Think Globally, Innovate Locally

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, February 23, 2022

by Satish Nambisan and Yadong Luo


Michael Glenwood Gibbs/theispot.com

Digitization and globalization are converging to transform innovation in multinationals across industries. Companies such as Bayer Crop Science, John Deere, Johnson Controls, Philips, and Unilever are pursuing the promise of what we call digital globalization. They are finding that digitally infused innovation assets, such as data, content, product components, tools, and processes, are not only readily portable across national borders but also amenable to mixing and matching. This digitally enabled innovation generates new offerings, business models, and operations to suit specific country markets — at a faster pace and lower cost than previously.

Fashion brand Tommy Hilfiger has deployed a fully digital design workflow across all of its global apparel design teams. Designers catering to the demands of different markets around the world can create, store, share, and reuse digital design assets. Transforming traditional design and sample production steps into such digital-infused processes enables the label to not only accelerate its innovation but also diversify its offerings.

As promising as digital globalization sounds, however, it is facing headwinds that are driving deglobalization (or localization), including trade restrictions and uncertainties fueled by geopolitical tensions and nationalism. China, for instance, recently passed a host of protectionist laws and regulations aimed at controlling the internet and cross-border data flows. As companies such as Apple, Morgan Stanley, and Oracle have discovered, there is ambiguity around what constitutes personal data and what should be localized in China. This is significantly limiting the portability of multinational companies’ digital innovation assets and raising the level of innovation uncertainty and risk. Geopolitical tensions can also result in more closed and less trusting stances when companies pursue collaborative innovation ventures.

Thus, for multinationals, the coexistence of globalization and localization creates a challenging context for innovation. How, then, can they pursue innovation to take advantage of the forces driving digital globalization while also adapting to the forces driving localization? Read the read here.

Reinventing the Gulf region

Learned a lot about the challenges facing GCC governments and how to address them lending an editorial hand here:

Strategy& Middle East Ideation Center, April 2021





The COVID-19 pandemic has accelerated and amplified the economic, social, and environmental challenges facing the Gulf Cooperation Council (GCC) countries. Pre-pandemic, these countries had initiated significant reforms that allowed them to respond in a more resilient, dynamic, and digital manner. Now, the GCC governments have an opportunity to elevate their economic, institutional, and societal goals and accelerate the speed and scale of regional transformation.

These aspirations will require understanding and resolving five growing tensions and their underlying trends. The tensions — economic and social asymmetry, technological disruption, the impact of aging populations, the polarization of the global order, and the changing nature of institutional trust — are wide-ranging and interconnected.

To mitigate the challenges and achieve an aspirational vision for the region’s future, GCC countries would need to adopt a holistic and integrated transformation agenda. This agenda introduces new economic growth models that put local first. It encompasses a human-centric approach to well-being that puts citizens first. Moreover, it seeks to bolster institutional agility and accountability to put innovation first. Download and read the report here.

Inside Mexico's Anemic Economy

LinkedIn, February 9, 2020

by Theodore Kinni



They say ignorance is bliss and it certainly used to feel that way whenever I ate a tortilla chip laden with guacamole. But now, because journalist Nathaniel Parish Flannery chose avocados, along with coffee and mezcal, as the principal entry points for his boots-on-the-ground exploration of the Mexican economy, Searching for Modern Mexico, I know a little too much about the main ingredient of guacamole to enjoy it’s creamy, green goodness as much as I once did.

Most of the avocados Americans consume come from Michoacán, a state located west of Mexico City that stretches to the Pacific Ocean. In 1995, the year after the North American Free Trade Agreement (NAFTA) was signed, Michoacán exported 45,600 tons of avocados. In 2015, it exported nearly 775,000 tons valued at $1.5 billion. But if this sounds like a free-trade success story, it’s not so much.

The wealth generated by avocados not only enriched Michoacán’s farmers, explains Flannery, but it also attracted criminals, many of them former members of drug cartels. These gangs of gunmen demanded 30-40 percent of the earnings of avocado producers as “protection money.” The gangs tortured and killed anyone who refused to pay, dumping the mutilated bodies in public squares as a warning.

