Wednesday, December 28, 2011

Bring Your Dog to the Vet, Stop for a Hamburger on the Way Home


A long time ago at a company meeting I tried to say something positive about productivity.  The revenue generated by each person in the company had grown dramatically over the past few years and I wanted people to know how much we valued their efforts.

In doing so, I made two mistakes.

First, in general terms, we’re all in favor of increased productivity.  In many ways our economic well-being depends on it.  However, what’s admired generally is not necessarily treasured individually, because productivity writ small often means that the value I’m providing you is growing faster than what you’re paying me.   Increased productivity down in the trenches feels like you owe me.

Second, I naively used the word “headcount” during that fateful employee meeting, as in “Our revenue per headcount has skyrocketed in the last 18 months.”  Headcount is a perfectly ordinary word that helps measure labor.  If you work 40 hours a week and I work 20 and someone else works 10, then it's easier to say that we have “1.75 heads” than we have “1.75 equivalent people.”

However, one person’s ordinary measurement is another’s insult.  A few minutes after the meeting a group of employees had gathered in my office to say they were hurt by being referred to as “headcount.”  I explained why I used the term, apologized, and removed it from my public vocabulary.

I know what the problem is, and it’s real: Once we turn something into a unit of measure, especially a unit of productivity, we devalue it.  Sometimes it loses its humanness.  Sometimes it loses its soul.

There was a good piece recently in the New York Times Review of Books about animal rights literature where I learned a new term: speciesism.  In simple terms, it means we value certain species of animals, like our pet cats and dogs, to the point where they become part of the family.  Meanwhile, other equally sentient animals--meaning creatures that can experience pleasure and comfort and fear and pain every bit as much as our cats and dogs--are treated brutally on our farms and in our slaughterhouses.  It’s discrimination based on species.

I bring my dog to the vet and on the way home stop for a hamburger.

What happens to cows?  They become heads of cattle.  Units of measurement.  And pigs?  Pork bellies.  They get traded on a commodities exchange.

If the cows could get together and visit the farmer who just gave the speech about productivity, they’d probably tell him that they’d really rather be referred to as Bossie and Elsie and not “heads of cattle.”  Just look up “head of cattle” on Google and you’ll see questions like “How many head of cattle can you have on an acre of land?”  That sounds an awful lot like a unit of production to me, and an animal that’s just lost its soul.

The great blight on America was slavery, when human beings were measured in terms of their productive value.  Even Jefferson wrote ugly when he realized he could enhance his wealth by having his slaves reproduce rather that acquiring new ones.  "[A] woman who brings a child every two years is more profitable than the best man on the farm."  That’s Jefferson applying a make vs. buy decision to human beings.  That’s a Founding Father illustrating vividly that turning  living creatures into units of production does as much to debase the  measurer as the measuree.

It’s Jefferson’s unintended gift to a world in which we measure everything.  We possess dozens, hundreds, maybe thousands of sensors for every person in America.  A recent McKinsey study concluded that data being generated globally increases by 40 percent annually.  All that data encourages us to measure stuff and make it better.  Be more efficient.  Raise our productivity.  Increase the yield on our head of cattle.  Get more pork bellies for our dollar.  Improve our revenue per headcount, as it were.

It reinforces why “headcount” was so offensive all those years ago.  It also helps me understand why our youngest daughter is an avowed vegetarian.  Two good lessons, I think, to start the new year.


Monday, December 19, 2011

The Changing Christmas Tradition

It's possible this house has an artificial tree because a
live one is "too much of a hassle."
Have you noticed that nothing really stays the same?  Even tradition.  

Christmas Trees.  40% of U.S. households purchased live Christmas trees in 1991 and only 23% last year.  Baby  boomers stop buying live trees as they get older.  The latch-key generation never had a live tree.  Artificial trees from China have grown in quality and skyrocketed in demand.  In 2011, consumers will spend $1 billion on artificial trees and $984 million on real trees.  That's called a "tipping point."

Lights.  Does it seem to you that more and more houses are displaying more and more lights?  And, we've moved out of our white icicle obsession and are now seeing colors again?  Big inflatable snowmen?  Giant electronic candycanes?  Is it the impact of Youtube?  Trans-Siberian Orchestra?  Does it seem strange that we no longer want the hassle of a live tree but will crawl around in our bushes for a week after Thanksgiving stringing lights?

What if I'd told you in 1980 to "invest in companies making cheap plastic lights because every family in America will purchase one for every single window in the their home by 2011."  Would you have believed me?

On-line Shopping.  My wife returned from a shopping excursion recently and said it was busy, but not as crazy as it's been in past years.  The retail numbers this season--projected up almost 5%--are excellent.  My conclusion: We are, for the first time, seeing a visual impact from on-line shopping.  Perhaps the information highway will one day make the mall safe again. 

Traditional Delivery.  If somebody is winning besides Amazon, it would have to be FedEx, UPS, and maybe even the US Postal Service--which will still lose more than $5 billion this year.  As on-line shopping continues to grow, I wonder if the Post Office will begin to look like every other retailer: 40% of its revenue and all of its profit will be made in the six weeks before Christmas?  A thought: Stop raising the price of a first class stamp when we all have email, and dominate the last mile with cheap delivery of my holiday boxes. 

