Next month I plan to review a recent book that has been much discussed in the USA – Outliers by Malcolm Gladwell. It suggests various reasons why certain people are highly successful and quotes the year of birth – and the opportunities this creates – as key to potential achievement. He quotes an impressive number of high achievers who were born in 1955 and included among these are those two great rivals, Bill Gates and Steve Jobs.
Jobs is perhaps the most fascinating business person of his generation, because of the roller coaster career and, not unconnected, the two dimensional personality that is disclosed by his life story. His early career reveals a man who was great at innovating but less great at running the companies he created. A classic example of this problem was his first time at Apple when he became the man that Apple could not live with but then could not survive without. He clearly inspired people to achieve for him but was such an impossible taskmaster that nobody could cope for long with his demanding standards and insensitive communication style. Thus he was booted out of the company he created and inevitably they struggled without him as Microsoft and IBM took a stranglehold on the PC market.
He then tried to prove himself by starting a new computer business – NeXT - with some handpicked former Apple people who were prepared to give up their careers to follow him. His two edged personality was confirmed again as every one of this group left the company because they could not cope with his behaviour under pressure as the company teetered on the brink of bankruptcy. He was saved because two things happened, partly due to luck and partly due to his genius.
First he had made another major investment - in animated films with Pixar - and this company also seemed to be going bust until his faith in their innovative methods of computer film making finally paid off. Just in time the enormous success of the Toy Story films enabled Pixar to sign a lucrative contract with Disney. It was significant that Disney wanted to poach the genius behind the films – John Lasseter – but despite getting the usual Jobs management treatment, Lasseter remained loyal to the man who had kept faith with him.
The second happening was Jobs’ return to Apple as its second time around saviour as his leadership and vision took them into the music business through the enormous success of I Tunes and the I Pod. His insistence that customers would pay for innovation of style and design – his strength in Apple’s early days - paid off big time. One of his frustrated marketers is quoted as saying that ‘Steve’s idea of market research is to look in the mirror each morning and ask himself what he wants’. Often he was wrong but with the Apple Mac and the I Pod he was right and that was enough to turn Apple round and vindicate those who had argued for his return (though Steve soon ousted Gil Amelio, the CEO who had brought him back!)
Towards the end of the book there are signs of a new and more mature Steve Jobs as he finally proves that he can run a business for the long term and also finds late personal fulfilment with a wife and family. A successful battle with cancer also seems to have added to his maturity but the very sad latest news is that a heart attack has added to his challenges. Maybe he is paying the price for the amazing and finally successful roller coaster of his life but I suspect that it is a price that many more ordinary mortals might be willing to pay.
The book ends with the rather sad comment that he will never find true fulfilment until he proves he is better than his nemesis Bill Gates. After reading this highly recommended book, I was of the view that, whatever the numbers may say, he is already there. I am just grateful that I never had to work for him.
Monday 1 December 2008
‘Icon, the greatest second act in the history of business’ a biography of Steve Jobs by Jeffrey S. Young and William L. Simon (Wiley)
Fast Second by Constantinos Markides and Paul A Geroski, published by Jossey-Bass
It is not often that you find a business book that really seems to be saying something new about business strategy but this book is clearly in that category. It is also much easier to read that most business books of the academic variety and this is mainly because it is laced with convincing examples that strengthen the fundamental argument.
This argument is that the whole concept of ‘first mover advantage’ – the benefit of being first to market – is an illusion that is not justified by the empirical evidence. There is a caveat here – that this only applies to what the authors call ‘radical innovations’, those that cause major change in the behaviour of consumers and have a disruptive impact on the market.
The authors – both from London Business School - also provide a convincing reason for this phenomenon and lots of evidence to prove that it happens. Their view is that the skills, structures and company cultures that are necessary to produce radical innovations are not the ones that can launch them onto the mass markets that are necessary for full exploitation. They also argue that it is a fallacy to think that all you have to do is change your culture to develop both types of skills. They regard this as an impossible dream.
