NUTs & FUNKENSPRUNG

New Sectors and Regions Dominate Top 25 Companies

hkarner — Tue, 22 Dec 2009 12:19:49 +0000

A very interesting chart from the Wall Street Journal.

Wired: Facebook Loosens Privacy Controls, Sparks a Backlash

bhoetzl — Sat, 12 Dec 2009 10:13:37 +0000

Facebook simplified its privacy controls for 350 million users Wednesday. But some users and privacy advocates protest that important controls got lost in translation — including the right to keep one’s data from unscrupulous third-party developers.

Read the full article on Wired with updates and interesting comments from facebook.

10 Crucial Consumer Trends 2010

hkarner — Tue, 01 Dec 2009 17:34:51 +0000

From Reinier Evers (trendwatching.com)

1. BUSINESS AS UNUSUAL | Forget the recession: the societal changes that will dominate 2010 were set in motion way before we temporarily stared into the abyss. More »

2. URBANY | Urban culture is the culture. Extreme urbanization, in 2010, 2011, 2012 and far beyond will lead to more sophisticated and demanding consumers around the world. More »

3. REAL-TIME REVIEWS | Whatever it is you’re selling or launching in 2010, it will be reviewed ‘en masse’, live, 24/7. More »

4. (F)LUXURY | Closely tied to what constitutes status, which itself is becoming more fragmented, luxury will be whatever consumers want it to be over the next 12 months. More »

5. MASS MINGLING | Online lifestyles are fueling ‘real world’ meet-ups like there’s no tomorrow, shattering all predictions about a desk-bound, virtual, isolated future. More »

6. ECO-EASY | To really reach some meaningful sustainability goals in 2010, corporates and governments will have to forcefully make it ‘easy’ for consumers to be more green, by restricting the alternatives. More »

7. TRACKING & ALERTING | Tracking and alerting are the new search, and 2010 will see countless new INFOLUST services that will help consumers expand their web of control. More »

8. EMBEDDED GENEROSITY | Next year, generosity as a trend will adapt to the zeitgeist, leading to more pragmatic and collaborative donation services for consumers. More »

9. PROFILE MYNING | With hundreds of millions of consumers now nurturing some sort of online profile, 2010 will be a good year to help them make the most of it (financially), from intention-based models to digital afterlife services. More »

10. MATURIALISM | 2010 will be even more opinionated, risque, outspoken, if not ‘raw’ than 2009; you can thank the anything-goes online world for that. Will your brand be as daring? More »

Peter Drucker and Enterprise 2.0 | Drucker Centenary

hkarner — Mon, 30 Nov 2009 14:56:50 +0000

Blog1185: November 19, 2009; Posted by Greg Lloyd;

Earlier this week Oliver Marks wrote an excellent post on his Collaboration 2.0 Blog: ‘The Purpose of a Business is to Create a Customer’ – Peter Drucker Centenary. Oliver celebrates the Nov 19, 2009 Centenary of Peter Drucker’s birth with two of his favorite Drucker bumper sticker quotes: ” ‘Knowledge has to be improved, challenged, and increased constantly, or it vanishes‘ and ‘There is an enormous number of managers who have retired on the job‘, which somehow seem to fit together very well.” then uses these quotes as context to discuss the disturbing findings of the 2009 Shift Index report and followup analysis by John Hagel, John Seely Brown and Lang Davidson of the Deloitte Center for Edge Innovation. Please read Oliver’s full post – you’ll like it. Oliver was also used kind words to build on my earlier Enterprise 2.0 Schism post. Here’s a slightly extended version of the comment I posted in reply, along with my two favorite Drucker bumper sticker quotes and several links to celebrate Drucker’s birth and life.

Thank you for the kind words and for pointing out the HBR Drucker Centenary issue. My “Enterprise 2.0 Schism” post was fun to write – with tongue firmly in cheek – as you note. But it also expresses some serious beliefs.

For me the key Drucker quote is: “The purpose of an organization is to enable ordinary humans beings to do extraordinary things.”

The scale shift that ubiquitous Web tech enables as well as bottom up participation in E2.0 initiatives are both necessary – but neither are sufficient to distinguish “Enterprise 2.0″ from the Web we see and use every day outside work. I believe the difference lies in the shared purpose which drives people to create or join an enterprise and work together over time, along with the need to manage use of scarce resources to a shared end.

By definition an enterprise is a purposeful undertaking that generally requires many hands, expertise and capital that aren’t easy for a non-purposeful group to gain and apply over time. This make the “social ecology” of an enterprise different from other groups.

In saying “2.0 modifies how the Enterprise works, not the technology,” I take the rhetorical position that the technology which underlies E2.0 – specifically the ubiquitous Web as a platform – is a necessary enabler which provides the first chance to practically apply many of the principals of open work, distributed work and effective collaboration over time that Drucker and Engelbart have advocated for the past fifty years.