The police and armed forces of Mexico’s local, state, and federal governments were unable to stop the killing, so the avocado growers of Michoacán formed and funded their own gangs, vigilantes called the autodefensa. A running battle ensued that continues today. Caravans of gunmen armed with automatic weapons speed through avocado country fighting for control. Gangs have splintered and reformed until it is impossible to tell the good guys from the bad guys. Cities and towns have been transformed into armed camps, with private armies manning turrets and barricades.

“The government doesn’t rule here, but it’s under control,” a grower in the city of Tancítaro tells Flannery. “You can relax.” Meanwhile, in the U.S., we are mashing avocados into guacamole as little as 30 hours after they were picked in Michoacán. Read the rest here.

A new view of the fortune at the bottom of the digital pyramid

strategy+business, July 24, 2019

by Theodore Kinni




Photograph by code6d

The benefits of digitization and Internet connections in developing nations — and the opportunities awaiting companies that can provide them — have been much lauded in the past couple of decades. But as Payal Arora, a professor at Erasmus University Rotterdam, clearly demonstrates in her new book, The Next Billion Users, the conventional storyline around the transformative effect of technology on people’s lives often doesn’t ring true.

Arora, who has been studying how the global poor outside the West use computers and the Internet for nearly 20 years, discovered this for herself during her first development project in a rural region of southern India. “The goal,” she explains, “was to infuse this town with new digital technologies to help the poorer members of the community leapfrog their way out of poverty.”

The project team set up computer kiosks and funded cybercafes. It sent computer-equipped vans to remote villages to promote Internet awareness. “We envisioned women seeking health information, farmers checking crop prices, and children teaching themselves English,” Arora writes. The reality was the polar opposite: The kiosks became Pac-Man gaming stations, social networking sites dominated computer usage in the cybercafes, and the free movies used to attract people to the vans became their primary draw.

“Many of the technology development projects I have worked with since have yielded similar results,” Arora writes. “Play dominates work, and leisure overtakes labor, defying the productivity goals set by development organizations.” (Imagine the sniffing among Western do-gooders.)

This is the source of what Arora defines as the third digital divide between the developed and developing worlds. The first digital divide is access to technology. The second divide is the ability to use the technology — to read and write, for instance. And the third divide, which Arora labels “the leisure divide,” is rooted in motivation. “The leisure divide is about understanding what the global poor want from their digital life and why it matters to them,” she writes. “It reminds us that fulfillment is not necessarily a matter of efficiency or economic benefit but can involve a more elusive, personal, and emotive drive.” 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 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.

Global Mobility Involves a Top-down, Bottom-up Effort

Learned a lot lending an editorial hand here:

Boss, April 2018

by David Mallon

Getting the right people to the right place at the right time is a perennial challenge for large, multinational companies. Recently, however, the need to address that challenge has become more pressing.

One reason is rising nationalism and the backlash against globalization that often accompanies it, which is making it more difficult for companies to execute effectively on global talent strategies. On the opening day of the 2018 World Economic Forum in Davos, India’s Prime Minister Narendra Modi called out the globalization backlash as one of “the three most significant challenges to civilization as we know it,” along with climate change and terrorism.

Another reason is the division of the world’s talent markets, which can exacerbate the need for a mobile workforce and a strong employer brand. According to the International Labor Organization, the job markets in developed economies, including Europe, the U.S., and Canada, are likely to continue to tighten, while in developing economies, particularly in Latin America, the pool of available talent is likely to expand.

A third reason is the growing demand among top talent for more productive, engaging, and enjoyable work, which, for many, includes international assignments. Millennials want to work for global companies with aspirations beyond profit-seeking. The Deloitte Millennial Survey 2017 found that millennials view business positively, but they also believe that multinational businesses are not fully realizing their potential to alleviate society’s biggest challenges.

Together, these conditions are raising the mobility stakes for multinational companies. They also explain why more and more executives are asking my colleagues and I at Bersin, “How can we improve global mobility?” Read the rest here.

A Not-So-Elementary Exploration of Brand Insight

by Theodore Kinni

strategy+business, May 11, 2016

Martin Lindstrom is the Sherlock Holmes of brand consultants. Even as he walks you through the cases in his new book, Small Data: The Tiny Clues That Uncover Huge Trends(St. Martin’s Press, 2016), you can’t help but marvel at his powers of observation and deduction.

