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Here's a new and important book that helps us make sense of the changing business landscape. It's Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes and Paul Nunes (from Accenture) - and it describes how so many businesses are disrupted overnight by big-bang innovations that come out of nowhere.  The insights presented by the book add new perspectives to the work on disruptive innovation by Clayton Christensen and gang. 

According to the authors, the big-bang disrupters may not even see you as competition. They're not sizing up your product line and figuring out ways to offer slightly better price or performance with hopes of gaining a short-term advantage. 


EXAMPLES OF BIG BANG INNOVATION

One of the examples is the GPS system. Do you even remember Garmin, or TomTom or Magellan?  They were all disrupted by the smartphone - with Google Maps leading the way.

And the smartphone isn't done yet. It has wiped out the wrist watch industry, threatens the digital camera market, the video camcorder market, and even the music and TV industries. 

Other examples from the book include:

CampusBookRentals and Khan Academy in education, Pandora and Spotify in radio and recorded music, Skype and FaceTime in voice and video calling, and Square in mobile credit-card processing. These offerings' lightning-fast adoption is a function of near-perfect market information. Wherever customers are, mobile devices let them search a wide range of specialized data sources--including online sites like Yelp, TripAdvisor, Amazon, and other free databases of user-generated reviews--to find the best price and quality and the next new thing.

What's more, big-bang disruptions go far beyond information-based goods and services. Restaurants, for example, now depend on online reservations, customer-generated reviews, e-coupons, and location-based services to drive business.


THE SHARK-FIN PRODUCT ADOPTION CURVE

The traditional product development cycle has been radically compressed:

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What this "shark-fin" curve means is that incumbents don't have time to catch up. The crossing-the-chasm story is over.  New products are perfected with a few trial users and then are embraced quickly by the vast majority of the market!

Here are some ways in which the world has changed:

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TRUTH TELLERS

The book introduces us to the folks known as truth tellers. These are industry experts with profound insights into new technologies and customer behaviors, who can predict earlier than anyone else when small tremors signal imminent earthquakes. Often, they are people who spend their careers working in the industry, and share a unique passion for its mission, its products and its customers. My term for these guys is thought-leaders, or if you want to be real - they're the ubernerds.

Truth tellers are often eccentric and difficult to manage (no, really?!). They may be found outside your organization--they may even be customers. Learning to find them is hard. Learning to listen to them is even harder.


THE 12 RULES OF BIG BANG DISRUPTION

Another reason to buy this book is the neat methodology they've come up with to introduce this Big-Band Disruption mindset into your company:  

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I personally don't think our Fortune 100 companies can adopt this sort of thinking very easily, so I'm looking for a lot of them to get dinged severely by the Big-Bang Disrupters, some of which will come to us from India and China.

Still, the framework they present is compelling - especially the part about leaving the market before you get disrupted in the end.


THE POWER OF ECOSYSTEMS

Finally, one of the key elements of Big Bang Disruption is the replacement of the traditional supply chain by dynamic, ever-shifting ecosystems. Again, the culture of most traditional institutions can't embrace openness or collaboration. I've had some experience in that department.

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Keep this in mind; I'll be back very soon with a blog post on ecosystem strategy.

I know what some of you are thinking - "Well, did America have a soul to begin with?" I happen to think it did. For me the soul of America is "We, the people..."

Furthermore, I'm quite sure that people, as defined by our founders, did not mean corporations. (See what Charles Handy has to say >>)

But to get back to the topic of inclusivity, I'd like to make a shameless plug for our new book, co-authored with University of Michigan's Professor Michael Gordon, called Inclusivity: Will America Find Its Soul Again?

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BUY now >>


So what's all the fuss about? The book is about asking questions:

  • How can companies take better care of their employees--and thrive?
  • Why don't they see the opportunities in creating social value?
  • Do Americans think we have a fair distribution of wealth?
  • What are new means of putting our collective talents to work?
  • How can communities take the lead in creating opportunity?
  • How can public education prepare all students for the future?
  • How can better health care be made available without doctors?
  • How can communities do something about global warming?
  • How can you make a difference?
  • Why should you care?

Inclusivity: Will America Find Its Soul Again is a book of questions, hints, and suggestions about creating more opportunity for more people--starting with the USA, but looking at and learning from the rest of the world.

The very idea of the "United" States is based on the principles of inclusivity--all men and women are created equal under the law. But we seem to have lost our conviction that inclusivity is possible or even to be desired. The current divisive political climate, along with economic uncertainty, has fostered an atmosphere of fear and narrow-mindedness across the country.

What can we do in the face of this reality? The choice is not easy, but it is clear. Either we will decide to be more inclusive, or we will turn against each other - finding reasons to divide ourselves, not just from each other as citizens, but also from a shared future.

The USA, unless we decide otherwise, will become simply the SA.

This book is dedicated to an inclusive future for all our children, including my daughters M and K, and the idea that the United States is still the last best hope for democracy and inclusivity. We won't have one without the other.

The book includes the following sections:

  • What Is INCLUSIVITY?
  • Inclusive World
  • Inclusive Entrepreneur
  • Inclusive Economy
  • Inclusive Cities
  • Inclusive Education
  • Inclusive Health
  • Inclusive Leadership
  • Inclusive Future
Let us know what you think!

P.S. - We don't want this, do we?

I'm guilty. 

I go to my local bookstore, drink a coffee and browse the shelves. When I get home, I rush to the computer and buy the books I fancied - online! If it's a business book, I download a copy on my digital reader, and if it's a literary work, I buy the physical book at a discounted price. 

As a way to assuage my guilt, I've thought of some ways to help my local bookstore survive - because, like so many of us, I love the physical bookstore experience - nothing beats the Zen practice of disinterested info-grazing - and I'd like to continue to enjoy it.

However, I notice at my local Barnes & Noble that they're busy selling Nook ereaders in every cranny. [Do they really think they can compete with the iPad or even Kindle?] Is this really going to save the physical store?  Nope. 

Most likely, it's an idea dreamt up by the financial types at headquarters who've been "missioned" to tap into the digital value-stream. After all, why should B&N just stand there and watch their profits drift lazily down a South American river? It's important to note that despite B&N saying the Nook is a "success," they still rely on brick and mortar stores (retail and college bookstores) for over 75% of their revenue and the competition is going to become even more intense with dozens of new tablet and reader devices being introduced this year.

And how does B&N take a trip down the Nile? Apparently, the secret sauce is that they allow Nook owners to take their devices into any B&N physical store and read any e-book for free. Nooktalk tells us  that in reality, it's not exactly a seamless reading experience.  And now that Amazon allows Kindle owners to "lend" books to each other, the Nook may find itself in the, ahem, corner.

So what can your local bookstore do to take advantage of its strengths? 

Here are three suggestions to shake up the physical bookstore business model:

Daily Book Rental
Why can't the bookstore become a pay-as-you-read library? As a kid growing up in India, I remember borrowing books (alright, some these were Asterix and Tintin comics) from the bookstore for a daily fee.  This business model shows some reverse innovation promise. Can you imagine "tiered pricing" linked to free coffee rewards?  Sign up for the all-you-can-read buffet. And of course, we get to pay fines if we return our books late.

Publish and Distribute Local Books
What if a physical copy of your book gets published in-store and sold in your town's bookstore?  Can you visualize a "Newbie Authors" section where one copy of your book gets to sit on the shelf for a week?  If it doesn't sell in a week, you can either pay for shelf space or you can buy your books back.  The minute you or your mother buys your Great American Novel, a new one is printed and placed on the shelf. The top 5 bestsellers in each town get national distribution and placement for a week.  Book fest!

Nurture Communities of Interest
Some book stores think they are already doing this by sponsoring author readings and cheese tasting events.  But what we need is more focused on the actual needs and interests of the customer - practical and impractical.  Here are some examples of the types of participatory communities that could be grown and nurtured in your local bookstore:

  • Healthy Living
  • Relationships
  • Entrepreneurship
  • Food + Wine
  • Storytelling/Writing
  • Music
  • Art History
  • Travel

How does a bookstore do this?  If you're Barnes and Noble, you could hire retired teachers to do this; pick people who are enthusiastic and spread their love of the subject.  If you're a small bookstore, you can still find enthusiastic community leaders to do the same - in fact you can specialize, and create a niche around the main clientele in your store.

Does all of this sound a bit off the wall?  Good, then it's worth a try.  The Nook, I'm sorry to say, isn't going to save Barnes & Noble.

P.S. Over at HBR, Sarah Green gives us another suggestion: Amazon should partner with Independent Bookstores!

Michael Gordon's book, Design Your Life, Change the World: Your Path as a Social Entrepreneur [A GUIDE for CHANGEMAKERS] is for changemakers - the people and organizations that want to make a difference in the world. 

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The book tries to answer two questions, says Professor Gordon:

1) How can organizations best address important societal problems such as poverty, inadequate health care, sub-par education, and an unhealthy planet?

2) What's the best advice for students who want to address these issues and still live lives of relative comfort?

The reason I'm helping the professor is because now, more than ever, we need the brightest students to tackle the world's biggest problems. And the oil-coal-nuclear lobby isn't making things any easier...

Are you a changemaker?  Go find out >> 

P.S. - you can download the PDF version here >>

I don’t watch TV much but I just caught a clip of Richard Branson promoting his book Screw Business As Usual. Looks like he’s on the same page as Stuart Hart - who has been essentially saying the same thing for twenty years.  They ought to compare notes!

What was funny was watching Branson sit there as the producers had him wait and wait for his three minute interview.  He was clearly in distress - the anguish of the entrepreneur who can’t bear to waste time - as he smiled and waved every time they turned the camera on him. 

The book is available later this month… have a Happy Green Christmas!

Watch:

The book that tells the story is Born to Run: A Hidden Tribe, Superathletes, and the Greatest Race the World Has Never Seen. It's truly inspirational, as is the story told by Will Harlan - he's in the video - about his encounter with the Raramuri, the Running People.

Of course, the main man is Caballo Blanco. Check out Norawas as well.

Now, where's my Iskiate?

Step one: Know who you are...

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borrowed from Alina Wheeler's Designing Brand Identity: An Essential Guide for the Whole Branding Team  >>

This is a digital reprint of an interview I did about ten years ago with UC Berkeley’s Hal Varian. At the time Varian was co-author of a bestseller: Information Rules: A Strategic Guide to the Network Economy; it’s still worth reading today. Today he’s the Chief Economist at Google. There are still a number of good things in this interview that the media companies could learn from…  (I’m a bit embarrassed by the silliness of my questions, but hey.)

I suppose we should begin by asking you for your definition of “information” and what you call “information goods”.

When we talk about information goods, we mean anything that can be digitized. Text, pictures, moving images, sound, all the media that can be delivered over a digital connection. Some people call them digital goods.

Information goods have some interesting properties. On the supply side there’s normally a big fixed cost to create the first copy, of say a movie, and then a negligible cost to create additional copies. On the demand side, the interesting feature is that you don’t really know what information is until after you’ve consumed it. So you have to experience it to know what it is.

When you’re selling information, you’re dealing with how do you give free samples, how do you give part of it away, how do you establish a reputation so people will purchase the information you’re providing, etc. etc.

I read about a travel publishing company that put its contents on-line, and their book sales went up, because people wanted the books with them when they traveled…

Yes. Another example is the National Academy of Sciences. They found when they put all their content on line and people could actually look at what the content was, they were more likely to buy.

What are some of the techniques you find companies use to create and sell information products? How do you sell an information product to different customers at different prices? How do you find out what the different customers will pay? Can you do this on a website?