Their answer for major established firms is not to try to become first mover innovators but instead to adopt a ‘Fast Second’ strategy. That is to allow the smaller more innovative companies to do what they call the ‘colonizing’ – the discovery of the product and its initial testing; and then themselves to handle the transformation of the idea into a mass market opportunity – what they call ‘consolidating’. They quote many examples of successful consolidators who are wrongly believed to be colonizers – Apple with the I Pod, Amazon with on-line book sales, Gillette with the safety razor.
The book makes most of its key points in the early chapters and, though at 170 pages it is not long by many standards, the authors could probably have made the essential points in an even shorter text. It has a practical approach, attempting to ask and answer the key questions that face those who are looking to grow their markets through innovation; for instance, when should you and when do you make the move as a ‘fast second’ innovator? How do you scale up the market into critical mass? What skills, attitudes and processes are necessary in the colonizing and consolidating roles? What are the likely winning tactics and strategies?
The book is an essential read for strategists and worth a scan for those with a passing interest. I was impressed but also found myself asking the question which would be even more interesting and relevant to most managers – how far does the ‘Fast Second’ concept apply to non-radical innovations? Having heard about the high proportion of failed product launches and seen examples of first mover failures in many case studies used on MTP courses, we have often questioned the validity of the first mover advantage concept in a wider context. Maybe that will be the next stage of research and a new book of the future.
This argument is that the whole concept of ‘first mover advantage’ – the benefit of being first to market – is an illusion that is not justified by the empirical evidence. There is a caveat here – that this only applies to what the authors call ‘radical innovations’, those that cause major change in the behaviour of consumers and have a disruptive impact on the market.
The authors – both from London Business School - also provide a convincing reason for this phenomenon and lots of evidence to prove that it happens. Their view is that the skills, structures and company cultures that are necessary to produce radical innovations are not the ones that can launch them onto the mass markets that are necessary for full exploitation. They also argue that it is a fallacy to think that all you have to do is change your culture to develop both types of skills. They regard this as an impossible dream.
Their answer for major established firms is not to try to become first mover innovators but instead to adopt a ‘Fast Second’ strategy. That is to allow the smaller more innovative companies to do what they call the ‘colonizing’ – the discovery of the product and its initial testing; and then themselves to handle the transformation of the idea into a mass market opportunity – what they call ‘consolidating’. They quote many examples of successful consolidators who are wrongly believed to be colonizers – Apple with the I Pod, Amazon with on-line book sales, Gillette with the safety razor.
The book makes most of its key points in the early chapters and, though at 170 pages it is not long by many standards, the authors could probably have made the essential points in an even shorter text. It has a practical approach, attempting to ask and answer the key questions that face those who are looking to grow their markets through innovation; for instance, when should you and when do you make the move as a ‘fast second’ innovator? How do you scale up the market into critical mass? What skills, attitudes and processes are necessary in the colonizing and consolidating roles? What are the likely winning tactics and strategies?
The book is an essential read for strategists and worth a scan for those with a passing interest. I was impressed but also found myself asking the question which would be even more interesting and relevant to most managers – how far does the ‘Fast Second’ concept apply to non-radical innovations? Having heard about the high proportion of failed product launches and seen examples of first mover failures in many case studies used on MTP courses, we have often questioned the validity of the first mover advantage concept in a wider context. Maybe that will be the next stage of research and a new book of the future.
From little acorns …….. by Julian Hammond, Training Journal, December
One of the problems with articles from magazines like the Training Journal is that there are too few from L & D Managers of major companies and too many from training consultants describing their products and their achievements in a self serving way. However, I have to remember how we wrote similar articles in the early days of MTP – including one where we suggested that all business schools were out of touch! – and that sometimes such articles contain a few ‘gems’ that are of value to all.