Befitting a Holmesian adventure, the first case in Small Data begins with a mysterious call. The interpreter for a Moscow-based entrepreneur is on the line. “The businessman wanted to launch a new business in Russia with the goal of generating at least a billion dollars a year,” Lindstrom writes. “When I asked the obvious question — what was the business? — I was told it was up to me.” Most people receiving such calls would think they were about to be scammed. But for Lindstrom, a self-described  “forensic investigator of emotional DNA” with a global reputation, this was an exciting lead.

Soon after, the investigator, accompanied by two Watsons, is on his way to Russia aboard a private jet chartered by the entrepreneur. They spend a few days in Moscow and then fly 4,000 miles to Krasnoyarsk, a city in Siberia with a population of one million. And here, in the frozen steppes, Lindstrom takes the pulse of the Russian people and tries to identify the billion-dollar business opportunity harbored in their collective psyche.

He does this by mimicking anthropologists. Lindstrom notices that the locals upholster the inside of their apartment doors, that they lack mirrors, that the men stow their toothbrushes bristles-down and the women bristles up, and, most tellingly, that “every refrigerator seemed to have an extravagantly large collection of magnets.” To Lindstrom, this last clue was evidence that Russian parents doted on their young children. And he ultimately recommended that the entrepreneur launch Mamagazin.ru, an online community and e-commerce site aimed at Russian mothers and their children. Mamagazin.ru was a success, Lindstrom reports, until sanctions on imports forced it to close and retrench in 2015.

“The Case of the Refrigerator Magnets” is one of the seven tales in the book showcasing Lindstrom’s methods. Each is fascinating, but each also drives home a lesson that may or may not be intentional: It’s hard, perhaps impossible, for the average marketer to do what Lindstrom does.

Lindstrom strikes those of us who blunder through life as supernaturally sensitive and observant. When he comes across seemingly minute and irrelevant details (like whose clothes are hung where in a bedroom closet), his antennae begin to quiver. He also has decades of assignments under his belt, and each has contributed to a portfolio of insights that he can apply elsewhere. For instance, the sense of community Lindstrom discovered in Siberia informed his recommendations for redesigning a chain of grocery stores in the Southeastern U.S.

Happily, Lindstrom is willing to offer us a guide for building a brand. “Until recently, I never considered what I did for a living as a repeatable methodology,” he admits. “But over the past few years, nearly half a dozen companies have asked if I could distill my methods into a training program.”

Lindstrom outlines the result — the 7C Manifesto — in the final pages of the book. The Cs are collecting, clues, connecting, correlation, causation, compensation, and concept — and each represents a step in the process that Lindstrom follows. He also offers some useful advice for completing each step: In collecting, for instance, remove the internal filters that block your ability to observe clearly. When Pepsi asked Lindstrom to improve the public perception of his favorite soda, he eagerly accepted the assignment. But he also stopped drinking it. “Pepsi — its taste, its bubbles, its cans, its bottles, its advertising — was just too familiar,” he explains. “I had no distance from the brand, no frame of reference about desire, or craving, my own or other people’s. I couldn’t think straight. I couldn’t get inspired. I couldn’t do my job.”

Even with the helpful advice, I doubt that many of us could ever be able to do what Lindstrom does. There is some magic to his work, and some genius, and a lifetime of devotion to understanding how people’s emotions become intertwined with brands. But then, not being able to do what Sherlock Holmes can do has never stopped admiring readers from following his adventures with delight and astonishment. Why should it not be the same with Martin Lindstrom?

John Elkington’s Required Reading

by Theodore Kinni

strategy+business, March 30, 2016

Tracing John Elkington’s career is akin to taking a journey through the evolution of corporate social and environmental responsibility over the past five decades. In 1978, he cofoundedEnvironmental Data Services to provide companies with news and analysis of environmental law and policy. In 1987, he cofounded SustainAbility, a think tank and consultancy that promoted sustainable development at the corporate level. And in 2008, he cofounded Volans, a “change agency” that is focused the challenge of creating a sustainable global economy.