The trick is to “version” your information product: construct a product line of your information goods that will appeal to different market segments. A common way to do this is to use delay: issue a book first in hardback, then, a few months later issue a cheaper edition in paperback. The people who are really interested will get the hardback, whereas people who are only casually interested will wait.

We see financial sites on the Web that sell real-time stock quotes, but give away quotes that are 20-minutes delayed. A movie first comes out first in the theater then six months later in video.

Then there are other things, user-interface, for example. If you look at Dialog, which is a search company, they have two types of search engines- one is a professional search engine, with Boolean searches and all sorts of options, and then they have an “ordinary-person” search engine, with a stripped down interface. It’s nice because the ordinary person wants to use the simpler interface, while the paying professional uses the professional interface. So there isn’t any cross-market cannibalization.

Other dimensions on which to version your product are user convenience, image resolution, capability, features, tech support, etc.

You mention Gresham’s Law of Information in your book. What is it?

Gresham’s law said “bad money crowds out good”. We coined “Gresham’s Law of Information” which says “bad information crowds out good”. Low-quality, cheap information can displace high-quality, authoritative information: look what happened with Encarta and Britannica. However, Britannica is now fighting back and has come out with products that are much better suited to computer use. Smart consumers will look for quality information.

Your example of the struggle between Encarta and Britannica, how Britannica lost out to the upstart $49 Encarta…

Right, although they’re coming back. They’re doing some clever things now. What happens there is the incumbent in the industry has a very low marginal cost, so they should be able to beat the entrant but they can’t quite change their business model. It’s hard. Telephone companies are having this problem, the print/publishing media is having this problem, TV networks have this problem vis-a-vis cable.

(This was before Wikipedia!)

Since there’s a high cost of innovation and a low cost of imitation on the web, isn’t it harder to keep “first-mover” advantages?

You’re right, we talk about this — the competition is only a click away. But the clever company, which has that first-mover advantage, will try its best to create “lock-in” for their customer base. For example, look at what Amazon has done- one click ordering, keeping information on what you purchase so they can recommend books to you. If Amazon is recommending good books to me and I want to switch to say Barnes & Noble, I have to start all over.

Another good example of that is e-toys. You put in the birthday of your nephew, your neice, and your cousins, whatever, and they send you a reminder that your nephew’s birthday is coming up and here’s a nice stuffed rabbit that’s very popular with children in his age group.

Can you tell us a little more about your lock-in strategies?

Since the competition is just a click away on the Web, it pays companies to invest in building customer loyalty. The best way to do this is to produce a product that is so much better than the competition that they don’t want to switch! But there are other ways too, such as loyalty programs, like frequent flyer programs that reward frequent purchasers.

What about lock-in strategies for suppliers and partners?

What we were thinking about there was that if you have a group of loyal customers that are purchasing your products, and there may be other complementary products that they would also purchase, but you may not be the best firm to supply that. So then what you do is sell access to your customers.

The portal companies are doing this. For example, I go to Yahoo, and Yahoo charges other companies to have access to me. Let’s say e-toys wants to move into baby or children’s clothes. They might not do that themselves, but they could partner with other companies that do that.

So once you have a loyal customer base, then you can sell access to that customer base for other products that complement what you are selling.

What about the dangers in this, with privacy issues?

It’s certainly convenient for me to be reminded when my anniversary is or my nephew’s birthday or something. That’s a service, a good thing. Of course they can use the information about me in ways that could be detrimental- they could sell it to mailing lists and I get deluged by email. So the trick is to make sure that consumers give their consent; you want to know exactly how the information is going to be used by the company in question. There are companies like e-trust which meet a very important need.

I was looking at ANX, the auto-industry supplier network, and I found out that Chrysler, despite its enthusiasm during the pilot, isn’t part of the production version of ANX. And if you go to the Chrysler supplier website, you find they’ve created tons of business applications. So when does it make sense to join a standards organization and when does it make sense to go it alone?

There’s this fundamental equation that says that the value to you is your share of the market value times the size of the total market. So some of your actions, like standardization, can increase the total size of the market, but it can decrease your market share because it creates more competition. So you have to trade-off these two effects.

So you’re saying if the total size of the market gets bigger, and you make a bigger profit despite a lower market share, then you are on to something… How do you protect intellectual property on the web? Will the current move of providing patent protection to internet business models help or hurt the future of e-commerce?

The point is to maximize the value of your intellectual property, not maximize its protection. You can charge a lot lower price for content on the Web because you can reach a much larger audience.

I’m quite unenthusiastic about patent protection for Internet business models and feel that it will retard progress in this area.

(Like I said, my questions are quite stupid, but the versioning of information goods - that’s still something the media companies can learn about! This cartoon was also done about the same time…)

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Finally, to get you up to speed, here’s a decent interview with Prof. Varian with the global-warming deniers at Superfreakonomics >>

The first thing you should know about Amartya Sen is that he was born in Shantiniketan, and was give his first name by Tagore. Click on the two links for more on Professor Sen and his Nobel prize.

His latest book, The Idea of Justice, is a serious re-examination of the foundations of justice from a global perspective. He speaks of the two definitions of justice in Sanskrit - niti (institutional justice) and nyaya (realized justice) - and how we are too often misled by the utopian vision of ideal justice, only to allow societal injustice all around us in our everyday lives. For Sen, justice must alleviate suffering.

Here's his lecture to the folks at The Carnegie Council (video here):

AMARTYA SEN: It is always an absolute delight for me to be back here at the Carnegie Council. I am very grateful to Joanne for being so kind and so welcoming. It's very nice to meet some old friends, familiar faces, and some new ones--Joel [Rosenthal] and other old friends, but a lot of new ones too. I am very grateful.

I am not going to go into the distinctions in the Indian epistemic and ethical literature so much, and will concentrate more on the European Enlightenment, but I will be very happy to go into those issues, which are discussed in the book, if it were to come up.

Ludwig Wittgenstein, the great philosopher, wrote in the preface to his first major book in philosophy, Tractatus Logico Philosophicus, published in 1921: "What can be said at all can be said clearly, and whereof one cannot speak thereof one must be silent."

Wittgenstein would reexamine this austere view on speech in his later work. But it is really wonderful that, even as he was writing the Tractatus, the great philosopher was marvelously inconsistent and did not always follow his own exacting commandments.

In a remarkably enigmatic letter to Paul Engelmann, written in 1917, Wittgenstein said: "I work quite diligently and wish that I were better and smarter, and those both are one and the same." Really, one and the same thing, being a better person and a smarter guy? I couldn't help asking, "Who is Wittgenstein kidding?"

I am, of course, aware that modern American usage has drowned the distinction between being good as a moral quality, and being well as a comment on a person's health--no aches and pains, fine blood pressure, and such--and I have long ceased worrying about the apparent immodesty of those of my friends who, when asked about how they are, reply with manifest self-praise, "I am very good."

But Wittgenstein was not American, and 1917 was well before the conquest of the world by vibrant American usage. So what was this pronouncement about?

Underlying Wittgenstein's claim may be the recognition in some form that many acts of nastiness are committed by people who are deluded in one way or another on the subject. It has been argued that some children carry out odd acts of brutality to others, other children or animals, precisely because of their inability to appreciate and understand adequately the nature and intensity of the pains of others. There is, perhaps, a strong connection between being antisocial and the inability to think clearly.

We cannot, of course, be really sure about what Wittgenstein meant. But if that is what Wittgenstein meant, he was in the powerful tradition of the European Enlightenment that saw clearheaded reasoning as the major ally of making societies decent and acceptable.

The leaders of thought in the Enlightenment did not, however, speak in one voice. In fact, there is a substantial dichotomy, which has not received sufficient attention, between two different lines of reasoning about justice, that can be seen among two groups of leading philosophers associated with the radical thought of the Enlightenment period.

One approach concentrated on identifying perfectly just social arrangements and took the characterization of "just" institutions to be the principal, and often the only, identified task of the theory of justice. This way of seeing justice is woven in different ways around the idea of a hypothetical "social contract," a hypothetical contract that the populations of a sovereign state are supposed to be party to.

Major contributions were made in this line of thinking, first by Thomas Hobbes in the 17th century, and later by John Locke, Jean-Jacques Rousseau, and Immanuel Kant, among others.

The contractarian approach has become the dominant influence in contemporary political philosophy, led by the most prominent political philosopher of our time, John Rawls, whose classic book, A Theory of Justice, published in 1971, presented a definitive statement on the social contract approach to justice.

The principal theories of justice in contemporary political philosophy--not just Rawls, also other friends of mine, Ronald Dworkin, Robert Nozick, David Gauthier, and many others I can think of--draw in one way or another on the social contract approach and concentrate on the search for ideal social institutions.

In contrast, a number of other Enlightenment theorists--Adam Smith, Marquis de Condorcet, Mary Wollstonecraft, Karl Marx, John Stuart Mill, for example, taking the Enlightenment to go into the 19th century too--took a variety of approaches that shared a common interest in making comparisons between different ways in which people's lives may go, jointly influenced by the working of institutions and people's actual behavior and their social interaction and other factors that significantly impact on what actually happens.

The analytical--and rather mathematical--discipline of "social choice theory," which has been actually my primary field of technical economic engagement, a theory which can be traced to the works of Condorcet in the 18th century, around the 1780s, but which has been developed in their present form under the leadership of Kenneth Arrow in the last century, belongs to this second line of investigation, in which I must admit I have been very involved. That approach, suitably adapted, can make a substantial contribution, I argue in this book, The Idea of Justice, to addressing questions about the enhancement of justice and the removal of injustice in the world today.

In this alternative approach we don't begin by asking what would a perfectly just society look like but asking, what remedial injustices could be seen on the removal of which there could be a reasoned agreement.

One of the limitations of the social-contract approach to justice--and there are many such limitations, but one of them--is the unjustified conviction that there could only be one precise combination of principles which forms the contract and, despite the implausibility of this assumption, this is needed for the social-contract approach to justice because it takes on the job of identifying uniquely a combination of ideal social institutions based on those principles.

In contrast with this rigid insistence in most contemporary theories of justice, the alternative of the social choice approach allows the possibility of a plurality of competing principles, each of which is given a status, after subjecting them all to critical examination. It is, of course, important--and I emphasize that point--to scrutinize critically all principles that are presented for our attention. Some principles may indeed get rejected after a searching probe, but more than one competing principle may actually survive on the basis of their reasoned justification.

For example, in my book I discuss a case in which three children compete for a flute--one demanding it on the ground that she alone can play the flute (the others had no clue how to play properly), another on the ground that she has no other toys to play with (while others are well supplied with amenities), and the third on the basis of the fact, which others don't dispute, that she had actually made the flute with her own labor. None of the claims are immediately dismissible, and a just arbritration has to weigh the claims of all these competing grounds. No mechanical priority of one ground, one principle, over the others may be convincing, and sometimes even at the end of the debate an element of arbitrariness may be left in the decision process.

Thanks to this plurality of surviving principles, we may not be able to resolve on grounds of justice alone all the questions about public policy that may be asked, for example, whether a 40 percent top tax rate is more just--or less just--than a 41 percent top rate. And yet, we have every reason to try to see whether we can get reasoned agreement on removing what can be identified as clear injustice in the world, such as slavery or the subjugation of women; or extreme exploitation of vulnerable labor, which so engaged Adam Smith, Condorcet, Mary Wollstonecraft, and later John Stuart Mill and Karl Marx; or gross medical neglect of the bulk of the population today through the absence of medical facilities in parts of Africa or Asia, or the lack of universal health coverage in most countries in the world, including, alas, the United States of America; or the prevalence of torture, which continues to be used with remarkable frequency in the contemporary world, sometimes practiced by the pillars of the global establishment; or the quiet tolerance of chronic hunger, for example in India, despite the successful abolition of famine.