One such article is in the December edition. It covers the problems of a small training organisation trying to provide value for major company clients and the ways in which this can be achieved and maintained. Though directed mainly at trainers, it can be turned around into a specification for company L & D Managers who are looking for a responsive training company; in fact I would have preferred that slant within the article.
There is a lot of standard, superficial stuff about specifying quantifiable outcomes and transferring learning which I have been critical of in previous reviews; these goals are clearly valid and important but so many trainers make them appear as new ideas that are easy to achieve. They are not and it would be better for the long term client relationship to admit the extent of the joint challenge at the outset.
The interesting ideas from the article are these:
- Don’t try to sell solutions, listen to the need first
- Understand the client’s business and don’t charge for the investment of time to achieve this
- Represent the client business during training delivery
- Go the extra mile to meet the client need without worrying about minor costs
We would not agree with all these recommendations in every circumstance but we do share many of the values that underpin them. We would argue that, depending on the circumstances and the nature of the business, a sharing of the investment in time to understand the client business is often fairer. And though we like to be in a situation where we are representing the client’s views, some companies also want us to challenge current practices and encourage debate about change. This is a fine balance that has to be agreed up front for each course and client.
We do however agree with one interesting definition of success which the author puts forward. He says that he knows he has won when people on courses ask questions about their own organisation. We would also add that this is only the first stage; the second requirement is that the trainer can answer the question credibly, in a way that meets the learning objective and keeps the client happy. This is not as easy as it seems and often needs a long and trusting partnership to achieve.
It would have been good if this article could have made more of the challenges and the pitfalls involved in getting this balance right.
To access this article go to http://www.trainingjournal.com/tj/1836.html
Personnel Today, 25th November
Sadly the weekly journal Personnel Today rarely seems to produce any meaty articles on learning and development issues but I should mention a new report on page 2 of the above edition. At a recent ‘World of Learning’ conference in Birmingham a survey of learning professionals was revealed and it contained the – for many of us who have read recent articles – unsurprising conclusion that ‘lack of line management commitment and follow up exercises were the most commonly cited barriers to employees retaining information from courses’
The article then reports a row as to who is responsible for this failure. Bob Mosher of LearningGuide Solutions took the easy route that trainers often go for, blaming line management, whereas Ruth Spellman of the Chartered Management Institute blamed poorly structured training programmes. I have sympathy for both points of view and the answer is clearly that the failings are usually a combination of the two. Managers do often allow other priorities do get in the way of post course implementation but how many of us also design action planning sessions as an afterthought rather than within the mainstream design?
Ruth Spellman is clearly not a person who minces words; she said:
‘Perhaps learning professionals should spend less time talking and more time improving training schemes’
She also described a power struggle between line managers and training professionals over who controls workplace development. I hope that she is wrong and that others with a less confrontational approach realise that this is not an ‘either/or’ choice; the whole point is that there is a need for partnership to achieve the desired end – better retention and application.
Ms Spellman has probably achieved her objective – she has her picture and a headline. But she has also made a useful contribution to an ongoing debate.
The article then reports a row as to who is responsible for this failure. Bob Mosher of LearningGuide Solutions took the easy route that trainers often go for, blaming line management, whereas Ruth Spellman of the Chartered Management Institute blamed poorly structured training programmes. I have sympathy for both points of view and the answer is clearly that the failings are usually a combination of the two. Managers do often allow other priorities do get in the way of post course implementation but how many of us also design action planning sessions as an afterthought rather than within the mainstream design?
Ruth Spellman is clearly not a person who minces words; she said:
‘Perhaps learning professionals should spend less time talking and more time improving training schemes’
She also described a power struggle between line managers and training professionals over who controls workplace development. I hope that she is wrong and that others with a less confrontational approach realise that this is not an ‘either/or’ choice; the whole point is that there is a need for partnership to achieve the desired end – better retention and application.
Ms Spellman has probably achieved her objective – she has her picture and a headline. But she has also made a useful contribution to an ongoing debate.