Outsourcing.  Fifteen years ago we ran out of an electronic component because of Chinese New Year and it caught everyone off-guard.  Now, companies have to plan their Q1 inventories around this Chinese holiday.

Cards.  I can't tell what's going on yet.  We're definitely getting and receiving less, but we're still receiving from folks we keep in touch with via Facebook--the very folks I thought we'd lose first.  On the other hand, we're getting more and more mechanized cards, untouched by human hand.  Which is, I suppose, like a Facebook posting.

Like I said, I can't yet divine the trend except that the Post Office is losing, and so is Hallmark.  

Christmas Music.  Rock artists think that re-recording The Little Drummer Boy is a good thing.  It isn't.  Mel Torme made enough money from The Christmas Song ("chestnuts roasting. . .") that he could have retired on that single song.  "Santa Claus Is Coming to Town" and "Winter Wonderland" are both vintage 1934.  "White Christmas" was 1942 and for the next decade, songwriters invented the modern Christmas canon: "I'll Be Home" (1943), "Have Yourself a Merry Little Christmas" (1944), "Let It Snow" etc." (1945), "The Christmas Song" (1946), "Here Comes Santa Claus" (1947), "Sleigh Ride" and "Blue Christmas" (1948) and "Rudolph" (1949).  The 1950s were fertile as well, from "Frosty" to "Silver Bells" to "I Saw Mommy Kissing Santa Claus" to "Jingle Bell Rock" and "Rockin' Around the Christmas Tree."  Then, things went sideways.  Vince Guaraldi was a bright light in the Dark Ages, but the ages stayed pretty dark with the melancholy "Do They Know It's Christmas" (1984).  Lately, we've had to rely on Mariah Carey.




I saw a chart the other day (pasted above) showing that most of the 20 most-played Christmas songs were all written in the 1940s and 1950s, proof that the Baby Boomers were trying to recreate their childhoods every year.  I say: Write something worth listening to and we'll beat a path to your download!

Sports.  And Christmas.  Christmas and Sports.  Football on Christmas Eve. Basketball on Christmas Day.  How did THAT happen, anyway?  And don't even get me started on the bowl games.

On the other hand, if we were really hung-up on a traditional American Christmas, we'd be roaming the town getting roaring drunk and harassing the rich neighbors, as I wrote about here in 2008.  Maybe Mariah Carey, cheap candles and an artificial tree or two aren't so bad after all.

Merry Christmas!



Sunday, December 18, 2011

Who Cares if a Tablet is a PC?


Ted Levitt identified a central truth in strategy when he wrote that how we define "the business we're in" can create or destroy opportunity.

The drama playing out now is in the personal computer world.  It centers around whether a tablet--like an iPad--is a PC or something else, something entirely new.  

Before his death, Apple’s Steve Jobs said, no, a tablet was not a PC--that, in fact, we were entering a post-PC world.  Microsoft’s Steve Ballmer disagreed, saying that the tablet was absolutely, positively a PC.

On the surface, it seemed like just another Apple-Microsoft spat.

Ironically, if the tablet is measured as part of PC sales, as the British research firm Canalys holds, then sometime next year Apple will knock H-P off its perch as the number one PC-maker in the land.  Conversely, if the tablet remains a separate beast, then the PC industry looks moribund and on the downside of its lifecycle.

Who really cares?  Not Apple, which is going to sell tablets no matter what we call them.  Not Canalys, which has to make the decision once and just be consistent in its reporting.  Not companies that rely on Canalys because they can, presumably, add and subtract columns and total the world anyway they wish.  And not most of us, who will buy what we need based on what it does, not its strategic definition.

But, there is one group who really cares: the employees of Microsoft.  Steve Ballmer undoubtedly knows that, and it explains why he’s taken such a emphatic stand on what seems a secondary issue of product definition.

More than 90,000 Microsoftians arise every morning, part of what is still an immensely powerful, profitable company.  If they choose to believe the tablet is something different from and post-PC, and their business is to optimize Microsoft’s traditional PC profit flows, then employees become one giant milking machine.  Their only goal is to cash in on a 30-year investment.  The PC market may be falling, but there’s a lot of money to be made before the fat lady sings, and there’s nothing ignoble about a milking strategy.

However, by defining the tablet as a PC, Steve Ballmer gives his worldwide team the opportunity not only to optimize the old, traditional platform, but to take everything they’ve learned and apply it to an entirely new platform.

Which kind of morning would you like to arise to, for the next decade, were you working at Microsoft? Which kind of future would you appreciate were you an investor?

Which 90,000 people are going to have more fun?

Defining the tablet as a PC doesn’t mean Microsoft will be successful, just as the railroad wasn’t successful just because it defined its business as “transportation” and competed with cars and planes.  And, it will inevitably mean more investment, riskier investment, and lower margins.  However, without the definition being broad and flexible and opportunistic, there’s no chance to compete in the new world at all.