I have so far been discussing the subject matter of public deliberation and justice. There is also an important question about participation. Whose voices should count in interacting public discourse on the demands of justice?

In the social contract tradition, the views that must receive attention, and only those, have to come from those who can be seen as parties to the social contract. Given the country-by-country and nation-by-nation structure of social contract, powerfully identified by Thomas Hobbes and pursued in mainstream contemporary political philosophy, the contractarian tradition tends to confine the discussion to members of a country or a polity or a state, in particular the citizens of each country who are engaged in deciding on the ideal institutions and corresponding values for that particular sovereign state. The need for impartiality in the treatment of different citizens within the country is accepted and celebrated, but there is no secure place in this formulation of deliberations of justice to go beyond the citizens of a particular state. This is called "closed impartiality," as I do in my book, where impartial consideration is confined and closed to the citizens only.

We can contrast this with Adam Smith's powerful insistence in his Theory of Moral Sentiments, but also in The Wealth of Nations and his Lectures on Jurisprudence, on the necessity to pay attention to the views of people from far as well as near. This can be called "open impartiality."

I should perhaps mention here that Penguin Books is publishing a 250th-year edition of The Theory of Moral Sentiments, in which I wrote a long introduction. This should come out, I think, in November. We will discuss that. The book was published in 1759. I argue why it remains immensely contemporary.

Smith saw that impartial consideration, which must be essential for justice, must demand going beyond the boundaries of each state.

There are two principal grounds for requiring that the encounter of public reasoning about justice should go beyond boundaries of a state or a region: (1) the relevance of other people's interests which may be affected by our actions, by what we do; and (2) the pertinence of other people's perspectives, their understanding, to broaden our own investigation of relevant principles, for the sake of avoiding our own parochialism based on the values and presumptions in the local community.

The first ground, related to the interdependence of interest, motivated Adam Smith to chastise the injustice of early British rule in India in the 18th century, describing the East India Company as being altogether unfit to govern its territory. In today's interdependent world, it is easy to appreciate the need to consider the interdependence of interests, whether we consider the challenges posed by terrorism or by global warming or by the world economic crisis that we are currently experiencing. Confining our attention to national interest only cannot be the basis of understanding the demands of justice. Also, AIDS and other epidemics move from country to country and from continent to continent. And, on the other side, the medicines developed and produced in some parts of the world are extremely important for the lives and freedom of people far away if they can afford to buy these medicines.

In addition to the global features of interdependent interest, there is a second ground I must emphasize, that of avoidance of the trap of parochialism to which Smith referred. This is accepting the necessity of taking an open approach to examining the demands of impartiality.

If the discussion of the demand for justice is confined to a particular locality--a country, or even a larger region than that--there is a possible danger of ignoring or neglecting many challenging counterexamples that might not have come up in local political debates or been accommodated in the discourses confined to the local culture but which are eminently worth considering in an impartial perspective.

Smith was particularly concerned about avoiding the grip of parochialism in jurisprudence and in moral and political reasoning. In the chapter properly entitled, "On the Influence of Custom and Fashion upon the Sentiment of Moral Approbation and Disapprobation" in The Theory of Moral Sentiments, Smith gives various examples of how discussions confined within a given society can be fatally limited by parochial understanding.

I quote from Adam Smith, and it's a longish quote:

....the murder of new-born infants, was a practice allowed of in almost all the states of Greece, even among the polite and civilized Athenians... . Uninterrupted custom had by this time so thoroughly authorized the practice, that not only the loose maxims of the world tolerated this barbarous prerogative, but even the doctrine of philosophers, which ought to have been more just and accurate, was led away by the established custom, and upon this, as upon many other occasions, instead of censuring, supported the horrible abuse, by far-fetched considerations of public utility. Aristotle talks of it as of what the magistrate ought upon many occasions to encourage.... The humane Plato is of the same opinion, and, with all that love of mankind which seems to animate all his writings, no where marks this practice with disapprobation.

While Smith's example of infanticide remains sadly contemporary even today, though only in a few countries, in a few societies, some of his other concerns have relevance to many other contemporary societies as well. For example, it applies to Smith's general insistence: "The eyes of the rest of mankind must be invoked to understand whether a punishment appears equitable."

Scrutiny from a "distance" may be useful for practices as different as the stoning of adulterous women in Taliban Afghanistan; selective abortion of female fetuses in China, Korea, and parts of India; and plentiful use of capital punishment in China, or for that matter the United States, which by the way is the fourth country in terms of frequency of capital punishment, following China, Iran, and Saudi Arabia.

The relevance of distant perspectives has a clear bearing on some current debates in the United States; for example, that in the U.S. Supreme Court not long ago on the appropriateness of death sentence for crimes committed by a person in his juvenile years, whether such a person could be executed for a crime committed when you were a minor, but the moment you become major, whether you could be executed then.

The demands of justice being seen to be done, even in a country like the United States, cannot entirely neglect the understanding that may be generated by asking questions about how the problem is assessed in other countries in the world, all the way from Europe and Brazil to India and Japan.

The majority judgment of the U.S. Supreme Court, as it happened at that time, ruled by a 5-4 majority against the use of death sentence for a crime that was committed in juvenile years, even though the execution occurs after the person reaches adulthood--though the judgment would almost certainly have been different today, as we know from the newly elected, when I was writing the book, Chief Justice Roberts' opinion on the subject, who made it absolutely clear that American judges should not be influenced by judgments and legal debates occurring elsewhere.

In denying the appropriateness of capital punishment in this case, the majority of the Supreme Court did not simply--I quote from Justice Scalia, who wrote a then-minority report--they did not simply "defer to like-minded foreigners."

Scrutiny from "a distance" can be very useful for reasons that Adam Smith analyzed in order to arrive at grounded but non-parochial justice, taking note of questions and arguments that consideration of non-local perspectives can help to focus on.

It is important, however, to recognize that to listen to distant voices, which is part of Adam Smith's exercise of invoking the "impartial spectator" in The Theory of Moral Sentiments, does not require us to be respectful of every argument that may come from abroad. That would be absurd. We may reject a great many of the proposed arguments, sometimes even all of them, and yet there would remain particular cases of reasoning that could make us reconsider our own understandings and views linked with the experiences and conventions entrenched in a given country or culture.

The interdependence of reasoning is part of the ground on which Martin Luther King Jr. said in "The Letter from Birmingham Jail" in April 1963: "Injustice anywhere is a threat to justice everywhere."

Acts of public agitation, news commentary, open discussion, are among the ways in which global democracy can be pursued, even without waiting for the global state. The challenge today is the strengthening of this already-functioning participatory process on which the pursuit of global justice will, I argue, to a great extent depend. It is not a negligible cause, nor, I would argue, is it beyond our reach.

Thank you.

Questions and Answers
QUESTION: I have two questions, if you will allow.

One is in international law there is the concept of jus ad bellum and just war. That, of course, is a very, very old concept. How would you talk about this in the 21st century? Some people will argue that with the current methods of warfare there is no more just war possible. And of course, the opposite point has also been made in several contexts.

My second question is: In the case of criminal justice, how would you see in a way the balance, because of course one dimension is the very strict application of rules that are laid down in legislation and in laws, and another dimension is the public perception that justice is done. I was born in Switzerland, in Zurich, where Roman Polanski was arrested last weekend. I think that the debate that is going on there is along those lines. What is justice in his particular case?

AMARTYA SEN: Difficult questions.

Let me give a general concept first. I think in each of these cases--for example, whether there is such a thing of just war--the approach I am trying to suggest is not whether in fact you accept certain things as just war and certain other things as not, but to say that if it is to be determined, it has to be determined on the basis of a reasoning as to whether it has reason enough to be counted to be a war that is just. Whether there will be any such war, given the nature of technology today, remains an open question. My guess would be probably not.

On the other hand, I am not closing this. It is not a public pronouncement book; it is a method book, to say there is something to discuss.

But it is not just today. One of the examples which I do discuss, a clearly just war, a long time ago, in the Indian epic Mahabharata, where a kingdom had been wrongly usurped by cousins who were quite naughty, and the just, those who can rightly rule the kingdom, the Pandavas, were trying to regain it. Arjun is the great warrior, the third brother, who would actually lead the forces, ready to fight and defeat the army on the other side. It was clearly a just war. The document called Bhagavad Gita is about that. Arjun says, "Is this right for me? Is this really a just war? Because, after all, it's true that they shouldn't have the kingdom, it's true we will win the war, it's true we will have the better rule; but how many people would actually die in this? Is it worth doing it? [inaudible]--this is a document from about 3rd century B.C.--and is this really just? Now, Krishna argues against, saying that you ought to do your duty. And as far as the religious document goes, it ends with Arjun saying that he accepts Krishna's argument, he would fight. He fights, wins, and the war is over.

On the other hand, if you look at the first part of the Gita--that is not part of the Mahabharata, it's a little bit of a very big epic, seven times the size of the Iliad and Odyssey put together--you find that there are strong arguments given by Arjun which are not fully rebutted by Krishna, as to why there is no such thing as a just war which involves a lot of killing, and your point is an extension of that.

And Mahabharata itself remains ambiguous, even the last scene. The right side has won, but there is a sense of pathos everywhere and as the brothers walk through the Indo-European valley they notice funeral pyres burning everywhere, women weeping for the men who have died in the battle, the bloody war. It doesn't end in a sense of triumph. It ends in a sense of profound confusion. So that it's not clear, even though from the religious point of view people have tended to say, including Mahatma Gandhi, that Krishna was completely the victim.

But it isn't clear that, in terms of argument, that argument is actually closed. I'm not saying that Arjun shouldn't have fought the war, but I am saying that the argument that you are presenting, of technology and brutality and death, is an extension. It remained valid then and it remains extremely valid now.

Now, whether at the end of it you come to the conclusion there is no such thing as just war, whether what is being waged in Afghanistan could be called a just war, given the likely consequence of what will happen if suddenly the war is ended and the Taliban comes back in power in Afghanistan, is a complex question.

But these arguments matter. That is what I am trying to argue. And it has to be global reasoning--not the coalition of the willing, but a general public discussion. As you know, many countries in Europe were opposed, many other countries in Asia and Africa were opposed, and there was something to discuss, which was not discussed in this form. This was a declaratory war. That is what I am arguing against.

The second thing, on the criminal justice system, I think there are two things: One is whether the rules are just; and the other is what the perception of justice is in the population.

Now, Switzerland, of course, the perception of justice is very strong. I remember being very frustrated when I was trying to go to a restaurant rather late and the only place I could park my rented car had "no parking" in it. As I often do in England and in America, I thought I would leave it and pay the fine. But then as I was getting out somebody came and told me, "No, no, this is no parking." So I said, "I am parking." He said, "No, you don't understand, it's no parking." I said, "I'll pay the fine." He said, "No, no, but it's no parking, no parking."

So I think the perception of rule is very strong in Switzerland, which is a very positive thing. In this particular case, it had some negative things. I was hopelessly late to my dinner. I would much have preferred to have paid my $125, or whatever it is I would have been charged. But it didn't happen.

So I think we have to look at the perception of rules as well as the acceptability of the rules, and the same method, the argumentative method, in dealing with this issue.