Saturday 1 November 2008
Book Review: ‘Ahead of the Curve’ by Philip Delves Broughton, published by Penguin Press
In September I reviewed an article in Director magazine that produced an overview of this book and it motivated me to read the full version. It proved to be a highly informative and entertaining account of the author’s two years at Harvard Business School, well written and fascinating for anyone who is working in the learning field. Whether Harvard would appreciate it as much is doubtful because, though it has some positive things to say about the overall experience, there are many well argued and fundamental criticisms that challenge the whole concept of the international MBA offered by Harvard and other similar top schools. However, Harvard’s brand is so strong that they do not need to worry, at least in the short term.
The book is written as a clever combination of three elements. First, a vivid description of what it is like to be in a class of ninety – yes ninety – bright and ambitious MBA students and to be subject to the case method. This still remains the dominant teaching approach, even if now supported with some new technology and lots of visiting Harvard alumni. The second feature is a lot of well thought through discussion of what an MBA course is trying to do and the extent to which it succeeds. There are some excellent insights into what the author and the other MBA students are thinking, with a lot of critical feedback from the non-USA students, who produce some devastating criticism of the USA focus and Harvard’s complacent style. Many seem to be keeping quiet, gritting their teeth and going through the motions, just to get the certificate which will mark them out as special when they return to their own lands.
The third element of the content is a surprising bonus; some brilliant and easy to follow descriptions of a few of the concepts that the author found to be profound and useful. I knew enough about most of them – for instance Porter’s five forces – to be able to judge that the concepts were well understood and explained; for someone who has not been involved in business school level training before, the book would be an excellent way of picking up some fundamentals.
The book ends with the story of Broughton’s search for a job after his two years and the dilemma he faces. The course makes him question and challenge the motivation of many on the course who, despite questioning the role and status of USA investment bankers and management consultants, are lured there because of the money and the kudos. The author is tempted this way but, in the end, prefers to retain his self respect and be true to his values. This leaves him temporarily unemployed and, no doubt, with the time to write a book about the Harvard experience!
It would be fascinating to know how he feels about the investment now, two years on, and how many of the 40% of his fellow students who were lured into investment banking and consultancy will regret that decision now that a global recession is upon us. Though, as Broughton makes clear, the extent and power of the Harvard alumni network are quite staggering and they tend to look after their own first.
Certainly this is a book that is well worth reading, a painless way to learn more about business topics and the world of the business school.
The book is written as a clever combination of three elements. First, a vivid description of what it is like to be in a class of ninety – yes ninety – bright and ambitious MBA students and to be subject to the case method. This still remains the dominant teaching approach, even if now supported with some new technology and lots of visiting Harvard alumni. The second feature is a lot of well thought through discussion of what an MBA course is trying to do and the extent to which it succeeds. There are some excellent insights into what the author and the other MBA students are thinking, with a lot of critical feedback from the non-USA students, who produce some devastating criticism of the USA focus and Harvard’s complacent style. Many seem to be keeping quiet, gritting their teeth and going through the motions, just to get the certificate which will mark them out as special when they return to their own lands.
The third element of the content is a surprising bonus; some brilliant and easy to follow descriptions of a few of the concepts that the author found to be profound and useful. I knew enough about most of them – for instance Porter’s five forces – to be able to judge that the concepts were well understood and explained; for someone who has not been involved in business school level training before, the book would be an excellent way of picking up some fundamentals.
The book ends with the story of Broughton’s search for a job after his two years and the dilemma he faces. The course makes him question and challenge the motivation of many on the course who, despite questioning the role and status of USA investment bankers and management consultants, are lured there because of the money and the kudos. The author is tempted this way but, in the end, prefers to retain his self respect and be true to his values. This leaves him temporarily unemployed and, no doubt, with the time to write a book about the Harvard experience!
It would be fascinating to know how he feels about the investment now, two years on, and how many of the 40% of his fellow students who were lured into investment banking and consultancy will regret that decision now that a global recession is upon us. Though, as Broughton makes clear, the extent and power of the Harvard alumni network are quite staggering and they tend to look after their own first.