I believe that emergent phenomena which Prof Andrew McAfee includes as a core part of his definition of Enterprise 2.0 are significant and different in kind and structure from anything seen before in any enterprise – based on the speed, scale, simplicity and ubiquity of the technology combined with expectations and experience grounded in the public Web. Speculating on how management could embrace but not squash these phenomena to “create more customers” is a good Druckerian question.

But I also believe that the most likely path to large scale adoption and use of this enabling technology will come from small to mid size groups within an organization who intentionally use it to improve their own ability to get work done – rather than in direct pursuit of emergent benefits. They can (and by mandate should) open the direct and indirect record of their work to others who then may become better aware of what their enterprise plans to do, is doing or has done – and who knows what. I really like Jon Udell’s term for this principal: Observable Work.

I believe this bottom up and pragmatic adoption model parallels lessons learned from bottom up Knowledge Management versus the failure of top down KM, and lessons learned from the history of the simple, practical Web itself versus failed dreams of more sophisticated universal hypertextuality.

The benefits that are new in kind are emergent, but the path to broad adoption and acceptance will be based on mutual consent, compelling benefits to those who do the work, leadership, and experimentation in activities that have a clear business purpose – designing, building, selling, maintaining products, providing services to clients, customers and partners.

It’s presumptuous to guess what Peter Drucker would say about the relationship between the technology, techniques and phenomena we call Enterprise 2.0 and its potential to change the patterns of work and management of an enterprise.

But I believe it’s fair to ask: “What sort of hard questions might Peter Drucker ask?” David Rendall (of the UK’s National Health Service, Orkney) tossed a nice Druckerian question to Carmen Medina during the followup discussion to her Enterprise 2.0 and the Context of Work keynote at TUG 2009 last month:

#tug2009 Question for Carmen: how do those collaborative networks balance with clear lines of responsibility e.g. in healthcare? 10:06 AM Oct 14th from TweetDeck @davidrendall

For example, the decision on course of treatment for a particular patient is yes or no and may be life and death. You want many people to be able to contribute to that decision – including the patient – but ultimately someone has to accept responsibility for that outcome. In all enterprises decisions between mutually exclusive courses of action need to be made – up to and including “bet the company” decisions.

See the video (time 68:20) for David’s question. Then follow Carmen’s response and a fascinating discussion that includes FAA experience in understanding and mandating training on cockpit resource management to make air crews aware of how to communicate effectively in high stress situations. Planes have literally flown into mountains when a junior officer was not willing or able to alert a senior pilot to a critical issue while the senior pilot was dealing with the same or an unrelated emergency.

Drucker would hold management ultimately responsibility for the course of action and outcome. But how to make best use of the experience and judgement of a distributed, experienced and self-directed organization is not a simple question, particularly in a crisis such as the mortgage credit crisis (or South Sea Bubble) where madness rather than wisdom of crowds is part of the problem. In my opinion Drucker was often at his best when expressing and defending contrarian opinions that he considered morally right as well as intellectually correct. See Schumpeter Keynes which Drucker wrote on the Keynes Centenary.

Drucker makes the point that innovation in how an enterprise (profit or non-profit) works – how it provides motivation, support, leadership and resources to its members to “Create a Customer” – is as important as innovation in whatever else an enterprise delivers.

I hope we’ll see more good work (like John Hagel & John Seely Brown’s The Only Sustainable Edge) that focuses on E2.0 style business innovation based on Drucker’s understanding of what drives success.

PS – My second Peter Drucker bumper sticker quote for the day: “A manager’s task is to make the strengths of people effective and their weakness irrelevant–and that applies fully as much to the manager’s boss as it applies to the manager’s subordinates.”

Enterprise 2.0 Schism

hkarner — Mon, 30 Nov 2009 14:50:05 +0000

Blog1163: November 9, 2009; Posted by Greg Lloyd; 1 Attachment

I have to confess that I’ve enjoyed watching recent rounds of Enterprise 2.0 discussion and mud wrestling. The fact that so many people enjoy debating definitions, values, doctrinal principals – even the existence of Enterprise 2.0 – makes me think that E2.0 might best be framed as a religious debate. With that in mind, I’d like to introduce a new and exciting element: schism.

I hereby declare myself an Enterprise 2.0 Strict Druckerian. I believe that “2.0″ should be considered a modifier of Enterprise rather than an allusion to mere Web 2.0 technology – which is what an Enterprise 2.0 Strict Technarian would have you believe.

I further declare: No, it is not “all about the people” – which is what an Enterprise 2.0 Strict Proletarian would have you believe. Without the enabling technology of the Web, plus search engines and other affordances based on Sir Tim Berners-Lee’s innovation, the Strict Proletarian would find it difficult to fit the inhabitants of McAfee’s inner, middle and outer rings into the same room, get them to participate in the same conference call, or exhibit their “emergent” behaviors using typewriters, copy machines, faxes and email. Speed, scale and connection patterns matter and the technology that spans these barriers is neither trivial nor insignificant to the phenomena Strict Proletarians value.