QUESTION: Professor Sen, that was tremendously enlightening. I thought the distinction that you made between these two different lines of Enlightenment thinking was really illuminating. But of course, one of the appeals of the first line is that they provide you with a kind of machine for moral reasoning. So you take the categorical imperative or you take the veil of ignorance and you apply it to welfare reform and you have an answer.

So when you talked about the things that we can say are obviously unjust, from slavery to some people not having healthcare, given that you said these machines are much too blunt instruments, what is the means whereby you can come to the conclusion that these obviously morally unacceptable things are in fact obviously morally unacceptable?

AMARTYA SEN: A very good question.

I think what is interesting about the categorical imperative--as I discuss in my introduction to The Theory of Moral Sentiments, Adam Smith was discussing that about 20 years earlier than Kant. In fact, Kant refers to Smith's work in his book on anthropology as well as in letters. One of them is to Markus Herz, about ten years before Kant wrote The Critique. Herz wrote to him, saying, "This guy, this Englishman Smith," as he described this proud Scotsman, "whose work you admire so much, et cetera."

This is really the argument about the impartial spectator. What happens in the case of Kant, he then uses this device, but uses it with a sophistication that is breathtaking, but then arrives at a strong conclusion, like the way people have tended to do in philosophy earlier, like Aristotle--there are different kinds of life and there is a gradation; the life of contemplation is the highest, and then the others.

Whereas Smith ends in each of these cases with there is something to discuss, something to argue about in these cases: "I am quite convinced, sitting in Kirkcaldy, on the shore of the North Sea in Scotland, of this, but is this the way it would look to the Chinese, to the Indians, and to the Africans, et cetera?" Adam Smith was actually one of the persons who took a great interest in Africa, which people often forget. I have something on that in the book.

I think what he is arguing there is that you would not really expect to get a complete agreement on these things, but--and this is the point--you will get agreement on many of these issues which are extremely important to us, like abolition of slavery, like the tremendous neglect of the education of the working classes. He was very concerned about that.

People often forget that Smith was--his science was extraordinary. He took the view, which was completely naïve, of course, that there is no difference between one human being and another; everything is due to nurture, 100 percent nurture. Whether or not that is correct, what he was certainly right in is that nurture makes a big difference, which is really the point.

So he said there are huge things to be agreed on on these subjects, but despite the fact that we have many different arguments to present, we will have such arguments. Now, he was not a mathematician. What he was dealing with is what in social choice theory we call a partial ordering. You will agree on a partial ordering, not on a complete ordering.

Now, Kant and Locke and Rawls, and Dworkin today and Nozick, they all have complete ordering, and Smith does not. So that's the point.

So I think, yes indeed, the blunt device of categorical imperative, ignoring all argument, will deliver those things. But you don't need such a blunt instrument. Even with a finer instrument, you will be able to agree on some things, and those things on which you cannot agree you have to leave behind because there is not yet any agreement on that. That is roughly the position that Smith took and it is roughly the position that I believe is correct.

QUESTION: I jotted down the phrase you just offered about global reasoning and general public discourse and your assumption that that would lead to a positive outcome, sort of what the previous questioner just raised with you. Could you explain further what you mean by global reasoning? Is this some institution that you expect to have come into the world or some institutions that exist now? How is this to proceed? That's my broad question to you.

AMARTYA SEN: It's a very good question, too.

I think if you are looking for the institution to be set up first and then public discussion to take place, I don't think we will get anywhere. I think there is a kind of interdependence between them. Institutions come into being on the basis of public discussion, and then sometimes public discussions are useful even without the institution.

Let me give you an example. The Human Rights Commissions of India and South Africa, which carry a lot of the public discussion--they were, for example, at the lead of indicting the Hindu extremists in Gujarat. The Human Rights Commission played a big part. They are recognized legally in India. They are legal bodies.

In Pakistan there is a Human Rights Commission which is just an NGO. So institutionally it is not there yet. And yet, because of the fact that they can skillfully use public discourse, they could make a huge impact on public policy. And indeed, it has played a big role under the really visionary leadership of Asma Jahangir and Raman. It played that part.

One of the latest examples was that it is through them that some person in Swat Valley, when under the Taliban, this young woman was being caned for having done something that went against the Shariah, he managed very courageously to videotape it while pretending to make a telephone call. This is where modern technology came into it--not an institution, but the technology. It's only when that was put on the Pakistani television, GEO first and then all the others, and the Pakistani newspapers, that this sudden groundswell of opinion happened, which ultimately made the military move against the Taliban and against the conflict in Swat Valley.

So that happened through what I would describe as public reasoning--namely, presenting facts and argument to the public in a situation where the institution is utterly underdeveloped. There is no protection. Actually, my friend Asma Jahangir is under a death sentence from the Taliban, that anyone who kills her will be blessed.

So in this enormously courageous way people carry on dialogue. I am not looking for--you know, obviously it would be good to have a better system, and I prefer the Indian system whereby the Human Rights Commission can move even the Supreme Court. On the other hand, even if it doesn't exist, it is not a question of saying, "We are not there, give up." I mean in every situation, we try to do what we can to make a change.

And similarly in Iran, I think if you take the approach that I am doing, that the big way of thinking about how things might change in Iran would be to see how you could bring out the dissent that is already expressing itself in a bigger way, engaging that. And then there is always the fact that any intervention, even though American, has a dual effect: on one side it might frighten the government; on the other side it strengthens them by making the protestors look like American stooges.

So I think one has to look at all that picture and give public reasoning the recognition that is needed both in foreign policy as well as in our day-to-day activity.

When you talk with some of these people, when I used to be with Oxfam--I didn't do very much for them; actually they still say I am with them but I am not; I was for three years--I was really impressed by the way people in very adverse circumstances courageously were continuing.

When the American forces went into Afghanistan, we had 18 people of Oxfam operating within Afghanistan, at great risk to themselves. I remember the next morning--I am very active in the Nuclear Threat Initiative set up by Sam Nunn; it's a big group now, but he is the president of it--I remember being very impressed. Normally, I just listen to what Lugar or Sam Nunn has to say. But there was one occasion when suddenly I had more information because there were 18 of our kids in Afghanistan. I just had a morning call. I remember telling Ted Turner, who is actually the financer of that organization, "I know something which none of you know. Why? Because I happen to be connected with an NGO that's active and playing a hugely important role."

So that's the way, the amorphous way, in which public reasoning takes place across the world.

QUESTION: My question is about means and ends. It seems to me the conversation, both globally and in countries like this, is often about means. Globally we talk about aid or free markets to end poverty. Here in America we talk about the role of government or insurance to deal with healthcare. This emphasis seems to de-emphasize ends--namely, the necessity of just outcomes, the necessity of the quality, the necessity of dealing with poverty.

First of all, do you agree with that observation? Secondly, how do we promote an emphasis on ends, on the moral necessity of justice, and indeed the practical necessity of justice, because inequality and unjust outcomes in all kinds of political and economic ways promote instability?

AMARTYA SEN: Well, first of all, I agree very much that the focus on ends--not just in terms of health outcomes, but also the health freedom, namely whether you have the freedom to go and seek medical help when you need it; you're not obliged to seek it, but you have the freedom to do it. If you take freedom as the central concept of what capabilities you have, then you would like to look at how does the world work, what happens in the world, and what happens in the world are exactly the things that you want to emphasize and judge.

I would add to it the fact that the public discourse also sometimes misses out means in a big way. I mean of course here, as you know, the debate, the vilification of the European system, describing it as that no one has any choice of doctors, et cetera, was of course completely mistaken. But that is mistaken at a very simple level.

But at a more sophisticated level I think the American public discussion on healthcare has suffered far too much--I did try to write something in the New York Review of Books on that [see Capitalism Beyond the Crisis (March 2009)and Health Care, Elsewhere: An Exchange (July 2009)]--by concentrating on Canada rather than Europe, because the big difference is that in Canada you cannot have private insurance for other than some very limited purpose--dentistry, optometry, prescription medicines, and a private room--that's it.

Whereas in Europe you can buy private insurance. Now, you may debate whether it is good that people with money could buy private insurance. That is something to be discussed. On the other hand, (a) I don't think any system is going to be acceptable in America unless you allow that option; and (b) there is an ethical issue. If a rich person is absolutely free to spend his or her money in buying a yacht and going to Acapulco and blowing the entire world with expenditure, why is it that a person can't buy insurance which covers him for optional surgery and so on?

So, bearing all that in mind, the natural thing would have been to look for a European alternative, which--the debate seems to always miss it--which is not the case. It is single payer, but it doesn't exclude private insurance. Everyone has the right to go and have that insurance, which has that feature, and at the same time you could buy private insurance. Many of the universities and many of the employers do it. I have private insurance, in fact, despite the fact that I am also entitled to the National Health Service.

There is no contradiction in that. There may be a general contradiction as to whether the rich should have a great advantage. We could have a debate on that. But I think this is just the kind of Smith territory--you may not agree on that, but you could agree on everyone being covered by a system like the National Health Service, which gives everyone entitlement. Whether on top of that you allow, like in Britain, private insurance or, like in Canada, no such private insurance except for optometry and dentistry, that is a further debate. But we need not resolve that debate in order to outline the importance of having healthcare guaranteed for all that you are referring to.

I'm glad you asked the question because I have been very frustrated by the way the public debate has gone. When I wrote the New York Review piece, the attacks came mostly from people who are so besotted with the Canadian system. A couple of my Canadian friends in Toronto wrote to me, "Are you turning anti-Canadian?" My point is that there is something that is not quite acceptable.

By the way, in Canada too it would be a very different situation if the United States went like Canada, because the options that are open--Canadians can buy American insurance, Blue Cross and so on, if they want to--those options will go.

So there are a whole lot of things to discuss. But that doesn't cloud the point that you were making, that ends are extremely important to discuss. But then again, we need also clarity and more information on the means.

QUESTION: You have mentioned and you cited the U.S. Supreme Court in your excellent remarks. I wonder if you think that the general system of high courts is a model that comes close to your ideal of a social contract, this ultimate dispenser of justice. For example, we have a court that is thoroughly governed by legal and constitutional mandates, it would seem. The British, on the other hand, not having had a constitution, have no high court other than the Lords of Justice.

AMARTYA SEN: But they are setting up one now.

QUESTIONER: They seem to get along rather well with their Crown judges. How has this general system of high courts, that model, in your view carried out justice?

AMARTYA SEN: I believe--this is just my personal view--that I think having a high court like the Supreme Court serves a purpose which the United Kingdom does miss out on.

It occurred to me, for example, many years ago actually, a friend of mine, a colleague at All Souls College, Lord Wilberforce, gave a big judgment that if the immigration officer thinks or suspects that you have been trying to illegally enter the country, he can on the basis of that suspicion detain you, and then you will be taken to the remand center, and you cannot move a court, because, although you are on British soil you have not been admitted, and therefore you cannot move British law to protest against this. So you could be held, incarcerated.

This was ultimately changed. But for two or three years the Wilberforce ruling--actually his ancestor did a lot to free the slaves, but his own position was rather conservative on this kind of issue. It seems to me that it's a subject, that if it had been the United States, could have moved the court. Anyone could say that there is a Supreme Court in this country. If a guy is here, it would be for the Supreme Court to decide can we hear this.

But I think the United Kingdom recognized this. You have probably been reading about this in the papers. They have been setting up something rather similar. We have to see how it goes. So there are these methods.

But the other point to note is that the Supreme Court alone is never going to do it, as this example indicates. The Supreme Court has to listen to the argument that is going on.

