GREAT BUSINESS BOOKS

by Charles Snow

John Jordan, a colleague of mine at Penn State, writes a periodic newsletter called Early Indicators. It’s about the latest techie stuff and trends, and I find it quite interesting. John’s latest newsletter, however, was entitled What Makes a Great Business Book?

In this post, I’d like to summarize John’s ideas on great business books and then conclude with my own. John’s thought process was kicked off when he finished reading Brad Stone’s book on Jeff Bezos and Amazon entitled The Everything Store. Although he enjoyed the book, he concluded that it lacked “greatness.” After making his own list of great business books (shown below), he began to eliminate the categories of business books that, in his opinion, were not worthy of the label “great.” These are:

• “Self-help” books such as Stephen Covey’s The Seven Habits of Highly Effective People.
• “Patterns of success” books such as Tom Peters and Robert Waterman’s In Search of Excellence or Jim Collins’ Good to Great. (John points out that successful companies today are often unsuccessful companies tomorrow.)
• “Strategy” books such as Michael Porter’s Competitive Strategy, Hamel and Prahalad’s Competing for the Future, or Kim and Mauborgne’s Blue Ocean Strategy. (These seem like “exercises in hindsight” rather than “scientific discovery.”)
• “First-person tales” (too numerous to mention). 

ACCESS TO HEALTHCARE: HUMAN RIGHT OR PRIVILEGE?

 

By Ronald Fox

I’ve had countless arguments with conservatives opponents of the Affordable Care Act (i.e., Obamacare). I’ve done so even though I’m not a big fan of the Act. It is extremely complex, key provisions are vague, which will probably lead to inconsistent and arbitrary enforcement, and, worst of all, it contains no public option, making it unlikely escalating healthcare costs can be controlled. These legitimate concerns, however, are rarely topics of discussion among the conservative ACA critics I’ve encountered.

Almost without exception, I’ve found these people to be uninformed, misinformed, and downright duplicitous debaters. It’s the same old ideologically dogmatic, hyper-partisan story: ignore facts and accept as truth only what conforms to one’s ideological beliefs and prejudices. I don’t think, however, that disagreement over facts lies at the heart of the current Obamacare divide; rather, the bitter divide seems to me to follow from differing philosophies about whether health is a basic human right and whether public authorities have an obligation to ensure realization of this right.

REFLECTIONS ON PRESIDENT OBAMA’S DECLINING JOB APPROVAL

By Ronald Fox 

Numerous polls show that President Obama’s job approval rating has dropped to a new low. Over 50% of Americans now disapprove of his job performance. The recent decline in public approval appears largely a result of criticism over the ACA rollout debacle, but also reflects bipartisan revulsion over revelations about the mind-boggling extensiveness of NSA spying. Dissatisfaction with Obama encompasses the full political spectrum, from right to left. I’ve been thinking about what Obama’s declining popularity portends for Democrats in 2014 and his legacy as president.

The disastrous rollout reinforced dislike of the ACA among Republicans, but also antagonized many independents and pulled some Democrats away from supporting the plan. More importantly, perhaps, it diverted attention from the government shutdown gambit that alienated many Americans and gave a bump to the President and the Democrats. NSA spying revelations have angered liberals and conservatives alike. Those on the left are particularly vexed in light of Obama’s 2008 campaign rhetoric to conduct the war on terror with transparency and due respect for civil liberties. He promised to do things differently from his predecessor. Little did we know that this difference would mean more spying, less transparency, and more drone attacks. This comes on top of Obama’s weak response to conservative economic challenges, and his wholesale embracing of the tax cutting/austerity framework, which has also bothered many on the left.

STRENGTH IN NUMBERS: WHY YOUR FIRM SHOULD KNOW HOW TO COLLABORATE

by Charles Snow 

Normally, we think of firms competing against one another; however, a growing number of successful companies are working together to find solutions to common challenges. For instance, Innocentive uses a global network of millions of problem solvers to help companies overcome R&D business challenges that they can’t overcome themselves. Several member firms of Blade.org have together developed an innovative computer server application for the Asian Art Museum in San Francisco, California. Along with major research universities and the national governments of six countries, IBM is using its “collaboratories” to develop solutions to such complex problems as electricity distribution on the island of Malta and traffic congestion in Moscow, Russia. Lego helps entrepreneurs start their own businesses by providing a toolkit featuring its famous building blocks. My M&M’s web site enables chocolate lovers to design their own candies just as NIKEiD allows sports enthusiasts to design their own shoes.

All of these firms – and many more around the world – are using some form of collaborative innovation to expand and improve their business. In knowledge-intensive industries like biotechnology or computers, the ability to collaborate is a must because the knowledge base required to innovate is complex, growing, and widely diffused. But even in less dynamic industries, collaboration can be useful to firms for a variety of reasons, including lowering the costs of product development, starting new businesses, retaining customers, and building brand equity.