I believe that although both technology and broad bottom-up participation are necessary to achieve the Drukerian vision, neither element alone is sufficient to achieve the noble end of re-engineering how ordinary people work together to achieve the ends of enterprises they choose to affiliate with.

As Peter Drucker said: “The purpose of an organization is to enable ordinary humans beings to do extraordinary things.” Management: Tasks, Responsibilities, Practices Chapter 28, The Spirit of Performance, p. 361 (1974)

I nominate Peter Drucker and Douglas Engelbart as Patron Saints of Enterprise 2.0 (Strict Druckerian). If you don’t know who either of these gentlemen are, I suggest you click their Wikipedia links for two pretty good short biographies.

Peter Drucker constantly advised businesses to give employees direct control over their own work and environment, with teams of “knowledge workers” responsible for work toward goals stated as broad business objectives rather than prescriptive plans. Drucker stated that management could only achieve sustainable profits by treating people as an enterprise’s most valued resources, not as costs. In later years he described his role as “social ecologist” rather than management consultant.

“Marketing alone does not make a business enterprise. In a static economy there are no business enterprises. There are not even businesspeople. The middleman of a static society is a broker who receives his compensation in the form of a fee, or a spectator who creates no value.

A business enterprise can exist only in an expanding economy, or at least in one that considers change both natural and acceptable. And business is the specific organ of growth, expansion and change.

The second function of a business is, therefore innovation – the provision of different economic satisfactions. It is not enough for the business to provide just any economic good and services; it must provide better and more economic ones. It is not necessary for a business to grow bigger; but it is necessary that it constantly grow better…

Above all innovation is not invention. It is a term of economics rather than technology. Non technological innovations – social or economic innovations – are at least as important as technological ones.

In the organization of a business enterprise, innovation can no more be considered a separate function than marketing. It is not confined to engineering or research, but extends across all parts of the business, all functions, all activities.” Peter Drucker, Management: Tasks, Responsibilities, Practices (1974)

At a 1934 Cambridge seminar by John Maynard Keynes, “I suddenly realized that Keynes and all the brilliant economic students in the room were interested in the behavior of commodities, while I was interested in the behavior of people.” Peter Drucker, The Ecological Vision, p. 75-76, (1993)

“A manager’s task is to make the strengths of people effective and their weakness irrelevant–and that applies fully as much to the manager’s boss as it applies to the manager’s subordinates.” Peter Drucker, Managing for the Future: The 1990’s and Beyond (1992)

In an equally distinguished career, Douglas Engelbart has been immensely influential in creating and inspiring the creation of technology we use today (far beyond his invention of the mouse), but Doug’s goals have always been expressed in terms of improving the abilities of groups to address complex, difficult and important problems:

“By ‘augmenting human intellect’ we mean increasing the capability of a man to approach a complex problem situation, to gain comprehension to suit his particular needs, and to derive solutions to problems. Increased capability in this respect is taken to mean a mixture of the following: more-rapid comprehension, better comprehension, the possibility of gaining a useful degree of comprehension in a situation that previously was too complex, speedier solutions, better solutions, and the possibility of finding solutions to problems that before seemed insoluble. And by ‘complex situations’ we include the professional problems of diplomats, executives, social scientists, life scientists, physical scientists, attorneys, designers–whether the problem situation exists for twenty minutes or twenty years. We do not speak of isolated clever tricks that help in particular situations. We refer to a way of life in an integrated domain where hunches, cut-and-try, intangibles, and the human ‘feel for a situation’ usefully co-exist with powerful concepts, streamlined terminology and notation, sophisticated methods, and high-powered electronic aids.” Douglas Engelbart Augmenting Human Intellect: A Conceptual Framework, Introduction, (1962)

On the term “social software”, I believe it’s fair to blame it on Clay Shirky – who had the misfortune to introduce a term that’s perfectly respectable for a sociologist who studies how technology influences group behavior:

“It’s software that supports group interaction. I also want to emphasize, although that’s a fairly simple definition, how radical that pattern is. The Internet supports lots of communications patterns, principally point-to-point and two-way, one-to-many outbound, and many-to-many two-way.” − Clay Shirky, A Group Is Its Own Worst Enemy O’Reilly Conference (April 2003)

If the term “social” must be deprecated, I hope its banishment takes with it all Social X marketing buzzwords, job titles, twitter tags, and the well-earned disco ball reputations of the so-called Social Media gurus.

On “Return on investment” debates, I believe that Taylorist time-and-motion studies would show gains that typically exceed the modest costs of introducing and using Enterprise 2.0 software, but studies for knowledge work where the value is not transactional (time to process a purchase order) are difficult to design and far too easy to fudge. Large scale experimental studies based on overall business success are even more problematic – except in hindsight.