I’m still of the opinion that when commentators discuss the Big Four--Apple, Amazon, Google and Facebook--they are missing the fifth key player, one that will be around innovating for many years to come.  Defining the tablet as a PC isn’t a Steve Ballmer vs. Steve Jobs spat; it’s an essential element in keeping Microsoft relevant and competitive.



Friday, December 16, 2011

Only My Second R-rated Post

My first post "rated-R for mature themes" was here, back in June 2008.  It was about selling stuff people wanted but weren't allowed to admit they wanted.

My second post, this time "rated-R for holiday violence," is the display window of Town Cutler on Nob Hill in San Francisco.  We were walking by the other day and someone in my group gasped.  And then I heard my wife say, "Just don't put it in your blog."

That's all the encouragement I needed.


Sunday, December 11, 2011

Wednesday, December 7, 2011

Revisiting Swarm Intelligence


I was at a very pleasant business dinner the other evening with three smart gentlemen discussing everything from the presidential election to cold chain regulatory trends.  I mention these topics only because what happened next, and what happens every single time, occurs regardless of the table's combined IQ.

The waitress appeared and asked (what is apparently) the hardest question known to mankind: “Would anyone like dessert?”  In our case this “sudden group decision” turned four intelligent adults into four blithering idiots, twitching and staring at their laps.  Fortunately, one of our number had his PhD and recovered long enough to order a single slice of chocolate chunk pecan pie with four forks--a brilliant solution to an otherwise intractable problem.

I wrote about this phenomenon here in the context of swarm intelligence, the idea that dumb little ants running around in circles can come together in a group that is able to build complex structures, defend its turf, and write monographs about black holes like Stephen Hawking.

Ants.  Bees.  Birds.  Bacteria.  Swarm theory is an accepted theory.  My theory is essentially the opposite: All too often, people who are otherwise smart, ethical, good human beings come together in a group and become absolute jackasses.  Rush hour.  The Kennedy administration in The Best and the Brightest.  Enron.  Ordering dessert.

In fact, I call it “Dessert Intelligence.”

You might think that the falling IQs around ordering chocolate chunk pecan pie are all about politeness and deference.  In Outliers, Malcolm Gladwell informed us that certain cockpit crews are so deferential that they crash their planes.  I call that stupid.

Recently, we’ve had some really menacing, very sad instances of Dessert Intelligence.  A local high school basketball team imploded over a reckless group hazing incident.  Oklahoma State fans rioted after their team’s victory.  Students at Dean College were expelled after participating in a group assault.  Penn State football--need I say more?

I don’t know where this phenomenon falls in academia--economics, sociology or psychology--but having brilliant people study Dessert Intelligence (preferably not in groups) seems to be especially important.  After all, the greatest single technological innovation in the last generation allows us to create and network groups faster and more efficiently than at any time in human history.

Three lessons here: First, guard your IQ in crowds.  Second, the Web really might be the technological embodiment of the great dessert question, making us all stupid. (Think: Flashmob-robbery, singing babies going viral, and Kim Kardashian being the number 1 search term in 2011.)  

Third, it's not such a bad idea to bring a PhD to dinner.



Sunday, December 4, 2011

The "All 22": A View from 50,000 Feet


Every play in every NFL game is filmed by the League from multiple angles, ReedAlbergotti tells us in the Wall Street Journal.

On its way to accumulating about $4B in annual broadcast rights, the NFL is willing to sell virtually every angle it films except one.  It’s called the “All 22” and its taken from a vantage point that shows the entire field, what every player does on every play.  “NO ONE gets that,” an NFL spokesman said.

Who ran, and which way?  Who blocked and where?  Who didn’t do his job?  Which coach got out-coached?    How is the game plan unfolding? Without the All 22, it’s impossible to adequately analyze a game.   Most of us see only a fragment of what’s happening on the field, and that includes the experts who are explaining the action to us.

In other words, access to the All 22 makes everyone a whole lot smarter.  The NFL knows that and apparently doesn’t want to put up with a better-informed fan base.

Wouldn’t it be great if there was an All 22 angle for your life?  For your family?  For your job?  A military general might find his on the side of a mountain, overlooking the field of battle.  A parent may find hers from a single, unexpected discussion with her teenager.  A fractured family might find their All 22 in the gathering after a funeral.  A CEO may find his or hers from a customer visit, a lunch with employees, preparation of a business plan, a visit from a peer CEO, or a great board meeting.

The air is way too rarefied to hang around long at the All 22, 50,000-foot level, and there are (mostly unpleasant) words to describe people who try.  On the other hand, you must find a way to visit from time to time because there are also (mostly unpleasant) words to describe people who spend their days in the details and their lives in the weeds.

What we know is that the NFL won't sell its All 22.  Coming from one of the great financial and business successes of our generation, that should be a clue, no?





Sunday, November 27, 2011

Thinking Inside the Box


Many years ago we had a shareholder who would visit from time to time to offer advice.  I valued these visits, though I’m not sure I always completely understood the counsel I received.  In particular, I was told on a periodic basis that I should “put it in a sock before I put it in the bag.”

I thought perhaps my shareholder friend, a native Norwegian who emigrated to America after WWII and made his fortune, was simply mistranslating some Old World advice. Maybe the word for “sock” in Norwegian was, well, I don’t know.  But not “sock.”