On the point that Scalia made and Roberts made and Thomas made, namely that there is no argument for listening to foreigners, that is not the position of the American public. That was not the position of Jefferson. He was ready to listen to many of the Enlightenment figures. The American public has been willing to listen to foreigners from Jesus Christ to Edmund Burke, again and again, without saying, "They're foreigners; they have nothing to offer in this case."

So I think as long as we don't regard the Supreme Court to be just supreme but as a part of the discourse, then I think we are moving into the Smithean direction I would like to push them in. That is what I would suggest.

I think it is a better structure. Personally I think it can focus argument. I think the Europeans have come to accept that now.

But on the other hand, it's not alone. The institutions never will deliver you. You have to bring in the behavioral features, and that's why The Moral Sentiments of Smith is so concerned with behavior, not just institutions. It's a dual feature.

That, by the one, is one of the parting of ways between Kant and Smith, that behavior remains extremely important. Whereas ultimately Kant says it's quite clear that you have these categorical imperatives you must follow, institutions aside--if everyone is following categorical imperatives, what will be the best institution?--Smith argues that is not the right question. A lot of people want it. What kind of institution do you need here and now, taking into account the variety of people and their precommitments?

QUESTION: How would you apply your approach to current issues of global governance, both in terms of institutions and processes, for example, to the greater voice of developing countries in various institutions like the IMF, the World Bank, the WTO, and so forth, or the arguments about greater policy space for developing countries in designing their economic, particularly macroeconomic, policies?

AMARTYA SEN: I think one of the gentlemen raised the issue of what the ends are. The end is to have a much more open public discussion. But you are not going to get it everywhere.

Along with Camdessus and others, I was one of the members of the IMF Governance Reform Committee, chaired by Trevor Manuel.

We did ask for a better representation. But it wouldn't be a representation of all countries, but rather those countries which are IMF-wise quite important. Similarly, I welcomed the move from G-8 to G-20. These are moves in the right direction. If I was a person only looking for perfect justice, then that is not there yet. But I think one has to welcome the changes going in that direction.

But then again, you have to also emphasize that is not there. For example, take G-20. It gives a much bigger voice to China, to India, to Brazil, to South Africa. But when the Doha Round was busted a little over a year ago, a year and a half ago, that was really driven by the interests of India and China. They did not want that basically. I'm sorry. Forgive me, Ambassador. I'm a very loyal Indian citizen.

I think the African countries had achieved something in that deal, if it had gone through. I think it is to the disgrace of the United States and Europe that they were not accepting the demands that were being made by the Chinese and the Indians and Brazilians. But nevertheless, I think by busting it, what these more powerful, more dynamic developing countries did has not served the interests of the less dynamic, in many ways more stuck-in-the-mud, poorer countries in Africa.

So I think one has to bear that in mind. Ultimately, whether we go to a G-100 or G-200 is not the question. The question is how can those voices come in. That is the way I would tend to look at global governance.

The wrong way to look at it, as of course is often seen even among philosophical colleagues whom I respect, is how to have a global government involving all the social contacts of the world. I think that is absolutely getting us nowhere whatsoever.

It's a question of how we can change the institutional structure. IMF will be harder to bend than the UN. The World Bank may be somewhere coming in between. So it's a question of seeing what we can do.

And a lot of things which are not institutional--the media, the public discussion. I think the media's role is enormously underestimated in the world. Even when people think about how to improve voices--and I have been seen the position of newspapers in many countries, from Uganda to India--pretty much all the dissenting voices are cash-strapped. They have very little money. And they are really trivial sums of money in comparison to the amount of aid going around. But while you can easily justify feeding the hungry, it becomes very difficult for these organizations to justify supporting the institutions.

Then it takes the form, as it did at one stage for UNESCO, you may remember, when the head of UNESCO wanted to achieve equality by simply shutting out the Western papers, like BBC, which, after all, provide about the only information that may be available in some places like Iran and Afghanistan today.

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Book reviews worth reading:

- Book Of The Week: The Idea of Justice, By Amartya Sen The Independent

- Book review: The Idea of Justice Financial Times

- The Idea of Justice by Amartya Sen Times Online

- "I Prefer To Fight Today's Battles" interview in Outlook India

I wonder what the late Peter Drucker would have said about Michael Moore’s Capitalism: A Love Story?

I think he’d be very sympathetic. Drucker’s disillusionment with the level of executive greed he saw and we see today makes it very likely that he’d be a supportive fan.

And here’s an interesting quote from the man himself:

The leader cannot act in his own interests.It must be the in the interests of the customer and the worker. This is the great weakness of American management today.

[from A Class with Drucker: The Lost Lessons of the World’s Greatest Management Teacher, William A. Cohen, AMACOM 2008]


When results are poor, executives don’t deserve bonuses, right Peter?

I have to say the story of Jung's Red Book is fascinating.

But what really stunned me was what the book actually looks like:

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A work of art, surely, but we are about to learn a lot more about dreams. And reality.

Do you have a book of dreams?

There was disturbing report at the beginning of the week which said that Mein Kampf was flying off the bookshelves in New Delhi, fueled by demand from students "who see it as a self-improvement and management strategy guide for aspiring business leaders, and who were happy to cite it as an inspiration."

I don't think so.

In my view, this is merely the latest round in the political extremism which is being fomented by groups like the BJP and thugs like Varun Gandhi.

When politicians use race, religion, and background to divide people and win votes, you know we're in a bad place. It doesn't matter if it's the Republicans or the BJP using these tactics, it's just plain evil.

We don't need another Sanjay Gandhi.

There are plenty of candidates out there vying to be India's Hitler. The question is: where is India's Obama?

Tata Nano or not, India still has a long way to go to get to Satyameva Jayate

Will a real Gandhi please stand up?

I think I spend too much time doodling and not enough writing.

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I hereby resolve to get this book thing done once and for all.

The Tao that can be blogged is not the eternal Tao. Or is it?

The great thing about working for myself is that I get to work with people (and companies) I like. In this case, I've been asked by Penguin Press to promote Stephen Mitchell's latest work: The Second Book of the Tao.

Stephen Mitchell is a quiet soul. The last gentleman. He's definitely not the self-promoting type. So it was with some difficulty that we got him to talk about his first Tao (Tao Te Ching) and his newest masterpiece - The Second Book of the Tao.

The results are on YouTube!

Here Stephen talks about how The Second Book of The Tao came into being:

And here's an excerpt; Chapter 14 from The Second Book of The Tao:

Here's a little more about the book, adapted from the Penguin press release:

The Second Book of The Tao is a twenty-first-century form of ancient wisdom, bringing a sequel of the Tao Te Ching into the modern world. Alongside each translated passage, Stephen adds his own insights for contemporary readers.

"His meditations and provocative re-imagining of the original texts comprise a book that is both a companion volume and an anti-manual to the Tao Te Ching. Mitchell renders these ancient teachings at once modern, relevant, and timeless."

Agreed.

Learn to govern your mind, and the universe will govern itself.

Or, as Funkadelic might say, "Free Your Mind...And Your -ss Will Follow." (That wasn't in the Penguin press release)

To appreciate Mitchell's mind, see StephenMitchellBooks.com >>

And here are some stories about Stephen as told by his wife Byron Katie: here, here and here >>

Dr. Rothman's book The Barber In Modern Jewish Culture: A Genre of People, Places, and Things, With Illustrations is already out of in print.

Here's Dr. Rothman on YouTube:

Back in 1988 I did a little bit of research on "barbers in literature" for Dr. Rothman. I really enjoyed his classes - his Eighteenth Century Lit starring Samuel Johnson, and his Nobel Prize Winners in Lit class starring (for me) Garcia Marquez.

Back in the 80s it wasn't uncommon to see Donald Barthelme, Rosellen Brown, Ntozake Shange, and Edward Hirsch all walking around on campus. Those were the days of Homer Noodleman...

The edge has become the core.

That's the central idea presented by Anil Gupta and Haiyan Wang in their new book - Getting China and India Right: Strategies for Leveraging the World's Fastest Growing Economies for Global Advantage.

It's not enough to merely be present in India and China, argue the authors.

Their thesis: "...any Fortune 1000 company that is not busy figuring out how to leverage the rise of China and India to transform the entire company runs a serious risk of not being around as an independent entity within ten to fifteen years..."

China and India are different from all other countries in that they present four "stories" or opportunities rolled into one:

1) Mega Markets: they provide growth opportunities for every product and service

2) Cost Efficiency Platforms: with low wage rates, they can help reduce your global cost structure

3) Innovation Platforms: the talent pool of engineers and scientists can boost your firm's technical and innovation capabilities

4) Launching Pads for New Global Competitors: your next global competitors are likely to emerge from here

So what are you supposed to do?

The book guides you, chapter by chapter, to explore the following imperatives:

1) Compete in India and China simultaneously. Why? Four reasons: i) the growth trajectory for both countries places them as the world's top 4 and 5 markets for every product and service imaginable; ii) India and China offer (for the time being) complementary strengths in services and manufacturing respectively; iii) there are also remarkable similarities which help your company transfer learning from China to India and vice-versa, accelerating your success in both countries; and finally, iv) an integrated China and India strategy helps you reduce your political, economic, and intellectual property risks inherent in operating in just India or China.

2) Compete for mega market dominance through micro-customers. The authors show you how to compete at the top, middle and bottom of the pyramid in India and China. What I found especially interesting was the authors' insistence that innovation opportunities abound at the bottom of the pyramid and that companies should use this segment as a "learning laboratory" for the discovery of new business models!

3) Leverage China and India for global dominance. There are three opportunities: cost arbitrage, intellectual arbitrage, and business model innovation - each of which can help you build a global platform for competitive advantage.

4) Compete with the locals - the dragons and tigers. The authors show you how to defend yourself and compete against the emerging titans in India and China using three key strategic initiatives: i) attack these emerging titans on their own turf; ii) neutralize their supply-chain advantages by tapping into the cost effective and innovation opportunities available in both countries; and iii) pursue an integrated India plus China strategy which, oddly enough, is more difficult for the emerging players in both countries.

5) Compete for local talent. You must project a positive and visible presence in the local media and local academic institutions. You can offer better global career opportunities for employees outside of India and China. Finally, by being sensitive to cultural and social mores, your company can build strong emotional ties to employee families - spouses, and yes, parents! The authors also suggest you hire in second and third tier cities to achieve lower salary scales and reduced turnover rates. (Wuxi is calling!)

6) Rethink what it means to be a global enterprise. The authors give us four areas to rethink - global strategy, innovation, organization, and lastly, our very mindsets. They warn us to stay slightly ahead of the changes in each of these areas, lest we get left behind on the road to global competition.

This is not a light read, but it is an essential one for every manager or leader with global vision. What I haven't mentioned in this blog post is the detailed case studies and business examples the authors present to make their case.

Ignore the timely warnings and insightful lessons in this book, and chances are we'll see you on TV asking for a government bailout.

For more info, see Wang's blog here and this article in the Wall Street Journal>>

Farewell, John Updike

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Not the greatest of interviews, but it offers a few glimpses into his thought process:

R.I.P.

"When you drink of clear water, must you foul the rest with your feet?”
- Ezekiel 34:18

Better late than never: The Green Bible is now available in bookstores everywhere.

Dis ya version a no King James version.

I wonder if the Pope will read it? And weep?

More info >>

I have to say I was shocked when I saw the news about Michael Hammer. He was just sixty. Goes to show you how precious every second is. It may be that they need to do some process re-engineering up in heaven. Maybe make it more customer friendly or something...

Down here on Earth, process re-engineering isn't as fashionable as it used to be. And I wonder how many people got laid off because of Reengineering the Corporation: A Manifesto for Business Revolution (Collins Business Essentials).