“A very important surgeon delivered a talk on the large number of successful procedures for vascular reconstruction. At the end of the lecture, a young student at the back of the room timidly asked, ‘Do you have any controls?’ The great man hit the podium and said, ‘Do you mean, “Did I not operate on half the patients?”‘ … The hall grew very quiet and the voice at the back of the room very hesitantly replied, ‘Yes, that’s what I had in mind.’ The surgeon’s fist really came down as he thundered, ‘Of course not, that would have doomed half of them to their death!’…The room was then quiet, and one could scarcely hear the small voice ask, ‘Which half?’” – Dr. E. E. Peacock, Jr., University of Arizona College of Medicine; quoted in Medical World News, p. 45 (September 1, 1972) quoted by Edward Tufte in Beautiful Evidence (2006)

I believe the value of Enterprise 2.0 techniques comes from small to mid size groups within an organization who intentionally (not emergently) improve their own ability to get work done, while opening the direct and indirect record of their work to others who then may become better aware of what their enterprise plans to do, is doing or has done – and who knows what.

Finally – having demonstrated the unerring truth of the Strict Druckerian position regarding the nature of Enterprise 2.0, I declare both the Strict Technarian and Strict Proletarian interpretations to be false, heretical, and anathema. Living in our tolerant and civilized times, I found it difficult to imagine an appropriate way to separate those who obstinately cling to these heretical beliefs, until I ran across this nugget:

Nike does “email archeology” to decompose email thread to expose one part of a specific collaboration. :>) #e2conf @lehawselive (4:20pm Nov 4, 2009)

So if you don’t agree with me, I hope you spend the the rest of your corporate life decomposing email threads from your corporate archive into Google Waves or Traction TeamPage comments where others can benefit from your labor if not from your ideas.

See Enterprise 2.0: What a Crock – Dennis Howlett Aug 26, 2009

Denial is a river full of crocks – Gil Yehuda August 31, 2009

Enterprise 2.0 is a Crock: Discuss – Andrew McAfee Sep 2, 2009

[ And so much more. It's the Web - you could look it up - or follow the fun on Twitter ]

Schumpeter and Keynes, Peter Drucker, Forbes magazine (cover story) May 23, 1983 – This is great!

This was far to much fun to write. I hope I haven’t needlessly offended anyone, but I’m also happy to defend the essence of the Druckerian position in more serious terms; Enterprise 2.0 is a big tent and I hope it stays that way.

I also value the term Enterprise 2.0 for a reason over and above the Druckerian fantasy. Unlike terms invented to express a desire to sell software to managers (X Management – you do want to manage X don’t you?), Enterprise 2.0 expresses a simple, grounded wish:

“I wish the software I used every day at work allowed me to find what I want; discover what I need to know – along with surprises; and connect with people I don’t even know to get my job done, learn more, and work in an enjoyable place.” or much more narrowly: “Why can I find what I need with Google on the Web, but have to pull teeth to find anything useful when I go to work?”

This is a grounded wish since everyone in business has a direct basis for comparison – what they or their children see, use and enjoy on the public Web every day. This doesn’t mean that expectations, behavior, and (uh sociology) of the public Web and the internal/external web of connections used in an enterprise are the same – but they are comparable with respect to desired experience.

To the extent that corporate barriers dash expectations, read Peter Drucker on how to get rid of those barriers or find a better employer.

To the extent that enterprise technology differs with respect to needs for privacy, finding information in a link-deprived environment and sharing access to confidential sources or legacy applications, Enterprise 2.0 offers the opportunity for vendors and community projects to create products that respond to that simple, grounded wish and measure the difference.

I’m not sure where Professor Andrew McAfee sees himself in this ecclesiastical model. I’d be happy to support his claim to any sub-numinous position

Enterprise 2.0 is Not THAT Big a Deal

hkarner — Mon, 30 Nov 2009 14:40:21 +0000

Freitag, 20. November 2009, 18:05:43 | amcafee

I’ve been thinking about what to write in the wake of the recent Enterprise 2.0 conference. One more summary seems unnecessary, since there have been so many good ones already. And the debates are starting to feel a little trumped up and warmed over, and so less fun to wade back into. And then I got inspiration from Greg Lloyd, President and co-founder of Traction Software and longtime technologist. In addition to running his company Greg finds time to write a great blog, and his post after the conference was called “Enterprise 2.0 Schism.” In it, he likens the current E2.0 controversies to a religious schism, and divides the community into three sects: Strict Proletarians, who believe it’s all about the people, Strict Technarians, who believe it’s all about the technologies, and Strict Druckerians, who “believe that “2.0″ should be considered a modifier of Enterprise rather than an allusion to mere Web 2.0 technology…”