Along the way, Elkington introduced a number of concepts that have defined the leading edge of CSR. The most notable of them is the triple bottom line. First posited in his book,Cannibals with Forks: The Triple Bottom Line of 21st Century Business (Capstone, 1997), the idea that companies measure their financial, social, and environmental results, has recently become the focus of the B corporation movement.

A prolific writer, Elkington has written 18 other books. The most recent includeThe Breakthrough Challenge: 10 Ways to Connect Today’s Profits with Tomorrow’s Bottom Line (with Jochen Zeitz, Jossey-Bass, 2014), The Zeronauts: Breaking the Sustainability Barrier (Routledge, 2012), and The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World (with Pamela Hartigan, Harvard Business School Press, 2008).

In addition, Elkington is a visiting professor at the Doughty Centre for Corporate Responsibility at the Cranfield School of Management, as well as at Imperial College and University College London. In 2013, he was inducted into the Sustainability Hall of Fame by the International Society of Sustainability Professionals. In 2015, he received the Ethical Corporation Lifetime Achievement Award.

Elkington is a voracious reader and serves as a walking, talking annotated bibliography to the literature of corporate social and environmental responsibility. When I asked him to recommend some of the books he has found most influential and aspirational, he called out the following titles. Beyond tracking the evolution of his thinking, they catalog the development of the sustainability movement itself.

The Invention of Nature: Alexander von Humboldt's New World, by Andrea Wulf (Knopf, 2015). “I grew up with the environmental movement. In 1961, at age 11, I was raising money for the embryonic World Wildlife Fund. Later, I met and worked with pioneers of nature conservation, including WWF cofounders Max Nicholson and Peter Scott. Yet, I was stunned by Andrea Wulf’s eye-opening account of the life and work of Alexander von Humboldt. Yes, I know about the Humboldt Current and I have lectured at Berlin’s Humboldt University, but I didn’t know that their namesake warned of the risks of climate change 200 years ago! Nor did know I about Humboldt’s influence on people ranging from Charles Darwin to another key influencer of my thinking, James Lovelock, the champion of Gaia Theory.”

The Third Wave, by Alvin Toffler (William Morrow, 1980). “No single book had a bigger impact on me than Thomas Kuhn’s The Structure of Scientific Revolutions. It’s dated now, but it introduced me to the notion of paradigm shifts and it prepared me for Alvin Toffler’s The Third Wave. Toffler’s message: We had entered the Information Age and that was changing everything.

“Toffler, who is best known for his 1970 bestseller on the acceleration of change,Future Shock, renewed my interest in the work of two economists who were often overlooked (and disparaged) in those days, Nikolai Kondratiev andJoseph Schumpeter. Both men saw economic evolution as a series of long waves of investment and disinvestment. (Witness the past investment and, now, the inexorable disinvestment in an economy driven by fossil fuels.) This line of thought spurred my thinking on the societal pressure waves affecting business since 1960. But my biggest debt to Toffler only became clear to me late in 2015, when I reread The Third Waveand stumbled across his reference to ‘multiple bottom lines,’ which no doubt played a part in my conception of the ‘triple bottom line.’”

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, by Ashlee Vance (Ecco Books, 2015). “During the counterculture era, I was enthralled by Stewart Brand’s Whole Earth Catalog series and by R. Buckminster Fuller, with his focus on dematerialization. Fuller’s Dymaxion car never took off and neither did most ‘sustainable’ forms of transportation that I later worked on with automakers including Volvo, Ford, and Toyota. But Elon Musk, whose ventures I’ve been tracking since he was more or less unknown, is actually commercializing ideas like these. Ashlee Vance’s extraordinary book explores what he dubs ‘the unified field theory of Musk.’ It makes clear that if there is one person who symbolizes Toffler’s Third Wave or what the World Economic Forum is now dubbing the Fourth Industrial Revolution, it’s Elon Musk.

Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do about It), by Salim Ismail, with Michael S. Malone and Yuri van Geest (Diversion Books, 2014). “If a business leader is looking for a summation of the nature and scale of the challenges that capitalism now faces, I’d recommend Salim Ismail’s Exponential Organizations because its targets are exponential in nature. (Andrew Winston’s The Big Pivot would be another.) Exponential dynamics can drive us toward breakdown, as in runaway climate change, but over the past decade, I have become convinced that they also will be needed to address the negative effects of capitalism. Incremental solutions aren’t enough. To achieve exponential results, Ismail challenges leaders to disrupt and reboot their companies. Those of us in the sustainability industry need to do the same thing.” 

Jessica Jackley: Tapping Into the Inner Entrepreneur

by Theodore Kinni

January 7, 2016|Insights by Stanford Business

Reuters/Toby Melville

Patrick lost everything in the brutal, decades-long civil war in northern Uganda. After his village was attacked, he fled south with his younger brother, ending up near Uganda’s border with Kenya. One morning, destitute and wondering whether he would eat that day, Patrick realized that the solution to his predicament lay beneath him. He could make bricks from the clay-laced soil and sell them.

When Jessica Jackley met the brick maker in 2004, his business was thriving. He had hired several employees and was living in a new brick home of his own. Patrick is one of the many boot-strapping entrepreneurs whose stories the Stanford Graduate School of Business alumna tells in her new book, Clay Water Brick: Finding Inspiration from Entrepreneurs Who Do the Most with the Least.

Jackley says Patrick is one of the people in East Africa who inspired her to tap into her inner entrepreneur. In 2005, she cofounded Kiva, a pioneering nonprofit that enabled individuals to lend small amounts of money — as little as $25 — directly to people who needed a few hundred dollars to start or grow their own businesses around the world. In the decade since, Kiva has facilitated more than $775 million in microloans by more than 1.3 million lenders to almost 1.8 million borrowers in 83 countries.

The more elite of a community that you’re in, the more resources on hand, the more you start to hold yourself to standards that are too high. 

Jessica Jackley

Jackley left Kiva and, in 2009, cofounded a for-profit venture, ProFounder, a low-cost, securities-based crowd-funding site for small businesses. The company shut down after three years, when it became clear that it faced insurmountable obstacles in the legal landscape, Jackley said. Currently, she is working on her third new venture — a social media business, which she says is in stealth mode prior to an anticipated launch in July 2016.

In the following edited interview, Jackley, who received her MBA from Stanford GSB in 2007, talks about her book and the entrepreneurial journey that it charts.

You clearly have a lifelong desire to help people in need. How did you come to focus on entrepreneurship as a means of realizing that desire?

I was dissatisfied with the mechanisms in traditional philanthropy that seemed to turn my desire to help others into a transaction between haves and have-nots as opposed to a relationship between people. Then, in my first job out of college, as a temp at theCenter for Social Innovation at Stanford, I heard Dr. Muhammad Yunus speak about microfinance. It was funny, because even though I was in this very entrepreneurial place, maybe the entrepreneurial capital of the world, I was slow to understand how entrepreneurship could solve social problems. After that, it really clicked when I went to East Africa and met entrepreneurs whose lives had been changed by microlending. I understood that the people who I so longed to help could themselves be entrepreneurs.

Aren’t entrepreneurs a small subset of people, with a select set of skills?

Harvard professor Howard Stevenson said that entrepreneurship is the pursuit of opportunity without regard to resources. I think that living entrepreneurially, thinking entrepreneurially, using the best qualities of entrepreneurship is something that is available to all of us. It’s not exactly mind over matter, it’s more like the decision to move forward, despite what you might lack.

You started Kiva with $3,500, which you loaned to seven East African entrepreneurs. What did starting in such a small way teach you?

Had I been through business school already, I probably would have thought that we couldn’t start Kiva at all. I hope it’s old-school thinking, but there’s this idea that you need a very polished business plan, with projections that reach five, ten years out — that it’s not even worth doing something unless it’s a billion-dollar opportunity. Ridiculous.

The more elite of a community that you’re in, the more resources on hand, the more you start to hold yourself to standards that are too high — especially in the beginning. Entrepreneurship is never about what we have. It’s about what we do.

Clay Water Brick is written as a series of lessons for aspiring entrepreneurs. One of them is rooted in the discovery that one of Kiva’s valued field partners was stealing loan money. What did you learn from that?