But Hammer was misunderstood. His ideas were abused by company executives and the management consulting industry. Today his ideas live on in the heads of IT nerds and companies like Zara.

Where do you (and your company) stand? Check out the maturity models he created:
1) for process maturity, and 2) for enterprise maturity.

Too bad we didn't see the one on leadership maturity.

Here are some fun links:

- Put Processes First: Make High Performance Possible Michael Hammer
- Michael Hammer: A Tribute to the Guru of Operations Anand Raman
- Remembering Michael Hammer Tom Davenport

In the end, process matters. Even our buddy Drucker acknowledged that.

BTW, the other process guru who is still (very) alive and kicking isTom Davenport.

The irrationally exuberant Robert Schiller is back with a book called The Subprime Solution.

Don't have time for the book? Read the summary >>

Einstein's Mathematics

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"We all must from time to time make a sacrifice at the altar of stupidity for the entertainment of the deity and mankind."

OK.

Jean-Marie Gustave Le Clézio wins the Nobel. Is this literary globalism?

And yet, his language is his country!

Betcha Sarah Palin won't be reading his books... or anyone else's, for that matter!

Does death stimulate creativity? There's something in that - just ask Steve Jobs.

I've been following Ricardo Semler for many years now.

In 1993, in a fit of madness I slipped a copy of Maverick into the hands of Riley Bechtel - thinking as I did at the time, that this is the only way to get Bechtel to re-engineer itself. Of course I was a little too naive...

Today I don't think I could work at Semco because I'd rather work for myself. But if I had to get a corporate job again (heaven forbid) I'd choose Semco.

Question: when are they opening a "Semco-proper" office in the US? You can check Semco's company history here.

Anyway, the revolution has happened and it was televised. Here's what to expect:

And definitely check this out >> (Journeyman Pictures doesn't understand YouTube - hence the "Embedding disabled by request")

Open-capitalism is thriving at Semco, and one of these days, it will show up in your industry. What strikes me though is the fact that this model can be used in non-profits, in government (are you listening, Barack Obama?) and even in the fields without hope - like education. Apparently Bill Gates' foundation is keeping close tabs on Semler's schooling experiment.

We did this interview a year ago, but he's finally (and deservedly) hitting the best-seller lists - thanks to a strong internet-based campaign. The book >>

Why do you claim that "Trust" is the key leadership competency of the new global economy?
Covey: If you look at the nature of the world today, a foundational condition in Thomas Friedman's flat world is the presence of trust. Put simply, today's increasingly global marketplace puts a premium on true collaboration, teaming, relationships and partnering, and all these interdependencies require trust. In the book I point out that partnerships based on trust outperform partnerships based on contracts. Compliance does not foster innovation, trust does. You can't sustain long-term innovation, for example, in a climate of distrust.

In issue after issue, the data is clear: high trust organizations outperform low-trust organizations. Total return to shareholders in high trust organizations is almost three times higher than the return in low trust organizations.

So we assert that trust is clearly a key competency. A competency or skill that can be learned, taught, and improved and one that talent can be screened for.

Trust is the one thing that affects everything else you're doing. It's a performance multiplier which takes your trajectory upwards, for every activity you engage in, from strategy to execution.

How do you identify a high-trust or low-trust organizations?
Covey: Trust is a powerful accelerator to performance and when trust goes up, speed also goes up while cost comes down -- producing what we call a trust dividend. How do you know if you have a high trust culture? By observing the behavior of your people. In high trust, high performance companies, we observe the following behaviors:

• Information is shared openly
• Mistakes are tolerated and encouraged as a way of learning
• The culture is innovative and creative
• People are loyal to those who are absent
• People talk straight and confront real issues
• There is real communication and real collaboration
• People share credit abundantly and openly celebrate each others' success
• There are few “meetings after the meetings”
• Transparency is a practiced value
• People are candid and authentic
• There is a high degree of accountability
• There is palpable vitality and energy—people can feel the positive momentum

Another very visible indicator is the behavior of your customers and suppliers. What is your customer churn rate? Do you have a history of long-term customer and supplier relationships? What is your reputation or brand equity in your marketplace?

Conversely, when the trust is low, there's a trust tax which changes your trajectory downwards. In our work with organizations, we find that low-trust, low-performance organizations typically exhibit cultural behaviors like:

• Facts are manipulated or distorted
• Information and knowledge are withheld and hoarded
• People spin the truth to their advantage
• Getting the credit is very important
• New ideas are openly resisted and stifled
• Mistakes are covered up or covered over
• Most people are involved in a blame game, badmouthing others
• There is an abundance of “water cooler” talk
• There are numerous “meetings after the meetings”
• There are many “undiscussables”
• People tend to over-promise and under-deliver
• There are a lot of violated expectations for which people make many excuses
• People pretend bad things aren’t happening or are in denial
• The energy level is low
• People often feel unproductive tension—sometimes even fear

These behaviors are all taxes on performance.

The work we do is to establish trust as your organizational operating system. That's a high-tech metaphor, but it's appropriate. We know how trust works, how to measure it, how to establish it, grow it, extend it, and sustain it – with all stakeholders.

Why is trust such a hidden variable to many otherwise competent managers?
Covey: Unfortunately, too many executives believe the myths about trust. Myths like how trust is soft and is merely a social virtue. The reality is that trust is hard-edged and is an economic driver.

For instance, strategy is important, but trust is the hidden variable. On paper you can have clarity around your objectives, but in a low-trust environment, your strategy won't be executed. We find the trust tax shows up in a variety of ways including fraud, bureaucracy, politics, turnover, and disengagement, where people quit mentally, but stay physically. The trust tax is real.

The rest of the interview is available at the Emory Marketing Institute website >>

Why do so many global strategies fail—despite companies’ powerful brands and other border-crossing advantages?

Seduced by market size, the illusion of a borderless, “flat” world, and the allure of similarities, firms launch one-size-fits-all strategies.

But cross-border differences are larger than we often assume, explains Pankaj Ghemawat in his new book: Redefining Global Strategy. Most economic activity—including direct investment, tourism, and communication—happens locally, not internationally.

Here's Ghemawat's take on globaloney >>

Here's his globaloney quiz:

Do you basically agree or disagree with the following statements:

1. Competing the same way everywhere is the purest form of global strategy (Uniformity)
2. The truly global company has no home base (Statelessness)
3. Globalization tends to make industries become more concentrated (Consolidation)
4. Globalization offers virtually limitless growth opportunities (Endless Growth)
5. Global expansion is an imperative rather than an option to be evaluated (Act of Faith)

Give yourself—or your colleagues—1 point for each yes answer, and add them up to get to the total score. Zero implies an absence of globaloney. A score of 1 or 2, while indicating some globaloney, is still better than average. A score of 3 puts you at the average for several hundred managers who responded to an online survey—see below—but note that the average is pretty unhealthy given the number of problems it can lead to (think Coke). And a score of 4 or 5 rises beyond globaloney to the level of globalmania.

One wonders whether Tom Friedman will read this book...

Every now and then you see someone who does well in the public eye and actually deserves it. I can't think of a better example than Marshall Goldsmith and his latest book: What Got You Here Won't Get You There: How Successful People Become Even More Successful.

The book is now the #1 best selling business book in the United States, as ranked by both the Wall Street Journal and USA Today. It also reached that coveted #1 spot in Amazon.com.

Way to go Marshall! For those of you who missed my quick take why you should read this book, go here>>

I'll be doing a book review shortly.

There isn't much in the world that hasn't happened before (except for man-made global warming) that we can't learn about by reading our history.

Nancy Pelosi recent misstep is not the end of the world. She was being true to her heart, which is not a bad thing in itself.

But there is a lesson to be learned for all leaders from Pelosi: when you get to a higher position, you must grow with it.

And that's the lesson from Marshall Goldsmith's new book: What Got You Here Won't Get You There: How Successful People Become Even More Successful.

Executives who hire Goldsmith for one-on-one coaching pay $250,000 for the privilege. With this book, his help is available for 1/10,000th of the price.

Anyone who thinks they're a leader should read it carefully.

P.G. Wodehouse & India

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In a country where most books in English sell fewer than 1,000 copies and 5,000 constitutes a bestseller, Penguin sells up to 70,000 Wodehouses a year: part of a thriving “retro-market” that ranges from Agatha Christie to Modesty Blaise.

Why? Read the article: "Why India fell for the code of Wodehouse"

Let me give you a list of what we read (for fun) when we were kids at St. Columba's (from first grade to 10th). It sure was British, beta!

- Enid Blyton's Five Find Outers, Famous Five, Secret Seven, Malory Towers, Saint Clare's
- Captain W.E. Johns' Biggles
- Richmal Crompton's William
- Frank Richards' Billy Bunter
- Agatha Christie
- and of course, P.G. Wodehouse

We also read Tin Tin and Asterix, the usual Hardy Boys and Nancy Drew junk, and the Bobsey Twins. Add to that a weekly Commando comic, the occasional Beano, and see what a mixed-up world we grew up in!

It's a straight line from Noddy to P.G. Wodehouse.

One more thing - we did NOT read Shakespeare, unless we had to.

Laurence Haughton speaks softly, but his message comes through loud and clear:

Fact 1: 1/2 of all a company's strategies and initiatives will fail to make it from the drawing board to the front lines

Fact 2: Because 2/3 of all managers follow through using tactics prone to fail

Fact 3: And only 1 out of 10 companies have the tools to address this critical breakdown

A management consultant, lecturer, and business writer, Haughton's latest book, It’s Not What You Say… It’s What You Do – How Following Through at Every Level Can Make or Break Your Company was published by Doubleday in 2005.

In 2001 Haughton co-authored It’s Not the Big that Eat the Small… It’s the FAST that Eat the Slow– a Wall Street Journal, USA Today, and New York Times bestseller that was translated for sale in 26 countries around the world.

Here's the interview I've been promising to post on the site.

What made you write this book?

I wanted to know why half of all initiatives fail, and what leaders at every level can do about it. Of course, I had preconceived notions of what I thought the problems were, but was surprised to find that almost all of them were dead wrong…

Can you give us an example of that?

The biggest preconceived notion I had was that there wasn't enough accountability in the world, and that why things didn’t get done. I used to think that people didn’t take completing their work seriously or their bosses didn’t make the consequences serious enough.

I have a very high degree of what psychologists would call conscientiousness, which can make me a real pain to be around. So that’s why I thought I got things done, and others didn’t.

So you're the worrywart for everyone...

Also a nag. I used to look to blame people. I've visited companies that work that way, and I'm now convinced that's dead wrong.

So the concept that all the world needs is accountability and more dire consequences, or the opposite view- a motivationalist view that all you need is more attaboys! Whichever side you want to be on, they're both wrong.

The key is that you have to find the line between enough and too much accountability. The line is not that hard to find. I lay out a prescription in the book. But it depends on the type of project you're working on. For example, is it more important that everyone communicates, coordinates and cooperates or is it more important that you know to last scintilla who it is that specifically dropped the ball that caused an interruption. Pinpoint accountability is totally unproductive in certain industries- the airline industry, for example. Research shows us that managers who take accountability too far, especially in businesses where follow through requires rapid responses to unpredictable changes, chip away at each individual’s willingness to look past personal interests and work with others to make sure what's expected gets done.

In the book you're saying that execution is critical. And yet you take Larry Bossidy to task.

It was Linda Lockwood at Charles Schwab who lifted the veil from my eyes about the Larry Bossidy's memo in his book. She's the one who said it was the "same old corporate gobbledygook." Bossidy's memo did not set clear expectations. And Linda wondered aloud: "How could managers tell when they had achieved Bossidy's objectives?"