Lloyd writes with a light touch and is clearly being a bit tongue in cheek, but he’s also making a smart and serious point. Two of them, in fact. The first is that advocates of Enterprise 2.0 really do believe different things about the phenomenon, and these differences matter. His second point is an argument for the Druckerian point of view: that the use of emergent social software platforms (ESSPs) is going to change organizations so much that a new version number is warranted. This got me thinking about what I believed. I’ve been using “Enterprise 2.0” in Lloyd’s Technarian sense — as a reference to the adoption of Web 2.0 technologies and approaches by enterprises. And do I also believe that such adoption is going to change companies? Sure – virtually all technology adoptions do, to some extent. Do I believe that it’s going to change them enough to require a new version number? Nope. I just think that’s too strong a claim. Let me try to explain why. I yield to almost no one in my belief about the power and utility of ESSPs, but I just don’t think they’re going to transform the structure or purpose of the enterprise. As I wrote earlier, I don’t see E2.0’s tools, approaches, and philosophies making obsolete managers, hierarchies, org charts, and formal cross functional business processes. It’s a rainy fall day in Boston, and after a wet walk into work I’m sitting here realizing that I need new boots. So maybe later today I’ll call up L.L. Bean and order a pair of Maine Hunting Shoes (Suave? No. Dry? Yes.). I’ll talk to a customer service rep who will enter my order into an enterprise system. This system spans the call center, the warehouse, the credit card company and, in all likelihood, the marketing department. The people working in each of these areas have relatively stable job titles and descriptions that are tied to pay and benefits. And they all have bosses who manage and develop people, put together plans and budgets, and take responsibility for performance and improvement. None of this is going to be swept away or rendered obsolete by the advent of ESSPs, even after they’re fully deployed and embraced. We can tell stories about how the new tools enable amorphous / gestalt / collectivist forms of organization that have no set structures and make their way through the environment much like slime molds do, but these stories are pure speculation, grounded in hope rather than reality or experience. They’re a type of cyberpunk science fiction (as an aside, I find it really interesting and telling that the best cyberpunk, like Neuromancer and Snow Crash, conjures up worlds where big formal organizations are more dominant, not less.). I want to be clear: Lloyd’s post is fantastic: grounded and very thoughtful. He’s not in the enterprise-as-slime-mold camp. And I definitely agree with him that Enterprise 2.0 is a big deal. So what’s the right way to describe its impact? Here’s my take: ESSPs will have about as big an impact on the informal processes of the organization as large-scale commercial enterprise systems (ERP, CRM, Supply Chain, etc.) have had on the formal processes. This is not a conservative statement. Enterprise systems have been a huge deal for organizations. They’ve turned reengineering from a whiteboard exercise into an unignorable reality for many, many companies. And Drucker was right when he said that “Reengineering is new, and it has to be done.” It’s not a coincidence that productivity in the US really accelerated starting in the mid 1990s, just as enterprise systems started spreading, and accelerated most in the industries that spent the most on IT. And a great study by Erik Brynjolfsson, DJ Wu, and Sinan Aral which I wrote about here, found strong evidence that ERP adoption leads to performance improvement. I believe that Enterprise 2.0 will be as big a deal for corporate performance and productivity. I believe this because I believe that the informal organization is as important as the formal one for getting work done (do you agree?) and that we have historically had lousy technologies for supporting the work of the informal organization (especially outside our immediate circle of strong ties). With the arrival of ESSPs, the tools available to the informal / emergent organization have gone from lousy to excellent, just like commercial enterprise systems advanced the formal organization’s toolkit from lousy to excellent. So while I don’t think that the impact of ESSP’s is profound enough to warrant a new version number for the enterprise, I do think that we’re on the brink of a sustained period of corporate innovation, improvement, and productivity growth enabled by these new tools. I take some comfort from the fact that some very sharp and experienced corporate leaders like Cisco’s John Chambers seem to feel the same. Do you? In your opinion, what’s the right way to think about the broad impact of ESSPs? Will they lead to Enterprise, version 2.0, or just to Enterprise 2.0? Leave a comment, please, and let us know.

What They Really Believe

hkarner — Thu, 19 Nov 2009 11:43:21 +0000

Date: 18-11-2009
Source: THOMAS L. FRIEDMAN

If you follow the debate around the energy/climate bills working through Congress you will notice that the drill-baby-drill opponents of this legislation are now making two claims. One is that the globe has been cooling lately, not warming, and the other is that America simply can’t afford any kind of cap-and-trade/carbon tax.

But here is what they also surely believe, but are not saying: They believe the world is going to face a mass plague, like the Black Death, that will wipe out 2.5 billion people sometime between now and 2050. They believe it is much better for America that the world be dependent on oil for energy — a commodity largely controlled by countries that hate us and can only go up in price as demand increases — rather than on clean power technologies that are controlled by us and only go down in price as demand increases. And, finally, they believe that people in the developing world are very happy being poor — just give them a little running water and electricity and they’ll be fine. They’ll never want to live like us.

Yes, the opponents of any tax on carbon to stimulate alternatives to oil must believe all these things because that is the only way their arguments make any sense. Let me explain why by first explaining how I look at this issue.

I am a clean-energy hawk. Green for me is not just about recycling garbage but about renewing America. That is why I have been saying “green is the new red, white and blue.”

My argument is simple: I think climate change is real. You don’t? That’s your business. But there are two other huge trends barreling down on us with energy implications that you simply can’t deny. And the way to renew America is for us to take the lead and invent the technologies to address these problems.

