Macrowikinomics Book Review

Posted on November 25, 2010. Filed under: Professional | Tags: , , , , , , , |

Cover of the book, "Macrowikinomics"

Macrowikinomics by Anthony Williams and Don Tapscott

I was drawn to this book mostly through having met one of the authors, Don Tapscott. At a conference a few years ago, he spoke about his first book, Wikinomics. The idea of social media (or Web 2.0) was a brand concept for me at the time.

Macrowikinomics is a big book (432 pages) and the writing is thorough in its treatment of both the underlying wiki principles and examples of how these ideas are applied in the real world. It reads as much like an encyclopedia as a novel, meaning, one could read the first few chapters to get an idea of the general principles and then pick whatever specific subject he or she is familiar in order to hear Macrowikinomics applied to that particular topic.

Five Principles

Don Tapscott and co-author Anthony Williams suggest Wikinomics derives from five general principles: openness, collaboration, integrity, interdependence and sharing.

Openness

If social media has taught us anything, it’s that life takes unpredictable turns at most every opportunity. To close one’s self to the unexpected is to limit our options and relegate ourselves to sub-optimal outcomes. Openness represents the need to remain flexible for considering avenues of exploration and previously unavailable solutions.

Collaboration

As the lead for innovation training at a large multi-national corporation, I learned innovation is as much about collaborating creatively when solving problems as anything else. This principle embraces the concept of diversity in experience and viewpoint, accepts these unique views as valuable input and urges us to pursue goals that acknowledge the needs and requirements of more players not less.

Integrity

When open to new ideas and seeking diverse viewpoints through collaboration, it is very easy to lose one’s way. Integrity is essential in remembering what is most important and working toward those ends constantly, especially in the face of adversity.

Interdependence

“No man is an island.” (John Donne, 1572-1631) This trueism has never been more true than it is today. In the grand web of life, we are all connected and all impacted by the actions of others. Tapscott and Williams see optimism in the concept of interdependence and see this as a potential pathway for a more loving and accepting world (my words, not the authors’.)

Sharing

A friend recently introduced me to the concept of network externalities. A fancy sounding phrase with a straight forward meaning. The more something is shared, the more valuable it becomes. The classic example is the telephone. When the first one was invented, it had very limited value since there was nobody to call! With the addition of each new phone, however, the value of the entire system expanded. To share our knowledge, ideas and indeed our successes benefit us all.

General Observations

Embedded within these five themes are others that often get more press, so it is worth mentioning them briefly. The internet is a transformative presence in modern life. We are witnessing not only the demand for more transparency in everything from government to corporate governance, but the tools for making this a possibility are becoming more powerful and accessible every day. Imagine, ever more representative government courtesy of your smart phone!

“With great power comes great responsibility” (credit to either Ben Parker, father of Spider-Man, i.e., Stan Lee or maybe more accurately, Socrates.) Participation is the foundation of a collective system, like democracy. With the power of the internet and the interactivity of Web 2.0 and beyond, expect to see greater participation in the future.

Collective action, or the wisdom of the crowd, has been collecting more validation through data in recent years. Studies show in certain circumstances — such as guessing the number of jelly beans in a jar — the average guess of a sufficiently large number of people is highly likely to be accurate.

Finally, although not specifically called out as important concepts of Wikinomics, sustainability, distributed effort/perspective/storage, networks, and self-organization appear in different shapes and forms throughout the book.

Applications

Once the principles are laid out for Macrowikinomics, the authors turn their attention to numerous examples of the concepts in action. There are case studies for climate change, energy, health and sick care, solving business problems, transportation, media (digital: news, music, movies) and open source intellectual property.

Should you read this book?

Yes, if you think “big,” enjoy seeing large patterns or have reason to understand the context of large scale social change. This book will make you think.

No, if you become easily distracted, if nuance is lost on you or if you are so busy getting things done that you don’t have time for contemplative thinking.

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Book Review: The Big Short

Posted on April 29, 2010. Filed under: Professional | Tags: , , , , |

photo of book coverThe ponzi scheme that became the financial meltdown of 2008 and almost led to a second Great Depression is thoroughly and lucidly described in The Big Short by Michael Lewis. The author carefully and systematically retells the story of how greed led to stupidity and the eventual bursting of the largest financial bubble in history.

Lewis sums up the storyline clearly in his description the difference between a gamble and an investment. “Investing” he says, “is like gambling when the odds are in your favor.”

We are all familiar with the adage about gambling in a casino, the games are designed to favor the house. Whether or not the gambler is conscious of these asymmetrical odds, he is more likely to lose than win every time he pulls a lever or rolls the dice. Even winning streaks  eventually turn; it is only a matter of time. Keep the gambler in the casino long enough and the odds turn back to favor the house.

In The Big Short, we already know how the ending before it starts… but Lewis retells the story with an insider-like perspective that kept my interest throughout. Along the way, I gained insight (notice, I didn’t say I understood) about some very esoteric bond industry terms like CDO (collateralized debt obligation, at the root of the collapse and were essentially the ticking timebomb), CDS (credit default swaps, the gamble on which the “short” players bet against the established financial industry), sub-prime bonds and mortgage backed securities (the building blocks of CDOs.)