Anyway, he always said it in such a way, sort of with a wink, that I was embarrassed to inquire further.  I felt by asking I might violate some sacred code of the Sock and Bag Guild.

I was reminded of this advice the other day by none other than Peter Drucker, writing about people attempting to fix problems by innovating in all the wrong places.  

In the early 1950s, ocean-going freight was in big trouble.  Costs were rising, ports becoming congested, deliveries slowing and air freight looking better all the time.   The industry was innovating by trying to build faster vessels that required less fuel and smaller crews, all good ideas.

The game-saving innovation was launched quietly enough in April 1956 when a trucking entrepreneur placed 58 containers aboard a ship headed from New Jersey to Texas.  “Containers” means “big metal boxes.”  In took ten years, but in 1966 a Sea-Land ship carried the first international shipment of containers.  By 1975 vessels and ports were being built to accommodate thousands of big metal boxes.

We now think of this as “the container revolution.”  You might think of it as blueberries on your cereal in January, or maybe just an extraordinarily better standard of living.  It all came from metal-benders, guys who were losing jobs and prestige to technology innovators even as they were changing the world.

The secret to the innovation, of course, was decoupling two activities traditionally done serially but, with a simple metal box, now done in parallel.  While the ship was sailing, all of the packing could be done on land.  The result was ships spending 75% less time in port, a 60% reduction in shipping costs, and a five-fold increase in volume over three decades.  

There are some interesting lessons here.  Sometimes the simple solution has the greatest impact.  Low tech can rock.  Look to tough competitors (like truckers) for profitable solutions.  Never overlook process.  Peter Drucker is still worth reading.

The most important lesson for me, however, was finally making sense of my old shareholder’s advice.  Even though I was never, ever sure if I successfully “put it in a sock before I put it in the bag,”  I am now completely convinced that I should always “put it in a box before I put it in the boat.” 

Maybe that's what he meant all along.





Thursday, November 17, 2011

Spare Me Your Vision


If you’ve ever launched a business, you’ve been faced with the task of writing a Vision statement and a Mission statement.  One does one thing, the other does another, and I can never keep the two straight in my head.  But I do know that having a clear idea of what the business should look like three or five years down the road--what I call the “end state,” which I can keep straight--is awfully important to running a successful enterprise.

Now, if you’ve ever run a business, and published a Vision and Mission statement to the team, you have undoubtedly run into this situation: Some consultant will meet your team, perhaps at an offsite training, and report back to you that, regretably, nobody but nobody knows the Mission and Vision of your company.

You can gnash your teeth and beat your breast, knowing that you have been diligent in spreading the gospel.  Maybe, however, there’s something else going on.

I’m a New England Patriots fan, and every Monday Coach Bill Belichick is interviewed on the radio about Sunday’s game.  Belichick is, without a doubt, the worst interview in sports.  He reveals nothing.  When the Patriots play badly he says, “We didn’t make enough plays to win.”  When they play well he says, “We made enough plays to win.”  If you are looking for some kind of erudite exposition of the game, you’ve come to the wrong interview.

But Belichick says something so often it’s almost humorous: “We just need people to do their job.”  It's a kind of mantra for him.  When his players are interviewed they will often deflect a question by saying “Coach just needs me to do my job.”

Just do your job.  That’s what one of the smartest, winningest coaches in the history of football tells his players: Just do your job.  Is there a game strategy?  Of course.  Belichek knows it, as do his coaches.  I assume he discusses it with his team during the week.  But he doesn’t ask his players to memorize the strategy, or be able to recite it.  That’s his job.  When he creates the game plan each week, that’s his job.  And, when his wide receiver runs five steps, cuts left and looks over his inside shoulder for the ball, that’s his wide receiver’s job.

Just do your job.  That’s how the Patriots win.

There’s a reason your team doesn’t know the Vision and Mission by heart: It doesn’t help them do their job.  I promise, if it did, they would know it cold.  It’s not that they don’t want to know it, of course, or be reminded, or recognize that they’re contributing to it.  They just don’t need it memorized to do their job.

In the mid-1980s I was managing cable TV properties in Illinois.  These were the go-go days of cable when we were opening up new neighborhoods and people were chasing the cable TV truck down the street hoping to schedule an installation.  One day I got into it with one of our key suppliers--their fault, no doubt--and they withheld shipment of some important material we needed for installs.  We went from dozens of happy new customers a day to none, and the phones began ringing off the hook.

Finally, on a Friday, I solved the problem and, in a show of support (or punishment, depending on your perspective), asked our management team to be in the warehouse bright and early on Saturday morning to help assemble product for the installers and get them on the road quickly for special weekend installs.

There we were, putting together installation packets, when Jeff, the Warehouse Manager came over.  “Thanks,” he said, “for helping out.”  I beamed.  What a great GM I was.  “But,” he added, “if you did your job, you wouldn’t have to do mine.”

That message stuck, big time.  (It’s 28 years later and I still remember.)

All of which is to say, if you are running a business, your job is Mission and Vision and End State.  Figure it out.  Make sure the team is working toward it.  Go ahead and sell it internally from time to time.  Do your job.