I can tell you that woke me up.

Then I started exploring the difficulty that people have when directions aren't clear.

My book describes 4 building blocks that were developed after research showed us that 66% of managers use tactics that are prone to fail. And the tactics fall under the 4 building blocks I describe in my book. I use the 4 building blocks to make it plain, to explain step-by-step what to watch out for.

It's so important that you have measurable objectives but even more important, you've got to have clarity. It was Einstein who said that if a scientific theory can't be explained to a child it's probably worthless.

Think of the stuff that you read - the obtuse language, the jargon - in the marketing world and HR world for example.

The team leader's job is to make people understand, not confuse them. Not everyone has to be as smart as the leader as Linda pointed out, but everyone has to understand where we're going as a team.

So let's talk about the 4 building blocks...

The four building blocks are:

1. Having a clear direction so everyone knows exactly where they're headed
2. Matching the right people to each goal
3. Getting the right level of buy-in (you have to outmaneuver the CAVE people)
4. Unlocking the individual initiative in every member of the team

Simple enough. But it's far more complicated than you'd expect.

The first building block is clear direction that says that if you talk to people, more that half the time people can't see a connection between what they’re doing and what the corporate objectives are. Why cant; they. It starts with the fact that as leaders, as managers we're not clear. Sometimes we're trained to say things in a vague and general way instead of doing what Douglas Smith says- make success measurable. Be specific, have some idea about how you measure the results you want and how the accountability gets divided in the team. To begin, just ask yourself- "is what I told them to do measurable, is it specific enough?"

In the book I describe the executive who is told by a 16 year old kid that "sometimes it seems like you're writing to impress yourself."

It's our job to make sure that what we say makes sense and is understood at every level of the company- by both platinum level players and nickel level players, and everyone in between.

We all need to recognize that we have empathy inside us, and that we can up our ability to empathize. In the book I talk about reading between the lines. Take the world of the high-end restaurant business. A very competitive business, low barriers to entry… so how do you compete? How do you compete with people who are paid $12-15 dollars an hour?

In the book we tell readers about Richard Coraine of the Union Square Hospitality Group in Manhattan. They have created a process of "enlightened hospitality" which I describe as a real-time sixth-sense of their customer's expectations, followed by an effort to exceed those expectations. Coraine tells us the story of how a reservations person noticed the guest whose valise had a broken grip (he held it under his arm so his client wouldn't notice). While the guest entertained his client over lunch (at a quiet table selected by the host), the valise is sent around the block and the strap is reattached. When the guest comes to check out, the host hands him the bag by the grip to show him its fixed, without a word being exchanged. That's "enlightened hospitality."

The key is to "put yourself in someone's shoes." That's what Coraine has created, a recipe for that includes smarts, heart, and courage. There's another story he tells us in the book as well, but you'll have to read it.

You mean the one about "chicken soup and crackers" after midnight?

(Laughs) Yes.

You mention how critical it is to make accurate assessments. How does that work?

Here's something else that keeps coming up: "We tried that and it didn't work, so we tried something else."
How many times do executives try a change program and when it doesn’t work, they simply come up with another change initiative. This is a huge problem.

But some companies have the courage to stay the course. Take the case of SSM Health Care, another company I outline in the book. After 5 years of spending money and seminars and intense work on total quality management, a senior executive gets asked "Are we still doing CQI?" CQI was the continuous-quality-improvement initiative they had introduced five years earlier.

To their credit, they realized they had been "mucking around." So they dug in. Something was missing. And it came out that the problem was that they were not making accurate assessments. They were trying to solve problems before they did a decent stab at the root-cause.

Ask "why" 5 times. The tendency is to try to fix something as soon as you see something wrong. Problem is people try to fix problems quickly, but they don't fix the root cause. Why? Because they didn't ask why enough.

The Five Whys is not new. It comes to us from Taiichi Ohno, the creator of the Toyota Production System. He believed that if managers wanted to start with a clear and accurate assessment of any problem, they had to ask why five times before trying to create a solution.

I also mention the case of Bill Zollars at Yellow Transportation- he wanted the company to start exceeding customer expectations by making sure their clients were very satisfied, not just satisfied, mind you, but very satisfied. He found out that the assessment his VP of Marketing had made of customer satisfaction was way, way off. And he found this out because he delved deeper. He checked the accuracy of their assessments.

Let’s talk about choosing the right people – the second building block…

Sure – I come from a background where you hire for experience. While researching this book, I found out that sometimes it's more important to hire attitude over experience.

There’s another myth out there that says that anyone can accomplish anything if they just put their mind to it. There’s so much junk science out there that I had to really to clear the weeds, to find out what really works.

For example, research tells us those managers who make sure there’s the right fit between people and their goals before they take action double the likelihood of success.

There are people who are perfectly suited for the New York Yankees style of management. Others aren’t.

Sometimes the HR bureaucracy doesn’t give you the time. I talked to a manager who said they had 45 minutes to interview each candidate, which was simply not enough to get to know someone before hiring them.

HR sometimes is its own worst enemy.

Now at IKEA we have something different. Why? Because Pernille Spiers-Lopez, the president of IKEA North America. spent four years as manager of human resources for IKEA North America before being named president. She doesn’t have to put up with the nonsense. They’ve totally reinvented the HR function and it’s a beautiful thing to see. I did not talk about this in the book, but the IKEA hiring process gives them a competitive advantage.

[Note: Working Mother magazine named IKEA North America one of the 100 best companies for working mothers and singled out Spiers-Lopez for its Family Champion Award. The company provides benefits not widely offered retail workers in the U.S: full medical and dental insurance for those who work as little as 20 hours a week, including coverage for domestic partners and children; paid maternity leave; tuition assistance; a 401(k) matching plan and flexible work schedules. Spiers-Lopez was named president in 2001, when sales staff turnover was 76%. The next year these and other policies helped the company slash turnover to 56%.]

HR people are dying to get a seat at the strategy table. They have to be invited to the table because they bring something to the table. Traditional HR does not.

The key again is to connect personal goals to the goals of the organization. And sometimes that doesn’t just happen. As a leader, you have to make it happen. And if HR is going to be relevant, its got to become better at identifying and discovering talent.

And you’re only going to make that happen if you can outmaneuver the CAVE people.

Who are these CAVE people?

Anand Sharma at TBM Consulting Group gave me that acronym.

CAVE stands for Citizens Against Virtually Everything.

Just as our bodies have an immune system that assaults everything new and unfamiliar, organizations have their own auto-immune response that impulsively and instinctively attacks everything new or different- the CAVE people. They work overtly and covertly to undermine the change initiative your company is depending on. In the book I outline the strategy for outmaneuvering them, to give your change initiative a fighting chance of success.

Can you give us a hint how? How do you outmaneuver the CAVE people?

Anand Sharma was very kind to share these insights with our readers. I go into the details in the book, but essentially:

1. Kick off your change initiative with a “wow” event.
2. Blitzkrieg them (follow through so fast the CAVE people don’t have time to organize resistance)
3. Create disciples from the rank and file
4. Take your success story straight to the top

The bottom line is to execute, you simply have to get past the CAVE people.

Why are some people so motivated? And others so unmotivated? And why do incentive plans not work? That’s something I examine in the book as well.

This is all great, actionable knowledge for executives who want to get things done. We should let people buy the book to get the full story. Thanks for all your time.

Thank you.

A must read for everyone from the CEO on down...

If you're interested in values and business sustainability, you should check out this double book deal on Amazon.com. For the rest of this month, you can buy On Value and Values by Doug Smith together with Our Endangered Values by Jimmy Carter and save $20.76...

See the details on Doug Smith's site >>

Find me an honest politician, and I will spare this world. We looked everywhere, but could not find an honest politician.

I'm kidding here, but just barely.

"Abramoff is the central figure in what could become the biggest congressional corruption scandal in generations," writes the Washington Post.

And today there's another story: apparently "the U.S. Family Network, a public advocacy group that operated in the 1990s with close ties to Rep. Tom DeLay and claimed to be a nationwide grass-roots organization, was funded almost entirely by corporations linked to embattled lobbyist Jack Abramoff, according to tax records and former associates of the group."

And:

"Two former associates of Edwin A. Buckham, the congressman's former chief of staff and the organizer of the U.S. Family Network, said Buckham told them the funds came from Russian oil and gas executives. Abramoff had been working closely with two such Russian energy executives on their Washington agenda, and the lobbyist and Buckham had helped organize a 1997 Moscow visit by DeLay (R-Tex.)."

"The former president of the U.S. Family Network said Buckham told him that Russians contributed $1 million to the group in 1998 specifically to influence DeLay's vote on legislation the International Monetary Fund needed to finance a bailout of the collapsing Russian economy."

Everyone knows how corrupt politicians are. These days, it seems worse than ever.

But now we are looking at the Enronization of Business, all business.

If competitive advantage is gained through "bribes," then why should business ever play straight?

Is corruption the core-competence of successful businesses? What happened to the rule of law?

From Exxon to Wal-mart, businesses have lost their way. In their hurry to boost shareholder value, they are destroying their brands and their future.

They are playing in Box 1 and ignoring Box 3.

So why is this happening? Why are so many smart businesses (and politicians) being so dumb?

The answer comes to us from the late Peter Drucker:

Drucker tells us this story about Alfred P. Sloan Jr. who is reported to have said at a meeting of one of the GM top committees, "Gentlemen, I take it we are all in complete agreement on the decision here." When everyone around the table nodded in assent, Sloan says: "Then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."

Drucker's point is that "unless one has considered alternatives, one has a closed mind." Decision-making for Drucker is best only if based on the clash of conflicting views, the dialogue between different points of view, and the choice between different judgements."

The first rule of decision-making is that one does not make a decision unless there is disagreement.

Alas, few business leaders or politicians tolerate dissent in their ranks. In fact, they work hard to eliminate nay-sayers.

And that is the root cause of all this corruption. Not money, but bad choices, bad decisions. OK- perhaps it is money after all.

From The Five Dysfunctions of a Team:

Dysfunction #1: Absence of Trust
Strategy for Overcoming:
• Identify and discuss individual strengths and weaknesses
• Spend considerable time in face-to-face meetings and working sessions

Dysfunction #2: Fear of Conflict
Strategy for Overcoming:
• Acknowledge that conflict is required for productive meetings
• Understand individual team member’s natural conflict styles, and
establish common ground rules for engaging in conflict

Dysfunction #3: Lack of Commitment
Strategy for Overcoming:
• Review commitments at the end of each meeting to ensure all team
members are aligned
• Adopt a “disagree and commit” mentality—make sure all team
members are committed regardless of initial disagreements

Dysfunction #4: Avoidance of Accountability
Strategy for Overcoming:
• Explicitly communicate goals and standards of behavior
• Regularly discuss performance versus goals and standards

Dysfunction #5: Inattention to Results
Strategy for Overcoming:
• Keep the team focused on tangible group goals
• Reward individuals based on team goals and collective success

Makes sense, right? It's not quite so simple.

A manager in a large Fortune 500 company once gave everyone on the team (yours truly included) a copy of "Who Moved My Gouda?" as a substitute for addressing the real issues affecting performance. Was I inspired or what?

Message to management: do not go out and buy copies of a book for your team and expect to solve anything.

I think the real key to teams working well is a sense of shared purpose. Of course, results matter... which is why we all need to study the secrets of successful strategy execution >>

From BusinessWeek: See how the world's largest online retailer ensures that gifts get delivered on one of the busiest shopping -- and shipping -- days of the year.

