operations, information, and technology, and surveyed a broad range of employee health and wellness research.

They identified 10 workplace exposures within the control of employers that significantly affect human health and longevity. And we’re not talking about the industrial accidents that plagued the American workforce a century ago. Rather, the exposures in the 21st century include: being laid off; not having health insurance; irregular work shifts; working more than 40 hours weekly; confronting job insecurity; facing work–life conflicts; having low control over one’s job and job environment; facing high job demands; having low levels of social support at work; and working in unfair situations. Read the rest here.

The End of Scale

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, Feb. 9, 2018

by Hemant Taneja with Kevin Maney


For more than a century, economies of scale made the corporation an ideal engine of business. But now, a flurry of important new technologies, accelerated by artificial intelligence (AI), is turning economies of scale inside out. Business in the century ahead will be driven by economies of unscale, in which the traditional competitive advantages of size are turned on their head.

Economies of unscale are enabled by two complementary market forces: the emergence of platforms and technologies that can be rented as needed. These developments have eroded the powerful inverse relationship between fixed costs and output that defined economies of scale. Now, small, unscaled companies can pursue niche markets and successfully challenge large companies that are weighed down by decades of investment in scale — in mass production, distribution, and marketing.

Investments in scale used to make a lot of sense. Around the beginning of the 20th century, the world was treated to a technological surge unlike any in history. That was when inventors and entrepreneurs developed cars, airplanes, radio, and television, and built out the electric grid and telephone system.

These new technologies ushered in the age of scale by enabling mass production and offering access to mass markets. Electricity drove automation, allowing companies to build huge factories to churn out a product in massive quantities. Radio and TV reached huge audiences, which companies tapped through mass marketing. The economies of scale governed business success.

Scale conferred an enormous competitive advantage. It not only lowered fixed costs — it also created a forbidding barrier to entry for competitors. Organizations of all kinds spent the 20th century seeking scale. That’s how we ended up with giant corporations, and universities with 50,000 students, and multinational health care providers.

Today, we’re experiencing a new tech surge. This one started around 2007, when mobile, social, and cloud computing took off with the introduction of the iPhone, Facebook, and Amazon Web Services (AWS), respectively. Now, we’re adding AI to the mix. AI is this century’s electricity — the technology that will power everything.

AI has a particular property that supplants mass production and mass marketing as a basis of competitive advantage. It can learn about individuals and automatically tailor products for them at scale. This is how the GPS navigation app Waze gives you a route map tailored to your destination at a specific moment in time — a map that probably won’t work for anyone else or at any other time and doesn’t need to. AI enables mass customization for increasingly narrow markets. If a product is custom built specifically for you, you’ll probably prefer it to a product that’s built for millions of people who are only kind of like you.

This is the basis of economics of unscale. The winning companies in today’s tech surge are companies that profitably give each customer exactly what he or she wants, not companies that give everyone the same thing.

There is another, equally important way in which the current tech wave is propelling economies of unscale. Because companies can stay nimble and focused by easily and instantly renting scale, they can adjust more quickly to changing demand and conditions at much lower cost and with far less effort.

Thus, scaled companies find themselves beleaguered by unscaled competitors. Stripe is an unscaled financial services company based in San Francisco that is challenging the big banks. Airbnb, also based in San Francisco, is an unscaled hotel company that is taking customers away from the big chain hotels. Warby Parker is a New York City-based unscaled eyewear company that is threatening the big eyewear brands.

If economies of unscale will rule in this new world of business, how can a corporation, which, by definition is a large, scaled-up enterprise, compete and thrive? Read the rest here

When a Japanese Company Adopted English as a First Language

strategy+business, January 23, 2018

by Theodore Kinni

On March 1, 2010, Hiroshi Mikitani, the founder and CEO of Rakuten, a Japan-based e-retailer, announced that henceforth English would be the official language of the company’s 10,000 employees. Moreover, declared Mikitani, who often was billed as Japan’s Jeff Bezos, any employee who didn’t become fluent in English within two years would face demotion.

The initiative, dubbed “Englishnization” by Mikitani, shocked Rakuten’s 7,000 or so Japanese employees — 95 percent of whom did not speak their employer’s newly established lingua franca. It also made headlines around the world, and drew some domestic fire: “It’s stupid for a Japanese company to only use English in Japan when the workforce is mainly Japanese,” said Honda Motors CEO Takanobu Ito. (Five years later, Ito would be out and English would be in at Honda, too.)

Rakuten’s Englishnization didn’t shock Tsedal Neeley, author of The Language of Global Success: How a Common Tongue Transforms Multinational Organizations. “By mandating English,” writes the associate professor at Harvard Business School, “Rakuten was prepared to join the approximately 52 percent of multinational companies that had adopted a language different from that of their originating country in order to better meet global expansion and business needs.”

In The Language of Global Success, Neeley reports the results of her five-year longitudinal study of the initiative, which began a couple of months after Mikitani’s announcement. She also ticks off the reasons companies need a lingua franca. Communication and knowledge exchange top the list. Rakuten was operating in a fast-moving and highly competitive sector. And by 2010, the 13-year-old company was pursuing a strategy of global expansion. It was clear to Mikitani that the language barriers within Rakuten were bogging down everything — integration of acquisitions, management of business units in 27 countries, the minutiae of daily work. For instance, an email from an English-speaking employee in the U.S. to a Japanese colleague required translation, as did the reply and any additional messages — and the translations themselves often required interpretation. As you might guess, even simple exchanges could drag on for days. Read the rest here.