One of the biggest lessons was to let people in, to not get embarrassed and wall them out and try to fix the problem behind closed doors. For us, that meant not just our board, not just our advisors, but our lenders, our whole community. Letting everyone in not only showed them that we were being transparent, but it also got us lots of ideas and suggestions to help us get out of trouble. It was really pretty magical to watch how people gave us a lot of grace.

It was a lesson for me in terms of personal struggles, too. I learned that you shouldn’t put on a strong face and go through life not asking for help and not being genuine about what you’re experiencing. That’s a recipe for a very unhappy life.

Did that come into play when you faced the decision to close down ProFounder, too?

The book would have been done a lot sooner had I really come to terms with, and understood, that chapter in my life earlier. It would have been possible to keep ProFounder going, but I don’t think it would have been the responsible thing to do.

Entrepreneurs are supposed to go hard at all costs — just keep plowing forward and leave the disasters in their wake. But having been through a divorce, I felt like, “OK, I know what disaster is like, and I know who bears the brunt of that.” I wanted to make sure I was always, at all costs, protecting my wellness and my family.

In the book’s acknowledgements, you thank MBA Admissions Director Derrick Bolton for rejecting your first application to Stanford GSB. Why are you thankful for that?

One, that was the year that Kiva was born. I don’t know if Kiva would have happened on some other timeline, but I highly doubt it because I would have been sitting in classrooms instead of tromping around Uganda.

Two is more personal. I’d been a staffer at the business school for three years, and although it hurt not to get in, when I did get in the next year, I felt like I really earned it.

Three, it taught me this amazing lesson about the importance of holding things with an open hand and knowing where I want to go, regardless of the things I can’t control. A lot of people look at a milestone, like getting into business school, and think that they can’t make the next step in their lives without it. I learned that I was still the same person — I still had the same dreams and still went forward to the same destination.

Will Chinese demand create global shortages in natural resources?

My no-always-weekly blog post on s+b is up:

Understanding China’s Resource Quest

Much has been written about China’s supersized demand for natural resources—oil and gas, metallic ores, and agricultural commodities—and the effects it could have on the global economy, politics, and the environment. Often these prognostications are suspect: It’s only natural to wonder whether self-interest is skewing a metal trader’s prediction that Chinese demand will drive copper’s price to stratospheric levels or a lobbyist’s prediction that a Chinese company’s acquisition of a U.S. oil company threatens national security.

That’s why I was quite interested in By All Means Necessary: How China’s Resource Quest is Changing the World (Oxford University Press, 2014), a new book written by Elizabeth C. Economy and Michael Levi, senior fellows at the Council on Foreign Relations (CFR). Economy is an expert on China and author of the seminal book on that nation’s environmental challenges. Levi is an expert in global politics and energy economics. They make for an authoritative team.

The faintly ominous ring of their book’s title notwithstanding, Economy and Levi are dispassionate and evenhanded. Contrary to many experts, they find that, by and large, China is not trying to secure the resources it needs by buying up ore deposits and oil fields—actions that could lead to a stranglehold on vital material. Instead, it is procuring natural resources mainly through trade. This has contributed to radical price increases and more competitive markets. But, according to the authors, further natural resource price shocks are unlikely because the markets have adjusted to Chinese demand.

In response to political fearmongering, Economy and Levi conclude that “the impact of China’s resource quest on international politics and security has been modest thus far.” They admit that China’s willingness to trade with nations like Iran has “helped blunt the impact of Western sanctions.” But they do not find that China has contributed to wars, like the one waged in the Sudan, where China’s state-owned oil company CNPC plays an instrumental role in extracting and refining oil and where 50 percent of the oil produced annually is exported to China.

The authors are less sanguine about the environmental effects of China’s resource needs, mainly because the same challenges that the nation faces domestically are present when it tries to obtain natural resources overseas. When Chinese companies seek to extract resources in nations with lax environmental regulation, a sort of double whammy can occur because neither party is policing the situation. There is a silver lining though: As Chinese companies interact with other more environmentally responsible multinationals, they are actually improving their practices—either because they’re feeling international pressure to do so, or because they’ve found that being responsible can also be profitable. And with corporate responsibility on the state agenda in China, the authors also expect to see better practices in the overseas ventures of Chinese firms.