The first is that the world is getting crowded. According to the 2006 U.N. population report, “The world population will likely increase by 2.5 billion … passing from the current 6.7 billion to 9.2 billion in 2050. This increase is equivalent to the total size of the world population in 1950, and it will be absorbed mostly by the less developed regions, whose population is projected to rise from 5.4 billion in 2007 to 7.9 billion in 2050.”

The energy, climate, water and pollution implications of adding another 2.5 billion mouths to feed, clothe, house and transport will be staggering. And this is coming, unless, as the deniers apparently believe, a global pandemic or a mass outbreak of abstinence will freeze world population — forever.

Now, add one more thing. The world keeps getting flatter — more and more people can now see how we live, aspire to our lifestyle and even take our jobs so they can live how we live. So not only are we adding 2.5 billion people by 2050, but many more will live like “Americans” — with American-size homes, American-size cars, eating American-size Big Macs.

“What happens when developing nations with soaring vehicle populations get tens of millions of petroleum-powered cars at the same time as the global economy recovers and there’s no large global oil supply overhang?” asks Felix Kramer, the electric car expert who advocates electrifying the U.S. auto fleet and increasingly powering it with renewable energy sources. What happens, of course, is that the price of oil goes through the roof — unless we develop alternatives. The petro-dictators in Iran, Venezuela and Russia hope we don’t. They would only get richer.

So either the opponents of a serious energy/climate bill with a price on carbon don’t care about our being addicted to oil and dependent on petro-dictators forever or they really believe that we will not be adding 2.5 billion more people who want to live like us, so the price of oil won’t go up very far and, therefore, we shouldn’t raise taxes to stimulate clean, renewable alternatives and energy efficiency.

Green hawks believe otherwise. We believe that in a world getting warmer and more crowded with more “Americans,” the next great global industry is going to be E.T., or energy technology based on clean power and energy efficiency. It has to be. And we believe that the country that invents and deploys the most E.T. will enjoy the most economic security, energy security, national security, innovative companies and global respect. And we believe that country must be America. If not, our children will never enjoy the standard of living we did. And we believe the best way to launch E.T. is to set a fixed, long-term price on carbon — combine it with the Obama team’s impressive stimulus for green-tech — and then let the free market and innovation do the rest.

So, as I said, you don’t believe in global warming? You’re wrong, but I’ll let you enjoy it until your beach house gets washed away. But if you also don’t believe the world is getting more crowded with more aspiring Americans — and that ignoring that will play to the strength of our worst enemies, while responding to it with clean energy will play to the strength of our best technologies — then you’re willfully blind, and you’re hurting America’s future to boot.

Need work? Trying making your own.

hkarner — Sun, 15 Nov 2009 16:05:43 +0000

Listen to the story

How do you find a job in today’s economy when most companies aren’t hiring and few jobs are being created? Commentator Charles Handy says the thing to do is make your own work.

London Business School founder and Claremont Graduate University’s Drucker School of Business Professor, Charles Handy. (Liz Handy)

TEXT OF COMMENTARY

KAI RYSSDAL: Maybe the toughest part of today’s unemployment number to wrap your brain around is that there aren’t a whole lot of places that 10 percent of the work force not working can go. Companies aren’t really hiring, not many new jobs are being created.

Commentator Charles Handy says the thing to do is make your own work.

Charles Handy: Let’s be realistic — jobs are going to be in short supply for the next few years. Of course, it does depend on what you mean by a job.

The other day, I was having lunch with an advertising executive. He was bemoaning the fact that he had lost his job while still at the height of his powers, as he saw it. Just at that moment, the electrician who was working in his house put his head around the door. “I won’t be back for a couple of days,” he said. “I’ve got another job to fit in.” In his world, a job meant a client; in my friend’s world, it meant an employer.

There’s no obvious limit to the number of electrician-type jobs that can exist. Or plumbers. Or accountants. The world is full of potential clients — for something. The problem is that you have to create the something yourself, and most of us are not born entrepreneurs. Particularly if we have grown up and even grown old in institutions, moving from school to college to organization, places where work was shoved at you, yours only to pick up your shovel or pen and deal with it.

It’s best to practice it young if you can. I said to my kids, “When you leave college don’t get a job at first. Find someone who will pay you money for something you make or do for them. It will be good practice for life later on.” But it’s never too late to start, and more of us will have to, one day, now that life is longer and organizations much slimmer.

I did it. I became fed up with organizations — grew out of them really — and went on my own when I was 49. Cold-calling potential clients, learning to live a cash-flow life after a salaried one. It was hard at first. But I learnt to love the freedom, and the joy of working with people rather than for people. Besides, if you are your own boss, it’s up to you how hard you work, or where, or when, or why.

Ryssdal: Management consultant Charles Handy is a founder of the London Business School. His most recent book is called “Myself, and Other More Important Matters.”