Is Capitalism Killing America?

Insights by Stanford Business, September 18, 2017

by Theodore Kinni


On August 2, 2017, the Dow Jones Industrial Average hit a record-breaking 22,000 — its fourth 1,000-point advance in less than a year. That same day, I read the first sentence in Peter Georgescu's new book, Capitalists Arise! End Economic Inequality, Grow the Middle Class, Heal the Nation (Berrett-Koehler, 2017): “For the past four decades, capitalism has been slowly committing suicide.”

How does Georgescu, the chairman emeritus of Young & Rubicam (Y&R) and a 1963 graduate of Stanford Graduate School of Business, reconcile the Dow’s ascent with his gloomy assertion?

“The stock market has nothing to do with the economy per se,” he says. “It has everything to do with only one thing: how much profit companies can squeeze out of the current crop of flowers in the garden. Pardon the metaphor. But that’s what corporations do — they squeeze out profits.”

In the latter half of the 1990s, Georgescu shepherded Y&R through a global expansion and an IPO. He has served on the boards of eight public companies, including Levi Strauss, Toys “R” Us, and International Flavors & Fragrances. He also is the author of two previous books, The Constant Choice: An Everyday Journey from Evil Toward Good (Greenleaf, 2013) and The Source of Success (Jossey-Bass, 2005). An Advertising Hall of Fame inductee, the 78-year-old adman is still pitching corporate leaders. Now, however, he is trying to convince them to fundamentally rethink how — and for whom — they run their companies. Read the rest here.

A Goldilocks Approach to Innovation

strategy+business, August 2, 2017

by Theodore Kinni

In 2008, when Nike executive Sarah Robb O’Hagan was tapped to lead Gatorade, the sports drink’s sales were in decline and it was losing market share to its principal rival, Powerade. She couldn’t turn to incremental innovation: Pursuing the tried-and-tested strategy of adding flavors and low-calorie options to the Gatorade portfolio had already run its course, and was not yielding returns. The idea of blowing up one of PepsiCo’s billion-dollar brands and the organization behind it in a bid for radical reinvention was too risky.

What did Robb O’Hagan do? Taking a page from Nike’s playbook, she refocused the company’s attention — and more meaningfully, its product development and marketing budgets — on Gatorade’s core customers: the serious athletes, young and old, who accounted for 46 percent of sales. Then, she began introducing new hydration and nutrition products designed particularly for that core group. Gatorade introduced a series of gels, bars, and protein shakes that complemented the sports drink and drove its sales, instead of cannibalizing demand for it.

“The innovations were diverse, targeted a specific set of customers, and posed little strategic risk,” writes Wharton School professor of practice David Robertson, author, with Kent Lineback, of The Power of Little Ideas. The new products also reversed Gatorade’s sales slide. By 2015, Gatorade, with sales of US$5.6 billion, owned 78 percent of the U.S. market for sports drinks, about four times Powerade’s 19 percent share. Read the rest here.

What a Bestselling Author Knows About the True Genius of Steve Jobs and Ben Franklin

Inc., July 10, 2017

by Theodore Kinni



In May, Walter Isaacson, CEO of the Aspen Institute and former chairman and CEO of CNN, came to my hometown to deliver the commencement address and pick up an honorary degree at The College of William & Mary. You probably know him for his best-selling biographies, including Steve Jobs (Simon & Schuster, 2011) and Benjamin Franklin: An American Life (Simon & Schuster, 2003).

Given Isaacson's obvious interest in the personality traits, innovative thinking, and entrepreneurial flair of geniuses, I expected his address to celebrate mavericks or, as Apple put it in the memorable "Think Different" ad campaign, "the crazy ones." But he threw a changeup.

"We taught you here to be individual achievers. We celebrated individual achievement and even singular visionaries," Isaacson told William & Mary's graduating class of 2017. "What we forgot to tell you is that in the real world it's not about singular achievement. It's about teamwork. It's about being able to collaborate. When you get to the real world, you are going to learn that innovation is a team sport and that success is a collaborative effort." Read the rest here.

Spend Your Weekend Like Shonda Rhimes (Studies Prove It Will Boost Your Productivity)

Inc., July 1, 2017

by Theodore Kinni



"You can work long, hard or smart, but at Amazon.com, you can't choose two out of three," asserted Jeff Bezos in his 1997 letter to shareholders. Journalist Katrina Onstad strenuously disagrees: "Actually, you should choose: the last two. The first one is bullshit."

Onstad makes that case in her new book, The Weekend Effect: The Life-Changing Benefits of Taking Time off and Challenging the Cult of Overwork (HarperOne, May 2017). In it, she cites studies stretching back to the early 1900s that prove that our productivity and effectiveness decline when we consistently exceed 40-hour work weeks. This should give pause to entrepreneurs who think they--and their employees--have to work long hours to succeed.

In fact, Onstad calls out some highly successful founders whose work ethic might give Jeff Bezos pause--like TV producer and showrunner Shonda Rhimes. Rhimes gets as many as 2,500 emails daily, but she won't read or respond to them after 7:00 pm on weeknights or on weekends. "Work will happen twenty-four hours a day, 365 days a year if you let it," Rhimes told NPR. "It suddenly occurred to me that unless I just say, 'That's not going to happen,' it was always going to happen."

I interviewed Onstad (on a Wednesday during working hours) to learn more about The Weekend Effect and why and how we should reclaim our weekends. Read the rest here.