The authors of By All Means Necessary also analyze the winners and losers among the main players affected by China’s quest for resources. Resource consumers who must buy in the marketplace will pay more, but the owners of those resources will profit from higher demand. Overseas investors have a major new competitor with which to contend and will need to avoid a “race to the bottom.” Governments, especially the U.S. government, will need to factor China’s resource needs into their actions to maintain their own stockpiles and to avoid igniting resource wars. National security is a two-way street.

None of these conclusions sound particularly dire, especially when you consider that China is simply assuming its place among the rest of world’s most resource-hungry nations. And if you dip back into history and examine the behavior of other nations in their quest for natural resources, such as Belgium in the Congo in the late 1800s and the U.S. and the U.K. in Iran in the 1950s, China looks like a shining exemplar…so far.

The year's best business books

This is the sixth year that I've edited strategy+business's review of the year’s best business books and as always, it was an honor and a pleasure to work with our team of expert reviewers. Here's my intro and a link to this year's essays:

Best Business Books 2013

Welcome to the 13th annual edition of strategy+business’s best business books. Every year we strive to assemble a reading list that will not only engross and entertain you, but also provide concepts, tools,

and insights that can help you lead your company to a better future.

This year’s best business books section includes seven essays by expert guides. Walter Kiechel III, former Fortune managing editor, reviews books on strategy that reflect two realities: Competitive advantage is transient, and continuous innovation is an imperative. David Hurst, s+b contributing editor, selects books that tell company stories, each a chronicle of failure, but not always recovery. John Jullens, a Booz & Company partner working in China, presents books that explore the three waves of global competitors that are emerging from developing economies. Howard Rheingold, who’s been surfing the leading edge of digitization since the early 1980s, picks out books that examine three emerging digital phenomena—big data, socialstructing, and spreadable media. Catharine Taylor, a journalist who has been covering the sea change in marketing in the past decade, offers a set of books that eschew the hoopla of social media and instant ads for the essence of marketing: the customer experience. Sally Helgesen, an author and leadership consultant, takes on self-help books for managers. And James O’Toole, a senior fellow in business ethics at the University of Santa Clara’s Markkula Center for Applied Ethics, finds leadership lessons in the biographies and memoirs of auto industry executives who made the Motor City roll. You can read their essays here...

Ship to Shelf

My weekly book post on s+b's blogs is about journalist and author Rose George's recounting of her voyage on a container ship, transporting goods across the globe:

From Halfway around the World to a Store Near You

Labels make for interesting reading in the era of globalization. For US$1, I can buy a pound of apples
from New Zealand or a pair of gym socks made in Honduras. How can goods like these be shipped thousands of miles and still be sold for a profit in my hometown of Williamsburg, Va.? Rose George’s new book, Ninety Percent of Everything: Inside Shipping, the Invisible Industry That Puts Clothes on Your Back, Gas in Your Car, and Food on Your Plate (Metropolitan Books, 2013), offers part of the answer: container ships, like the Maersk Kendal.

George shipped out on the Kendal for 39 days—“six ports, two oceans, five seas”—as part of her research, much like John McPhee did for his book on the U.S. Merchant Marine, Looking for a Ship (Farrar, Straus and Giroux, 1990). Four stories high and three football fields long, the “midsized” Kendal holds 6,188 20-foot containers. Its owner, A.P. Møller-Maersk A/S, a Danish company with $60 billion in annual revenues, is currently financing the construction of a fleet of 20 “Triple-E” ships that are a third longer than the Kendal and hold three times as many containers—reducing the cost of shipping a container by 20 to 30 percent. Three Triple-Es are already in service. They are too big to enter any port in the U.S. or pass through the Panama Canal. Instead, they travel between Europe and Asia via the Suez Canal.

But ships alone, not matter how big, are not enough to supply us with apples, socks, and myriad other goods from around the world...read the rest here

Edmund Phelps's values-driven view of national prosperity

My weekly book post for s+b's blogs is about Edmund Phelps's new book:

What is the Wellspring of Innovation?