But your Customer Service Manager is supposed to make customers deliriously happy.  Let him do his job.  Your VP-Sales is supposed to sell tons of stuff.  Let her do her job. 

Mission and Vision have their place, but Bill Belichick is right.  One critical secret to success is simple: Just do your job.

Monday, November 14, 2011

Another Kind of Leadership

We've been reading a lot lately about Steve Jobs' leadership style, and for the last generation about guys like Jack Welch, Bill Gates, Richard Branson and even Donald Trump.  In most cases, the purpose of leadership appears to be about creating something useful, maybe beautiful, and inevitably profitable.

Last weekend I attended the girls cross-country banquet at our local regional high school.  The student population at the school is about 1,400.  When the girls run meets, they typically run against teams of 18-22 girls.  In some cases, more like 8-12.  A really big team would have 35 runners.

Our girls cross-country team this year had 127 runners.   They were all at the banquet whooping it up, singing, accepting varsity letters and gifts and saying unbelievably nice things about one another, their coaches and their parents.  And they were hugging.  (There's a lot more hugging in high school these days than there used to be when I attended.  In fact, this is how much hugging I remember: none.)  Today, female high school cross-country runners apparently hug all the time.

The coach of the team is in his 36th year.  There's something about what he does, the way he does it, and the way he inspires the team that attracts 5 or 6 times the number of girls that other, comparably-sized schools attract.  And for a sport that involves running long, hard distances one day, and hills another, and track workouts another, and a 6 a.m. Tuesday workout if you didn't beat your best time at the meet on Monday--these girls are unbelievably happy.

This coach will never be on the cover of Wired, or featured in Business Week.  We will never read about his "10 immutable rules of leadership."  He exercises a kind of leadership that isn't about profit.

But it's the kind of leadership of which, I am certain, we could use a lot more.

It turns out the girls won the state tournament in their division this year.   But even if they hadn't, you just needed to sit through a little bit of the banquet to know that it would have been a very good year anyway.

Thursday, October 13, 2011

Yes, Of Course: You’re a 10


An irksome downside to the Digital Economy we’ve created is the need to keep the data-tanks full.  That means we’re being asked incessantly for our opinions.  At any moment we can be sure that some service vendor somewhere desperately wants our rating.

It’s getting to be one of hidden costs of doing business in what was supposed to be a frictionless world.

For instance, I love Amazon, and I love to purchase things on-line much more than shopping in a mall.  But every time I buy something on Amazon I’m asked to rate the vendor.  If I forget, I am sent a reminder email.  One of the charms of the mall turns out to be that I can buy something and walk out of a store unmolested.

Consider: I need to opine if I use Amazon to purchase two boxes of ink cartridges for my printer.  More than that, what the vendor really wants is my endorsement.  What can I say; you did a marvelous job shipping me two boxes of ink cartridges?

On ebay, I have to rate the vendor.  If I don’t, the vendor writes me to ask if something went wrong.  

Here’s a good rule, my Vendor Friends: If you’re somewhere between a 3 and 8, chances are we’re aok.  I don’t know if I can register much more enthusiasm for a transaction involving ink cartridges than a 5 or 6 anyway.

If you’re a 1 or 2, I’ll contact you. Trust me.  If you’re a 9 or 10, I’ll tell my friends.  Trust me on that, too.

That’s my global rating scheme for the Digital Economy.  You really don’t need to ask me any more than that.

And Amazon and ebay are nothing--and I mean nothing--compared to my local new car dealer.  Toyota, GM, Ford—they’re all the same.  Relentless.  It makes a sham of analytics.  Was my stay in their lounge while my car was being serviced a “10”?  Really?

Well, they did serve little blueberry muffins and hot coffee in the lounge, and if that’s done to get a “10” then I endorse it wholeheartedly.  But truthfully—having little blueberry muffins and watching Matt Lauer on a wide screen TV could only really ever be—what?—a 6? 

Now, if you had offered me a huge morning glory muffin with my name across the top drizzled in icing—in calligraphy—now we’re talking “10.”  But that’s what it would take to get a “10” from me in your service lounge.  You don’t have the money or energy to bother, and I don’t want you to bother.

In other words, the things in my life that rank “5” in importance probably only need a “5” in delivery and I’m happy.  A car service lounge: 5.  Just give me a clean place to work.  A $2.00 cup of coffee: 7.  Hernia surgery: 10.  You see?

One time my local car service manager pulled me aside and said, “You’re probably going to get a survey by mail or phone after you leave.  If I receive anything less than a ‘10’ it’s considered ‘failure’ around here.  I’d appreciate your help.”

Wink.

OK.   You’re a “10.”  Really.  But please, just stop asking me.   


  

Wednesday, October 5, 2011

Why San Francisco Is This Century’s Boston


From time to time someone will tell me that Boston and San Francisco are alike.  I’ve been to both and I know the truth.  Each is near water and each has buildings, but after that it seems to me like a pretty weak resemblance.  

In fact, I would call Boston a great national city; people visit to see Paul Revere’s home, Fenway Park and eat lobster.  Then they go home.  