Many of the players are familiar: Morgan Stanley, Goldman Sachs, JP Morgan, Citi Group, Bank of America, Washington Mutual and others. Those that were previously unfamiliar were the genius in the big short: Frontpoint Capital, a division of Morgan Stanley (Steve Esiman, Vinny Daniel, Danny Moses), Cornwall Capital (Charlie Ledley, Jamie May, Ben Hockett) and Scion Capital (Dr. Michael Burry). And other became familiar for their contribution to the underlying story: Howie Hubler who was responsible for Morgan Stanley’s biggest loss ever of $9B, Greg Lipman who put Deutsche Bank in the middle of the game and of course the government players Hank Paulson, Timothy Geithner and Ben Bernanke who seemed to be asleep when it mattered.

In a speech to Harvard Law School, Charlie Munger (Warren Buffet’s less famous business partner) spoke of the Lollapalooza Effect. In it, Munger suggests incentives are often at the root of much ignorance. In other words, if a system is setup to reward certain behavior — even if that behavior is not in the best interest of the system — that’s how people behave. Therein lies, according to Lewis’ The Big Short, the root of the Great Recession of 2008-2010.

Lewis walks us step-by-step through the recent past (it had all become a blur for me in 2008 and 2009.)

  1. Bear Sterns fails first and is bought by JP Morgan with government guarantees.
  2. Freddie Mac and Fannie Mae follow and are essentially nationalized.
  3. Lehman Brothers goes bankrupt.
  4. AIG fails and receives a total of $180B by the Federal Reserve.
  5. Washington Mutual is seized by the government and sold to Chase.
  6. Wachovia is purchased by Citi Group.
  7. Enter the Troubled Asset Relief Program (TARP) and a trillion dollar give away…

The closing pages of the book discuss where the key players are now and draws parallels to the savings and loan debacle of the 1980’s. Lewis actually claims the decision by John Goodfriend, then CEO of Solomon Brothers to go public (they sold shares of the company to the public where they had been a partnership previously), was the mustard see that grew into the recent crisis.

Overall, the book kept me hooked from the start — surely that is not because my career was just as disrupted as anyone else’s in this story?

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Book Review: Good to Great

Posted on February 28, 2010. Filed under: Professional | Tags: , , |

Good to Great book coverGood to Great, by Jim Collins has been on the book shelves for a long time. It was originally published in 2001 and updated in 2005. The title was somewhat off-putting for me. I figured there is so much literature these days about “greatness” and so much lip service paid to “excellence” — much of it is meaningless. I expected Good to Great to be more of the same. But, it is not. After reading Collin’s more recent book, How the Mighty Fall, I was impressed with him as a writer and thought I’d give his other books a second glance.

What makes this book different from other popular business books is data. Collins assembled an enormous group of helpers to dig into data about great companies over a multi-year project. His group looked at 30 years of data for hundreds of US-based companies to find 11 that have gone from good to great. The bar was set very high for inclusion, companies have:

  1. operated at a level better than the market for 15 years (good performance);
  2. experienced some kind of breakthrough to become great (better return than 3x the market); and
  3. sustained that level of performance for at least 15 years.

Other companies that had come close were retained for comparison purposes only. The outcome is a very thoughtful and pragmatically meaningful body of work. The essence of the book falls back to discipline — with equal focus on getting the right people on the bus (people), handling business like a hedgehog (thinking) and making a consistent and sustained effort, regardless of who is in charge, to turn the money-making flywheel of the business (action).

Disciplined People

In good to great companies, “who always comes before what.” Collins introduces the concept of Level 5 Leadership to describe the type of leaders his study found leading the way toward greatness. He describes his personal reluctance for including the topic of leadership in the study — and it sounds much like my own reluctance to read his book! But the data was clear, those leaders who have charisma and strong will and lead through the sheer force of their personality (think Lee Iacocca) are level 4 leaders. The difference between the fourth and fifth levels of leadership, Collins finds, is the presence of humility in place of ego. Level 5 leaders routinely give credit to others, keep blame to themselves and foster growth and continuity in the people they choose to lead the company. As a result, the success of great companies extends beyond the leaders that get them there. The culture of discipline inspired by Level 5 leaders lives on after the leaders are gone.

Disciplined Thinking

The hedgehog, as Collins explains, does pretty much one thing only; but it does it very, very well. A hedgehog is not very glamorous, when danger comes along it balls up, sticks out its sharp spines and stays put until the danger goes away. As a result, the hedgehog may not be very elegant, but it always survives. Hedgehog thinking happens at the confluence of three concepts: an economically viable idea, the ability to be the best in the world at something and a passionate drive for the work. Where all three of these things exist, the organization is using hedgehog or disciplined thinking

Collins explores the role of technology in success. He finds technology on its own neither creates success nor failure. Rather, technology acts as an accelerator. He found great companies use technology, but only to augment their hedgehog approach. Conversely, he found companies who failed to adopt technology were doomed to fail despite their technophobic ways. Disciplined thinking with respect to technology requires a crawl, then walk, then run attitude. Apply technology as it is useful and then master it before increasing its presence in your business.