Every author I read these days seems convinced that innovation is the wellspring of national prosperity.

But what is the wellspring of innovation? That answer is not as clear-cut.

Everybody’s got their own prescription for innovation—an education system that emphasizes science and mathematics, regulation-free markets, more patent protection, less patent protection, you name it. So I was curious to read what Edmund Phelps, a Noble laureate in economics and a professor at Columbia University, had to say on the subject in his new book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (Princeton University Press, 2013).

In the book, which is more akin to classical economic sociology than straight-up economics, Phelps examines how and why the national economies of England, France, Germany, and the United States pulled away from the rest of the world in the 1800s. He pegs the growth of these first modern economies to a new dynamism, which he defines as an “appetite and capacity for indigenous innovation.” This dynamism, he says, wasn’t the result of the “headline inventions” of the Industrial Revolution (such as spinning machines, locomotives, and iron mills); instead, the inventions were a result of the dynamism. And the source of the dynamism? Phelps says that it was the mass flourishing driven by societal values, such as individualism, curiosity, and creativity, which gave rise to a capitalistic economy...read the rest here

China's real industrial advantage

My post on the s+b blog this week is about a book that seeks to illuminate one of the less understood sources of China's industrial might:

Government Subsidies Pave the Way in China

In the 2000s, China transformed itself from a net importer to one of the largest producers and exporters in the world in four mature, capital-intensive industries: steel, glass, paper, and auto parts. What accounted for this success, which in each case was achieved in a short five-year span? 

Industry research reveals that each of the four has relatively low labor requirements, so it wasn't China’s seemingly endless supply of inexpensive workers. The Chinese companies didn't enjoy economies of scale or scope. Nor did the undervaluation of the renminbi explain their growth.

According to Usha Haley, director of West Virginia University’s Robbins Center for Global Business and Strategy, and George Haley, a professor of marketing and international business at the University of New Haven, it was government subsidies that drove this industrial transformation. In Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy (Oxford University Press, 2013), they calculate that subsidies from China’s governmental bodies—in the form of free or low-cost loans, energy, materials, land, and technology—provided the dollar equivalent of as much as 30 percent of the output of these four industries...read the rest here.

How to get filthy rich in rising Asia

This week, my book post on the s+b blogs calls out a novel that offers lessons about the pursuit of wealth.

How to Get Filthy Rich in Rising Asia  

It’s always enlightening—and enjoyable—to read business literature that actually qualifies as literature. And Mohsin Hamid’s new novel fits the bill perfectly.

Hamid, whose previous novels, The Moth Smoke and The Reluctant Fundamentalist, were shortlisted for several major literary awards, including the Booker Prize, creatively appropriates the self-help format in How to Get Filthy Rich in Rising Asia. It’s the life story of an unnamed man, an amoral Horatio Alger who is born to a poor family in a rural village in a country that sounds a lot like India (but could be any developing nation with an emerging economy)...read the rest here.

Story of My People

I've been neglecting my blogging responsibilities lately. Too much work, too little time. But starting last week, part of that work includes a weekly post on business books for the newly launched strategy+business blogs. I'm excited about it: I've been serving as s+b's senior editor for books since 2007, but mostly behind the scenes - managing book reviews and features, and editing a really terrific group of expert freelance reviewers. Now, I get to call out books that catch my eye but might not make it into s+b otherwise, and stick in my own two-cents (one of the great joys of life...just ask any Kinni).

Going forward, I'll keep this blog going in the usual sporadic fashion. I'll also post a teaser of my weekly book post with a link back to the s+b blog. Here's last week's:

Another Facet of Globalization

“Who can say whether there was ever a moment, an hour, a day when we reached the apex of our economic lives, and from that day forth, our dreams became chimeras, our successes privileges, our future an imaginary quantity?”

So begins the climactic chapter of Edoardo Nesi’s Story of My People (Other Press, 2012), an eloquent, emotion-laden, and, I think, essential addition to the globalization bookshelf. Just released last month in the U.S., this slim memoir won the 2011 Strega Prize—the first time a work of nonfiction has received Italy’s most prestigious literary award since it was established in 1947...read the rest here