However, San Francisco is a great world city that sucks people in when they visit and holds onto them.  Its gravitational pull is very strong even here on the East Coast; I myself lost two brothers to the belly of the beast.

In fact, I believe that San Francisco is the great, iconic American city of the 21st century.   And it’s all wound tightly into my emerging theory of American Exceptionalism.

I got interested in the topic herebut the abridged version goes something like this: One of the great strengths of the American people is that they feel exceptional, meaning they fully expect to lead the world to some bright, new future by shaping history--not being shaped by history.  Daniel Rodgers said American exceptionalism is about “suspending the very laws of historical mechanics.”   Gordon Wood says, “It’s a very, very controversial term among academics, because it seems to suggest to some of them that we are superior to other people. I don’t think it has to take on that connotation. But certainly Americans, throughout the 19th century, felt that they were exceptional, that they had a special role,” Wood says. 
“If you don’t like exceptionalism, then you don’t like Abraham Lincoln, because that’s what he’s saying: We have a special responsibility to show the world that democracy can work. We’re the last best hope — all of those phrases that Lincoln used to mobilize the North, to preserve the Union, were based on his sense that we were an exceptional nation that had a special responsibility to promote democracy.”
President Polk summarized by saying America believed its history lay ahead of it. That’s the crazy talk of people who think they’re exceptional.

Let’s be clear, though: American Exceptionalism doesn’t mean that Americans really are exceptional, just as Marines aren’t necessarily the finest fighting force in the world, or Starbucks doesn’t make the best coffee.  (Just don’t try to tell that to a Marine or a Starbuck’s executive.)   What’s important is that they happily drink their own soup, which allows for exceptional things.  In America, it probably put a man on the moon.  That was good.  It also probably tried to plant democracy in the Middle East.  Crazy stuff like that.

Now, here’s where Boston and San Francisco come in. 

Boston, I believe, was the original seat of American Exceptionalism.  This was thanks to John Winthrop’s desire back in 1630 to plant “a city upon a hill”--God’s shining example for the entire world to gaze upon.   This was a kind of exceptionalism built on religion, and it held strong for over a century and only began to fade around the time of the Revolution when more and more Americans wanted to go to brunch and read the New York Times on Sunday mornings.  Not to mention the emergence of disestablishmentism, when places like Massachusetts finally took the Constitution seriously and stopped forcing official churches on its citizens.

So, the age of religious exceptionalism, when America was going to lead the rest of the world to a new Heaven on Earth, had Boston as its symbol and looked something like this:


Of course, even if Boston didn’t seem any more exceptional than London or Moscow by 1820, Americans weren’t ready to give up their Exceptionalism.  It just required, shall we say, a little shift in emphasis.   In fact, after the American Revolution, Americans thought they might teach the rest of the world how to become democratic and free.  This was round two of American Exceptionalism—perfection through a Republic--and the gravity shifted to the nation’s capital.  Boston gave up its status as the iconic American city to Washington, D.C.  


This all felt right until the country almost fell apart in the Civil War, which called into question (and not for the last time) our nation-building abilities.

Not to worry, however, as America had taken hold of the Industrial Revolution, turning mass production and commercial enterprise into a new form of exceptionalism.   If we couldn’t outpray or outgovern the rest of the world, we could certainly outsell it.  The great American beacon was capitalism and our newest iconic city became New York City--with Wall Street and Madison Avenue its gravitational center.   We worshipped at the shrine of mechanization, the electrical grid, the internal combustion engine, and GNP.  Now things looked like this:


Mind you, these are not hard and fast periods.  American Exceptionalism in religion still exists, though Boston is not necessarily its center.  (The Mormons, for example, believe the Garden of Eden was near Independence, Missouri, which is also where the New Jerusalem will be.)  There are still plenty of Reagan Republicans who were happy to pit American political exceptionalism against any number of evil empires.  Certainly, too, we’re still the largest and strongest economy on earth.

However, along came the Great Depression in 1930 when Americans could no longer trumpet their variety of capitalism as the Second Coming. 
 
So, what was left?   Of course.  Enter technology.  In the last generation, Americans have decided that we will lead and save the world once again, but this time with software and apps and iPhones and cool technology.  And where’s the capital of American (and world) technology?   San Francisco.  My chart now looks like this:


So, that’s my theory.  It says Boston and San Francisco really are alike, but less as 21st century sister cities and more as bookends to almost 400 years of American Exceptionalism.   San Francisco is doing its best to keep the “city upon the hill” dream alive.  We’ve traded Heaven on earth for the Singularity, but one way or another we’re determined to lead the world to the next place, wherever that turns out to be.

How do you truly know when you are exceptional?  It’s when people think you dress weird and act strange and it’s easy to hate your guts, even as they envy you.  Boston’s had all that going for it.  Washington and New York, too.  The black t-shirted, coffee-swilling folk in San Francisco are well on their way.

The problem, of course, is that if China or India surpasses America as the technology capital of the world sometime later this century and starts inventing all the coolest stuff, Americans are just about at the end of their Exceptional ropes. 

But fear not; you couldn’t have convinced anyone in Boston in 1835 that the hick town of Yerba Buena out on the West Coast would be the most American city in America in 2011. 