Certainly this is a book that is well worth reading, a painless way to learn more about business topics and the world of the business school.
Book Review: Bear Trap – the fall of Bear Stearns by Bill Bamber and Andrew Spencer, published by Brick Tower
I have to confess to a rather morbid fascination for books about high profile bankruptcies. I am sure that similar books about the fall of Lehmann Brothers are on the way but, in the meantime, this is the best book around for understanding how an investment bank can go bust and what it feels like to be part of it. This largely forgotten collapse of Bear Stearns, the USA’s fifth largest investment bank, was the first of the dominoes to fall in March this year but was ‘saved’ when the US Treasury intervened and arranged for JP Morgan to take them over at a knockdown price.
Bamber was a Managing Director – to give you an idea of size and organisation, he was one of 400 – of a division of Bear Stearns, one that, according to him, was operating very profitably. He and his co-author tell a story which does not try to hide the bitterness and frustration of someone who saw his net worth – as represented by shareholdings in the company – decline from $3 million to almost zero in one week. His bitterness is based on two complaints; that the collapse was based on rumours that were stoked up by jealous rivals and that the US Treasury could have bailed the company out by similar moves to those that are now being implemented by the US and other governments.
He feels that Bear Stearns was singled out but his reasoning falls down when you look at the subsequent chain of events which saw an even bigger bank – Lehmann Brothers – collapse even more disastrously, without even the lifeline of a JP Morgan takeover. As you read about the turmoil that followed Bear Stearns’ collapse, you wonder how and why the US authorities did not learn from it and why they allowed Lehmann to go down even more spectacularly, thus triggering the chain of events that led to the global crisis.
Apart from the fascinating story of the happenings and feelings in the week when the company went from hero to zero, there are some excellent, down to earth explanations of the new language that we are all hearing about; for example sub-prime mortgages, hedge funds, selling short, structured derivatives etc. Sometimes the explanations go on a bit too long but they are simple and comprehensive.
The interesting postscript is that, despite his resentment of the JP Morgan takeover and the knockdown price that he claims was forced on them by the US Treasury, all of Bamber’s team were offered similar jobs at Morgan. But Bamber, having written the book, decided he had had enough of being a master of the universe and the epilogue has him surfing in New Zealand.
Bamber was a Managing Director – to give you an idea of size and organisation, he was one of 400 – of a division of Bear Stearns, one that, according to him, was operating very profitably. He and his co-author tell a story which does not try to hide the bitterness and frustration of someone who saw his net worth – as represented by shareholdings in the company – decline from $3 million to almost zero in one week. His bitterness is based on two complaints; that the collapse was based on rumours that were stoked up by jealous rivals and that the US Treasury could have bailed the company out by similar moves to those that are now being implemented by the US and other governments.
He feels that Bear Stearns was singled out but his reasoning falls down when you look at the subsequent chain of events which saw an even bigger bank – Lehmann Brothers – collapse even more disastrously, without even the lifeline of a JP Morgan takeover. As you read about the turmoil that followed Bear Stearns’ collapse, you wonder how and why the US authorities did not learn from it and why they allowed Lehmann to go down even more spectacularly, thus triggering the chain of events that led to the global crisis.
Apart from the fascinating story of the happenings and feelings in the week when the company went from hero to zero, there are some excellent, down to earth explanations of the new language that we are all hearing about; for example sub-prime mortgages, hedge funds, selling short, structured derivatives etc. Sometimes the explanations go on a bit too long but they are simple and comprehensive.
The interesting postscript is that, despite his resentment of the JP Morgan takeover and the knockdown price that he claims was forced on them by the US Treasury, all of Bamber’s team were offered similar jobs at Morgan. But Bamber, having written the book, decided he had had enough of being a master of the universe and the epilogue has him surfing in New Zealand.