The US Is GM

hkarner — Thu, 12 Nov 2009 10:40:38 +0000

Tom Davenport’s Blog: November 2, 2009

The United States, my beloved home country, has become the General Motors of nations in its lethargy and complacency. This is ironic, because the US (and Canada) own a majority share of GM, but I am focused more on economic similarity rather than ownership. The height of complacency for GM was probably about 2004. In that year the automaker still had the title as the world’s largest maker of cars, a title it relinquished in 2007. GM was still profitable in 2004 — but not very much so — and it was losing market share in many of its major markets. That was the year that GM abandoned the Oldsmobile brand, but it didn’t seem worried about its future overall. (Announcing the decision to phase out Olds, GM stated in a press release issued in late 2000 that the move would “accelerate GM’s effort to focus resources on strengthening its market position and growth opportunities” and “further streamlines GM’s product portfolio, focusing engineering and marketing resources more sharply on the company’s most successful products and brands. It will also facilitate the development of more innovative products with shorter life cycles.”) Optimism is great, but obviously that didn’t work out terribly well; by 2009 GM was in bankruptcy and is about to shed a lot more brands. It’s now a shadow of its former self, but in 2004 its managers didn’t seem to grasp that the company had a serious problem. Compare GM’s situation to that of the United States, where the complacency peak was probably about 2007. In that year my country continued its long, slow economic and social decline; it ranked 13th (down from 12th the year before), for example, in the United Nations Development Program Human Development Index, which combines GDP per capita, education, and life expectancy (Norway, Australia, and Iceland held the top 3 positions. Yet the then-CEO of the US, George W. Bush, was sanguine about the economy in the 2007 State of the Union address: A future of hope and opportunity begins with a growing economy, and that is what we have. We are now in the 41st month of uninterrupted job growth, a recovery that has created 7.2 million new jobs so far. Unemployment is low, inflation is low, wages are rising. This economy is on the move. And our job is to keep it that way — not with more government but with more enterprise. Apparently the near future of the US economy wasn’t quite as bright as Bush suggested. Both GM and the US government seemed unable to grasp the extent of their problems and failed to do much about them. Both had insufficient innovation, overly high health-care costs, undereducated populations, unwillingness to face environmental issues, and an inability to make tough decisions and take tough actions. And why should they make the hard calls, when it was all too common to hear within both institutions that they are the greatest of their kind in the world? Are there bright spots in both organizations? Absolutely. But touting them, as opposed to calling attention to problems, only leads to further apathy and decline. I believe that it’s diligent and serious self-criticism that identifies the need to change and drives action. Compare the attitudes of the U.S. in 2007 and GM in 2004 to that of Akio Toyoda, the new CEO of Toyota (and a graduate of my school, Babson). Instead of patting the company on the back, Toyoda addressed its recent problems with sharp, pointed criticism, according to a New York Times account of his remarks at the Japan National Press Club: Mr. Toyoda said his company was shamefully unprepared for the global economic crisis that has devastated the auto industry, and is a step away from “capitulation to irrelevance or death.” The company, he added, is “grasping for salvation.” Even adjusting for the usual Japanese tendency to self-criticize, this is an amazing statement. It suggests that Toyota and Toyoda aren’t remotely content with business as usual and plan to face the company’s problems. It may exaggerate a bit, but isn’t it more constructive to exaggerate problems than to exaggerate success? As many have noted, Toyoda borrowed the language for his company’s situation from Jim Collins’ book How the Mighty Fall. One might suggest that Collins’s framework for economic decline applies to countries as well as companies, although that wasn’t his focus in the book. So where is the U.S. in his five-stage model? We have clearly exhibited Stage 3, “denial of risk and peril,” for many years. I don’t think that Toyota is truly at Stage 4, “grasping for salvation,” but the U.S. probably is. And we aren’t that far from “capitulation to irrelevance or death,” Collins’s fifth and final stage. Barack Obama hasn’t sounded the alarm quite to the degree that Akio Toyoda did, but he clearly knew we were in big trouble well before the latest economic crisis. His administration is trying to work along multiple fronts — health care, the enormously costly wars in Iraq and Afghanistan, climate change, education, financial mismanagement, and many others — to address the sad state we’re in. He may not succeed, but I give him substantial credit for trying. It’s typical of our situation that his strongest detractors allege that he’s taking on too much and having government play too large a role. If we’re verging on “capitulation to irrelevance and death,” the implication is that, if anything, he’s moving us too slowly. I love my country, but right now the kind of love it needs most is tough love.

Entrepreneurs: The Real “Peace Prize” Winners

hkarner — Wed, 04 Nov 2009 16:49:29 +0000

Mises Daily: Monday, November 02, 2009 by Chris Brown

We live in ludicrous times of rewarding good appearance for evil action. President Obama is awarded the Nobel Peace Prize while his war efforts intensify. But those who are true promoters of peace need attention, for they will never likely receive such ostentatious recognition for their noble efforts. Such individuals are those who take risks in a world of uncertainty, and who save or borrow capital to start a business. Such entrepreneurs promote peace by serving the customer better than the next entrepreneur through voluntary transactions in the market, rather than commanding bureaucracy in government.