The French may have exceptional food.  The Germans may have exceptional cars.  Americans may have burned through exceptional religion, democracy and capitalism, but no worries.  We’ve got technology and San Francisco.  

When that runs its course, which it will, we’ll just think of some new way to be exceptional.  We always do.

Friday, September 30, 2011

Business Writing: What We’ve Lost



I've been involved in a research project for the last eight months that has allowed me to spend time in one of the finest corporate archives in the world.  The documents I've read span the last 110 years, back to the turn of the twentieth century.  The first 40 years are particularly fascinating because they comprise the correspondence, memos and field reports of the seven entrepreneurs who founded the company.
  
Six of the seven men were college-educated engineers.

After a few months of work in the archives, here’s what struck me most: All seven men were superior writers.  I mean really, truly good writers.  A couple probably could have made a career of it.  Their correspondence with one another and their customers, their technical reports, and their marketing and sales literature were all impeccably authored, powerful, sometimes funny and occasionally biting--and an absolute joy to read.

It took me a couple of months of wading into the material to understand how remarkable this was.   These were not English majors.  They were often dealing with dense, technical topics.  But there was nothing sloppy or short-cut about how they expressed the written word.



It reminded me of a sports radio program I like.  It features two hosts.  Both hosts are knowledgeable, but I realized recently that I found myself gravitating more to the opinions of one over the other.  That’s when it donned on me: The host that consistently offered the more cogent, nuanced arguments also happened to be a long-time columnist for one of the local newspapers.  Two or three times, week in and week out, this “host-columnist” writes a thoughtful piece designed to argue some point of view.  While the “sportscaster host” certainly isn’t dumb, I can hear a clear difference in the way he assembles and delivers his opinion.

The act of writing is meaningful.

I was at a presentation last week that relied on a set of PowerPoint slides.  It was a very strong deck and accomplished what was intended. Still, I wondered what we may have lost in the transition from business memo to PowerPoint over the last ten or twenty years.  Maybe just a slew of needless conjunctions?  Certainly a bunch of atrocious English.  In fact, perhaps PowerPoint, email and text have leveled the playing field so that the entrepreneurs of 1911, forced to give up their memos, would sound very much like the entrepreneurs of 2011.  Good ideas would win out, undeterred by poorly concocted prose.



I’d be the first to admit that I like PowerPoint because it’s a whole lot easier than writing a full business memo.  There’s no part of me pining for the days of quills and penmanship.  But my sense is that we’ve lost something by not forcing ourselves to lay out ideas and to build arguments in prose.   I can’t prove that, but I don’t think anything has come along to replace the disciplined thinking that we’ve given up.

I suppose, too, that I’m expressing future sympathy for the business historian of 2111 who will, a century from now, try to paint a picture of the fortunes of the successful company launched in 2011.  Instead of the beautiful prose I found in my archives, he or she will be left with a thousand mind-numbing PowerPoints, 100,000 terse emails, and a million ungrammatical text messages.


Friday, September 23, 2011

Hasn't Margarine Always Looked Like Butter?


In 1998, Beloit College launched its first Mindset List, designed to give faculty and staff insight into the worldview of the incoming freshman class.  It turned out to be startling.  We were told that the class of 2002 couldn’t sound like “a broken record” because it had never owned a record player.  It did not remember the Challenger blowing up, the Cold War, or a world before AIDS or MTV.  Jay Leno had always hosted the Tonight Show,

If you don’t have a clue how strange that all sounds, then you likely graduated after 2002.  If you want a sensation similar to the one I’m feeling, however, this year’s list points out that the class of 2015 has always been able to get American tax forms in Spanish, free music downloads and rides in electric cars.  Ferris Bueller could have been their fathers, and--what’s that you say?-- Amazon is a river in South America?

Needless to say, the Beloit list caught on like wildfire.  Today, the site gets a million hits a year.

The list demonstrates just how quickly the modern world is moving.  But the authors, Professors McBride and Nief, have done us one better in their great new book, The Mindset Lists of American History.  For 150 years, from 1880 to 2030, they simulate the phenomenon of present-mindedness.  “Every chapter,” they note, “is written as though it were composed during the summer following that class’s high school commencement.”  It’s fun and funny, but more than anything, demonstrates that surprising and often radical change has been part of the American experience since the nineteenth century. 

For example, the members of the class of 1898, born in 1880 (including Douglas MacArthur and W.C. Fields), always knew machines that talked, believed that the frontier was closed, saw cities as sewers with omnipresent manure (and untrustworthy Roman Catholics), viewed typewriters as the new “literary pianos,” felt how traumatic Garfield’s assassination was to the country, believed North-South marriages might be slighly acceptable and, unlike their parents, did not find all darkened theaters to be morally unacceptable.  The class of 1898 knew the sweetest whistle in the world was the one that marked the end of the factory day.

There are 50 items in all in this list, with interesting text, but suffice to say that the world of the class of 1898 was remarkably and radically different from that of their parents.

How about the class of 1931, born in 1913?  This would include Richard Nixon and Rosa Parks.  These kids could always make telephone calls across the country, knew the Titanic only as history, played with erector sets, and understood people went to Detroit to make cars.  Their parents were attending a new thing called a “cocktail party” and jazz gave them a most colorful vocabulary.  