RUNNING THE COUNTRY AS A BUSINESS

By Charles Snow


In his book The (Mis)management of America, Inc., Lawrence G. Hrebiniak uses the metaphor of a large corporation and applies it to the U.S. economy. He examines how top management -- the White House and Congress -- runs the country and artfully describes a "perfect storm" of irresponsible top executives managing a corporation whose customers (U.S. citizens) are  largely disengaged and misinformed. The consequences are potentially catastrophic. Although the book is five years old, its thesis is still valid -- perhaps even more so given the events that have unfolded over the past few years.

From a management perspective, consider how closely the U.S. resembles a large corporation. America, Inc. is a $3.5 trillion business. It is diversified, operating businesses in defense, health care, banking, science, education, and many other industries. It hires people, fires people, has retirement programs, makes money, loses money, and so on. The company called America, Inc. is larger, more diversified, and more powerful than Wal-Mart, IBM, Exxon Mobil or any other company in the world.

WILL HEAVY FINES DETER WALL STREET MISDEEDS?

 

By Ronald Fox

A reader, responding to my posting on economic inequality and institutional corruption, sent me a note asking whether I thought expanding civil and criminal probes into the financial dealings of Wall Street firms represents a turning point in holding large corporations accountable for criminal misconduct. These investigations, which have touched on such misdeeds as mortgage and derivative fraud, inner-bank interest rate manipulation, energy trading practices, insider trading, rigging global interest and currency rates, and passing out bribes to secure business, have already resulted in some record fines. The federal government promises there’s more to come. Globally the cost of banks cleaning up misdeeds is expected to soar to over $125 billion. I’m far from an expert on human behavior, business practices, and complex legal maneuverings, so in responding to the reader all I can offer is an educated opinion. I will draw on practical wisdom to argue that I don’t believe fines alone will be enough to deter Wall Street malfeasance.

The current legal troubles of JP Morgan Chase (henceforth, JPM), long considered one of our strongest and best managed financial institutions, is illustrative of recent government efforts to investigate and punish financial institution malfeasance. JPM is currently facing dozens of federal and state legal probes. As reported in the New York Times, a couple of foreign governments have also launched investigations. The company has already paid over $5 billion to resolve Federal claims that it misled Fannie Mae and Freddie Mac about risky home loans and securities they bought before the housing market collapsed, nearly $1 billion for failure to oversee trading that led to a $6 billion loss in its “London Whale” caper, and $410 million in a settlement with the Federal Energy Regulation Commission (FERC) for its alleged manipulation of California’s electricity market from 2010 to 2012. Among other legal probes, Morgan is presently being investigated for its connection to the Barnard Madoff Ponzi scheme and is in the final stages of negotiations with the U.S. Justice Department on a multi-billion dollar settlement for activities related to the financial crisis. Our “best managed financial institution” appears now to be possibly our biggest corporate crook.

THE CLIMATE CHANGE SAGA: OH MY, WHAT IS WRONG WITH US?

By Charles Snow

When I was a third grader in San Diego in the 1950s, my teacher was Leta Lipp. She was a wonderful teacher who, among other things, taught us how to think about and interact with the natural environment. Ms. Lipp loved the American Indian way of life, and every summer she would spend some of her time visiting the Hopi reservation in Arizona. When she returned to teach in the fall, she would introduce American Indian philosophies and practices to her students in the form of stories and projects (e.g., carving kachina dolls out of balsa wood). Ms. Lipp taught us that the relationship between humans and Mother Nature was sacred. The earth’s God-given resources are precious and should be respected. When someone uses a resource, such as removing a bucket of river water for drinking or killing a buffalo for food, he should not be wasteful. The environment should not be despoiled in any way and should be preserved for future generations. Essentially, Ms. Lipp taught us to be in awe of Mother Nature’s wonders and to do everything we could to preserve them.

If she were alive today, I believe Ms. Lipp would be pleased with the attention the environment has been receiving lately. I’m certain she would be appalled at how we’ve let the environment degrade, and probably she would be angry at the U.S. for being one of the world’s biggest polluters. A few years ago, 65 scientists received a Nobel Prize for summarizing the research done to date and concluding that climate change is real and that it is largely due to the actions of mankind (using fossil fuels for energy, emitting carbon dioxide into the air from automobiles, etc.). A recently released U.N. report, which was held up as scientists agonized over its wording, stated these same conclusions even more forcefully. Just last month, the head of the Organization for Economic Cooperation and Development sought to make climate change a higher priority on the global agenda, urging the world to eliminate all emissions from burning fossil fuels sometime in the second half of this century.