As part of my entrepreneurship courses, I have students who want to start their own business listen to new entrepreneurs discuss their background, their reasons for starting the business, and of their effort to establish the business. Students usually find these speakers fascinating and inspiring, but also come away with a sense of the enormous amount of effort, capital, risk, and uncertainty that is involved in starting a business. Many of these students decide they no longer want to start their own business. They realize that entrepreneurs, too, have a boss: the customer. Mises put it this way: “Ownership of the means of production is not a privilege, but a social liability.”

One speaker, a recent founder of a small Mexican restaurant (which are not common in Australia), saved his money over 20 years and then took out a bank loan of AU$1 million dollars, with his house and car as collateral. It took him over a year to write a business plan, find a suitable location, develop a menu, hire employees, and create marketing materials before he could open to the public.

Some of this time was wasted dealing with local-council–government officials, to whom he had to pay AU$25,000 just to open his restaurant. Delays in approval by government bureaucrats meant paying rent of AU$7,000 a month for several months on an empty restaurant. This entrepreneur said dealing with local government was the most difficult and discouraging battle he had to face. (Getting credit from banks, he said, was not a problem.)

This entrepreneur still works seven days a week, from morning until evening, to get the business established. After six months, and still not at a break-even point, he realized his business is only as good as the next day’s sales. As Mises said, “There is no security and no such thing as a right to preserve any position acquired in the past.” (Human Action, p. 311)

He knows he has to continually innovate through better quality products and services, better management of operations and resources, and more accurate pricing. He also realizes his competitors next door are trying to do the same.

Students inevitably ask him if he would do it again, knowing how difficult it is to establish a business, and after having some of the myths surrounding entrepreneurship contradicted by the founder’s experience. “Definitely,” he confidently responds, “… if you see the risk perhaps you shouldn’t start the business. I was so passionate about Mexican food I saw an opportunity.” This founder is passionate about serving customers Mexican food — an action so simple, so peaceful, and so far removed from force and war.

Such efforts, in my opinion, are not merely bordering on heroic, but are no doubt worthy of a peace prize. I cannot help but point out how absurd it is — in contrast to the voluntary, coordinating, and peaceful actions of entrepreneurs — for virtually any political bureaucrat to receive an award that has anything to do with peace. It is the seemingly small efforts of millions of hardworking, passionate entrepreneurs who make it difficult to understand why a peace prize still goes to someone who lives off the fruits of entrepreneurs’ efforts. Not only does President Obama depend on the force of taxes for his position, but he also decides how much and what to spend on with others’ money. Government merely consumes the efforts and capital of individuals. To award a political bureaucrat for this is to add insult to injury.

President Obama is not only engaged in foreign wars with some nations; he is engaged in economic wars with nearly every nation, including his own, through trade barriers and inflation, which often lead to actual war. Ludwig von Mises provided great insight on this issue. Mises realized the link between foreign trade wars and foreign wars. When countries are trading freely and frequently there is less need to protect them with soldiers and go to war over resources. When entrepreneurs are allowed to engage in production and exchange, the economic incentives to initiate war and conquest are minimized. Mises put this idea succinctly when he wrote: “War is the alternative to freedom of foreign investment as realized by the international capital market.” (Human Action, p. 502)

Murray Rothbard also recognized the likely outcomes of political intervention versus the market process:

It would be almost inevitable for such an autistic world [exchange involving coercion without receiving anything in return] to be strongly marked by violence and perpetual war. Since each man could gain from his fellows only at their expense, violence would be prevalent, and it seems highly likely that feelings of mutual hostility would be dominant. (Man, Economy, and State, p. 101)

Contrast this with the individual sovereignty found in the marketplace. Entrepreneurs only reap profits by offering something that individuals will buy voluntarily. They obviously cannot force anyone to buy their product. If they knew ex ante that their product had guaranteed demand, there would be little risk. And if entrepreneurs do not satisfy the consumer, they take a loss. Sustained losses (without government support) lead to the entrepreneur shutting down unprofitable operations. Government, paradoxically, rewards its losses with more funding and more labor.

$50 $40

In contrast, about the likely social outcomes of the market process Rothbard wrote,

On the other hand, in a world of voluntary social cooperation through mutually beneficial exchanges, where one man’s gain is another man’s gain, it is obvious that great scope is provided for the development of social sympathy and human friendships. It is the peaceful, cooperative society that creates favorable conditions for feelings of friendship among men. (Man, Economy, and State, p. 101)

The more entrepreneurs can engage in peaceful and coordinating actions that try to satisfy demands of consumers, the less likely war is made. Surely, noble entrepreneurs who contribute to the peaceful and voluntary exchange of property as part of the coordinating market process are worthy of peace awards. Political bureaucrats, who act as parasites on the rewards of such entrepreneurs, should be disqualified by their very nature.