Here >>

Doug Smith, the author of On Value and Values posted this alarming news on his blog today:

"...two professors at UMass told their local newspaper about a student of theirs who "was visited by federal agents two months ago, after he requested a copy of Mao Tse-Tung's tome on Communism called "The Little Red Book... The student, who was completing a research paper on ... fascism and totalitarianism, filled out a form for the request, leaving his name, address, phone number and Social Security number. He was later visited at his parents' home in New Bedford by two agents of the Department of Homeland Security."

Smith contrasts the attitudes of Thomas Jefferson and Ben Franklin with our very own King George. A great post. Read it here >>

2005 Harold Pinter

2004 Elfriede Jelinek

2003 J.M. Coetzee

2002 Imre Kertész

2001 V.S. Naipaul

2000 Gao Xingjian

1999 Günter Grass

1998 José Saramago

1997 Dario Fo

1996 Wislawa Szymborska

1995 Seamus Heaney

1994 Kenzaburo Oe

1993 Toni Morrison

1992 Derek Walcott

1991 Nadine Gordimer

1990 Octavio Paz

1989 Camilo José Cela

1988 Naguib Mahfouz

1987 Joseph Brodsky

1986 Wole Soyinka

1985 Claude Simon

1984 Jaroslav Seifert

1983 William Golding

1982 Gabriel García Márquez

1981 Elias Canetti

1980 Czeslaw Milosz

1979 Odysseus Elytis

1978 Isaac Bashevis Singer

1977 Vicente Aleixandre

1976 Saul Bellow

1975 Eugenio Montale

1974 Eyvind Johnson, Harry Martinson

1973 Patrick White

1972 Heinrich Böll

1971 Pablo Neruda

1970 Alexandr Solzhenitsyn

1969 Samuel Beckett

1968 Yasunari Kawabata

1967 Miguel Angel Asturias

1966 Samuel Agnon, Nelly Sachs

1965 Mikhail Sholokhov

1964 Jean-Paul Sartre

1963 Giorgos Seferis

1962 John Steinbeck

1961 Ivo Andric

1960 Saint-John Perse

1959 Salvatore Quasimodo

1958 Boris Pasternak

1957 Albert Camus

1956 Juan Ramón Jiménez

1955 Halldór Laxness

1954 Ernest Hemingway

1953 Winston Churchill

1952 François Mauriac

1951 Pär Lagerkvist

1950 Bertrand Russell

1949 William Faulkner

1948 T.S. Eliot

1947 André Gide

1946 Hermann Hesse

1945 Gabriela Mistral

1944 Johannes V. Jensen

1943 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section

1942 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section

1941 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section

1940 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section

1939 Frans Eemil Sillanpää

1938 Pearl Buck

1937 Roger Martin du Gard

1936 Eugene O'Neill

1935 The prize money was with 1/3 allocated to the Main Fund and with 2/3 to the Special Fund of this prize section

1934 Luigi Pirandello

1933 Ivan Bunin

1932 John Galsworthy

1931 Erik Axel Karlfeldt

1930 Sinclair Lewis

1929 Thomas Mann

1928 Sigrid Undset

1927 Henri Bergson

1926 Grazia Deledda

1925 George Bernard Shaw

1924 Wladyslaw Reymont

1923 William Butler Yeats

1922 Jacinto Benavente

1921 Anatole France

1920 Knut Hamsun

1919 Carl Spitteler

1918 The prize money was allocated to the Special Fund of this prize section

1917 Karl Gjellerup, Henrik Pontoppidan

1916 Verner von Heidenstam

1915 Romain Rolland

1914 The prize money was allocated to the Special Fund of this prize section

1913 Rabindranath Tagore

1912 Gerhart Hauptmann

1911 Maurice Maeterlinck

1910 Paul Heyse

1909 Selma Lagerlöf

1908 Rudolf Eucken

1907 Rudyard Kipling

1906 Giosuè Carducci

1905 Henryk Sienkiewicz

1904 Frédéric Mistral, José Echegaray

1903 Bjørnstjerne Bjørnson

1902 Theodor Mommsen

1901 Sully Prudhomme

From Harold Pinter – Nobel Lecture

Art, Truth & Politics

© THE NOBEL FOUNDATION 2005

In 1958 I wrote the following:

'There are no hard distinctions between what is real and what is unreal, nor between what is true and what is false. A thing is not necessarily either true or false; it can be both true and false.'

I believe that these assertions still make sense and do still apply to the exploration of reality through art. So as a writer I stand by them but as a citizen I cannot. As a citizen I must ask: What is true? What is false?

Truth in drama is forever elusive. You never quite find it but the search for it is compulsive. The search is clearly what drives the endeavour. The search is your task. More often than not you stumble upon the truth in the dark, colliding with it or just glimpsing an image or a shape which seems to correspond to the truth, often without realising that you have done so. But the real truth is that there never is any such thing as one truth to be found in dramatic art. There are many. These truths challenge each other, recoil from each other, reflect each other, ignore each other, tease each other, are blind to each other. Sometimes you feel you have the truth of a moment in your hand, then it slips through your fingers and is lost.

I have often been asked how my plays come about. I cannot say. Nor can I ever sum up my plays, except to say that this is what happened. That is what they said. That is what they did.

.......

I have said earlier that the United States is now totally frank about putting its cards on the table. That is the case. Its official declared policy is now defined as 'full spectrum dominance'. That is not my term, it is theirs. 'Full spectrum dominance' means control of land, sea, air and space and all attendant resources.

The United States now occupies 702 military installations throughout the world in 132 countries, with the honourable exception of Sweden, of course. We don't quite know how they got there but they are there all right.

The United States possesses 8,000 active and operational nuclear warheads. Two thousand are on hair trigger alert, ready to be launched with 15 minutes warning. It is developing new systems of nuclear force, known as bunker busters. The British, ever cooperative, are intending to replace their own nuclear missile, Trident. Who, I wonder, are they aiming at? Osama bin Laden? You? Me? Joe Dokes? China? Paris? Who knows? What we do know is that this infantile insanity – the possession and threatened use of nuclear weapons – is at the heart of present American political philosophy. We must remind ourselves that the United States is on a permanent military footing and shows no sign of relaxing it.

Many thousands, if not millions, of people in the United States itself are demonstrably sickened, shamed and angered by their government's actions, but as things stand they are not a coherent political force – yet. But the anxiety, uncertainty and fear which we can see growing daily in the United States is unlikely to diminish.

I know that President Bush has many extremely competent speech writers but I would like to volunteer for the job myself. I propose the following short address which he can make on television to the nation. I see him grave, hair carefully combed, serious, winning, sincere, often beguiling, sometimes employing a wry smile, curiously attractive, a man's man.

'God is good. God is great. God is good. My God is good. Bin Laden's God is bad. His is a bad God. Saddam's God was bad, except he didn't have one. He was a barbarian. We are not barbarians. We don't chop people's heads off. We believe in freedom. So does God. I am not a barbarian. I am the democratically elected leader of a freedom-loving democracy. We are a compassionate society. We give compassionate electrocution and compassionate lethal injection. We are a great nation. I am not a dictator. He is. I am not a barbarian. He is. And he is. They all are. I possess moral authority. You see this fist? This is my moral authority. And don't you forget it.'

A writer's life is a highly vulnerable, almost naked activity. We don't have to weep about that. The writer makes his choice and is stuck with it. But it is true to say that you are open to all the winds, some of them icy indeed. You are out on your own, out on a limb. You find no shelter, no protection – unless you lie – in which case of course you have constructed your own protection and, it could be argued, become a politician.

I have referred to death quite a few times this evening. I shall now quote a poem of my own called 'Death'.

Where was the dead body found?
Who found the dead body?
Was the dead body dead when found?
How was the dead body found?

Who was the dead body?

Who was the father or daughter or brother
Or uncle or sister or mother or son
Of the dead and abandoned body?

Was the body dead when abandoned?
Was the body abandoned?
By whom had it been abandoned?

Was the dead body naked or dressed for a journey?

What made you declare the dead body dead?
Did you declare the dead body dead?
How well did you know the dead body?
How did you know the dead body was dead?

Did you wash the dead body
Did you close both its eyes
Did you bury the body
Did you leave it abandoned
Did you kiss the dead body

When we look into a mirror we think the image that confronts us is accurate. But move a millimetre and the image changes. We are actually looking at a never-ending range of reflections. But sometimes a writer has to smash the mirror – for it is on the other side of that mirror that the truth stares at us.

I believe that despite the enormous odds which exist, unflinching, unswerving, fierce intellectual determination, as citizens, to define the real truth of our lives and our societies is a crucial obligation which devolves upon us all. It is in fact mandatory.

If such a determination is not embodied in our political vision we have no hope of restoring what is so nearly lost to us – the dignity of man.

...

Read the whole thing and weep.

...

The great and growing collection of outside work that Drucker’s thinking has generated testifies to the seminal place of his ideas on the role of knowledge in companies. These articles from the McKinsey Quarterly archive look at how companies might maximize the benefits from their in-house knowledge.

- Best practice and beyond: Knowledge strategies (premium)
- Managing the knowledge manager
- Do you know who your experts are?
- Making a market in knowledge
- The 21st-century organization (premium)

I particularly liked this diagram in "Managing the knowledge manager":

Check out the collection here >>

Did I mention I hate McKinsey's "premium" content policy? Those McK-partners are just penny-pinching millionaires. The Mercer people get it: their content is open. Open-up, McKinsey!

I received an email from Laurence Haughton, the author, on Peter Drucker.

With his permission, here it is:

It is now five days since Peter Drucker passed away and the tributes have filled the air like so many streamers and confetti at a ticker tape parade.

According to columnists in journals and blogs Drucker was, “an American sage,” “the uber-guru,” “profound,” and “a visionary.”

America’s two most popular business pundits agree. “[Drucker was] the right man for our times,” wrote one. And the other was just as reverential, “The most influential management thinker in the second half of the twentieth century.”

But I don’t see it that way.

If Drucker was “the most influential” shouldn’t he have changed a lot of executive behavior? If he truly was “profound” or the “right man for our times” wouldn’t he have a lot of followers who practice what he prescribed?

Peter Drucker is, as he himself once wrote about management sciences pioneer Mary Parker Follett, the “most quoted and least heeded” teacher of management.

Why he is so quoted is easy to understand. Pick up anything he wrote. I just went back and skimmed through 1964’s “Managing for Results.” You’ll find Drucker is incredibly insightful yet totally clear and practical. He’s no ivory tower theorist. Drucker explains exactly what to do and what not to do, giving systematic, logical, and consistent answers to all the fundamental challenges of management. If you are opining about management, he’s a perfect source to quote.

But as far as being heeded… I don’t think so. What company is managed according to his prescriptions? What leader follows his clear, specific advice? Frankly, is there anyone who gives him anything more than lip service?
Take just one of Drucker’s lessons. He criticized organizations who issued directives to “cut 5 or 10 percent from budgets across the board.” He said, “This is ineffectual at best and at worst, apt to cripple the important, result-producing efforts that usually get less money that they need to begin with.” Yet, when have you seen a company cut costs using Drucker’s clear distinctions between efficiency and effectiveness instead of the across-the-board cop out?

And I’ll bet others can find 100 additional quoted and ignored lessons from Peter Drucker just like that one.
Years ago I was told “performance is the proof that the learning took place.” If that’s true I’m sorry to say that despite all the tributes, up to now, we’ve learned very little from Peter Drucker.

 

Here's a dead blog from a very popular writer. Why did he even start one?

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