For the class of 1970, born in 1952, margarine has always looked just like butter, and many didn't believe they could trust anyone over 30.

The authors highlight ten classes, closing with the class of 2030, born in 2008.  For them,  daily mail is dead.  They have never seen a folded road map, a printed phonebook or a check.  Keys are found in museums.  They may never set foot on the campus of the college they attend.  And, in the cruelest swipe of all, the authors tell us the class of 2030 has never seen the Cubs win the World Series.

Good stuff.  A reminder that we’re not the only generations living with change.  A measure of how fast things are happening, and always have.  And news that even the most popular stars eventually fade.  Just ask Mary Bickford.   Heck, ask Johnny Carson.

For you, class of 2002, he’s here.

Tuesday, September 13, 2011

Sometimes It's Marketing, But Sometimes It's Just Plain Reality


It’s hard not to appreciate and occasionally even quote from Ted Levitt’s 1960 Marketing Myopia, in which he challenged leaders to define their businesses around the customer, not the product.  Levitt led his essay with a classic example of the railroad, saying:
The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because the need was filled by others (cars, trucks, airplanes, even telephones), but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry wrong was because they were railroad-oriented instead of transportation-oriented; they were product-oriented instead of customer-oriented.
I have long taken this critique of the railroad as a matter of faith.  Yet, even now as I write it, I wonder: the very industry that taught the rest of the world how to operate a successful big business apparently did not understand it had to compete with autos and planes for passenger traffic?

Could it be, as Levitt suggests, after decades of dominance that the railroad was suddenly asleep at the switch?

The other day I was thumbing through a couple of early-1950s editions of the Saturday Evening Post and was struck by what I saw.   Here, for example, was what Pullman was advertising:



Yes, it’s stereotypical to the point of being racist—welcome to the good old days.  But, what does the Executive Secretary of the National Association of Oil Equipment Jobbers say?  “Recently, I had to go to St. Louis for a meeting.  Instead of flying, as I had been doing for the past four years, I decided to take an overnight Pullman.  It happened to be raining when I left.  No matter. The train was exactly on time, and what’s more, I didn’t get drenched before boarding.”

Our Oil Equipment Jobber goes on to admire the big, comfortable seat, the ability to get work done, the privacy, the great night’s sleep, the wonderful breakfast, and the unwrinkled suit.

How could an ad be any better defined around the customer?  Pullman seemed intent on fighting for its share of passenger traffic.

(By the way, sorry the images are clipped.  I tried to define my home scanner as a “full-sized Saturday Evening Post color delivery solution” but, alas, it insists on being a simple home scanner.)

But that wasn’t all.  Next, the Southern Pacific, “America’s Most Modern Trains,” invited passengers to see the Pacific Coast while dining in a car fashioned after Timberline Lodge on Mt. Hood, viewing scenery through oversized windows and walking through feather-touch doors to their reserved Chair Car seats.



Are you confused?  Isn’t this the industry maligned for fifty years because it wanted to haul freight, not passengers?

Here’s another clue as to how competitive the railroad was: watch how it gets positioned in competitive ads.  In fact, there appeared to be a rock-em sock-em, three-way battle going on among the train, auto and plane industries for passengers.  The babies were booming and everyone wanted a piece.

Here’s a great example from a 1953 Post. The top panel of this ad is incredibly effective.  It shows a scene from 1911—the distant past—and a gleaming Pierce-Arrow.  Even then, the Ethyl Corporation suggests, the automobile was king.   In fact, that old plane has crashed, which undoubtedly played on a widespread public fear of 1950s airline travel.  And in the background?  That’s a train nearly consumed by its own smoke, a dirty, wretched beast of the Old World.


Today, of course (glance down!), there’s only the auto to consider, and “it isn’t unusual for a motorist to drive from New York to California in seven or eight days.” 

The airplane was no shrinking violet in this battle.  This 1950 ad shows motorists stuck in the snow while (top left) the American Airlines plane flies “above ground-level weather.”


And just to complete this wonderfully vicious advertising cycle, here United Air suggests that the poor old train is a topic of humor because “you can look down and laugh at icy roads, drifts of snow and long-delayed ground transportation.”



The truth is, the battle for passengers was fully engaged, with the railroad pitching as hard as the automobile and the airplane.  And, I no longer buy Professor Levitt’s assertion that the railroad defined itself poorly.

Sometimes, the limits are simply not in the definition but in the reality.  From Boston today I would take a car to Portland, Maine, a plane to San Francisco, and a train (if there is any way to avoid the airport) to New York City.  Each industry may define itself anyway it likes, but the reality is that there’s more definition being provided by schedules, body searches, cellphone access, weather, time and traffic than most anything Marketing can offer.

We might as well argue that the Rolodex would still command a huge market share if leaders has defined it as a networking solution.  The phonograph would be competitive with the iPod if marketeers had only thought of itself as an "entertainment delivery system."

Sometimes it's Marketing, but other times its just plain reality.  In any event, I’m done beating up the railroad.