Disciplined Action

When it comes to action, there is power in focus. The core concept of a business is its flywheel. The flywheel is the idea behind the organization that makes its business concept work. Just like the weight of a mechanical flywheel generates momentum as it spins, the spinning of the business’ flywheel has a multiplying effect on success. Collins found strong evidence that good to great companies figure out their core concept and then do everything to keep it turning at a steadily increasing pace. It may take years, but with consistent and dedicated effort at turning the flywheel, eventually enough momentum gathers that a breakthrough takes place.

This build up / break through concept focuses on preserving the core (organization values) and stimulating progress (business model.) The research found something I have LONG believed… when everyone focuses on turning the flywheel there is NO NEED for alignment exercises, motivational speeches and change management because everyone already knows what to do. Convincingly, Collins points to abundant data that show large pay packages — rather than causing improved performance — make no difference and may even be harmful for success of a company. The rock star CEO is a myth and the grossly inflated pay packages that go along with this type of elitism is simply a waste of organizational resources.

Summary

Good to Great gets two thumbs up from me. And, now that I’ve read two of his books, I’m anxious to read Built to Last. Although this was the first book in the series, he recommends reading Good to Great first. Supposedly, there is another book in the works too. I look forward to more of Collins’ data-driven, insightful approach to good business.

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Book Review: A Life at Work

Posted on December 9, 2009. Filed under: Professional | Tags: , , |

Life at Work book cover.I first learned of Thomas Moore (not Sir Thomas More the saint who lived during 15th and 16th century England) several years ago from a therapist friend. I “discovered” him again while looking for books to help with my work-life transition, post layoff. According to his website, Thomas Moore has written 16 books on deepening spirituality and cultivating soul in every aspect of life. He has been a monk, a musician, a university professor, and a psychotherapist, and today he lectures widely on holistic medicine, spirituality, psychotherapy, and the arts. His book A Life at Work: The Joy of Discovering What You Were Born to Do was first published in audio format in October 2007, hardcover followed early the next year.

When my friend initially recommended Moore, I bought his book Care of the Soul, but found it much to “dense” to easily absorb. I only read the first one or two chapters before it went to the “someday” reading pile and eventually found its way into my bookcase for long term storage. Similarly, I found his writing in A Life at Work to be difficult to penetrate. Still, with the motivation of wanting to know how to discover the work I was born to do, I persisted. I actually read the book cover-to-cover twice before feeling partly comfortable discussing its content!

The persistence paid off. Maybe it’s his background as a monk or even his decision to leave a religious life to live in the bigger world, Moore’s book provides insight into life at work through understanding one’s relationship to your spirit and soul. He provides an introduction to several useful terms in conducting spirit- and soul-work and provides insight into love and community. He suggests by understanding these things, what you were born to do will emerge… if you are quiet and pay attention. Moore strives for a life of duality and an opus of the soul. The book uses an analogy with alchemy throughout, identifying different stages of the search for one’s opus with the colors of black, red and yellow as they might be described in an alchemist’s notebook.

Fundamentally, it’s important to understand Moore’s concepts of spirit and soul. In his writing, spirit is something within us that looks forward, lives in the future and dreams big. It is the vision that lives within us and pushes us to be all we can be and do all we can do. The soul, by contrast, has roots in the past, keeps us grounded in our own history, learns from our experience and is our quiet connection to meaning. It is our soul that not only defines our deepest desires… it is our barometer for knowing when are fulfilling our life’s purpose.

Moore uses story telling as a means to accessing the messages of the soul. He recommends telling stories of our past over and over to as many people who will listen. It is the retelling that brings depth to our stories and this depth is the key to unlocking the treasures of our past. He values the listener who will simply hold space and listen quietly, but he also says we can analyze our own stories by paying attention to our own resistance. If there is a part of a story we skim over because it is “not relevant” or “not important,” he urges us to pay attention and tell it anyway. Often, says Moore, there is gold in that resistance.

He also advocates for dream journaling. He discusses the value of listening to our dreams holistically. He says avoiding analyzing too deeply and pay attention to the symbolism contained within. Those symbols hold clues to purpose and meaning.

Moore uses the Greek concepts of the daimon and duende to speak to an inner urge to do what is right and the ability to put your life on the line without the approval of polite society respectively. Daimon and duende push us from within to discover our true self. (This was part I had trouble unpacking, perhaps the links provided in this paragraph will do a better job than me for describing their importance. Looks like a third reading is in order.)

A lengthy discussion of three kinds of love – eros (sexuality, creation and pleasure), agape (compassion for one’s neighbor) and philia (friendship) led to a marvelous discussion of the importance of community. Moore describes community as a frame of reference where you define yourself in relation to those around you. It is the opposite of narcissism. It is a growth from self-love to love of the other. To pursue this growth, Moore suggests enlarging your sense of self — as opposed to attempting to going outside the self. The soul, he says, extends beyond the self into the community and the natural world.

Summing up, I found the book difficult to read but worth the struggle. I suspect I’ll read it a few more times. It is almost poetic in its composition. (Which may contribute to its complexity.) The modicum of success I achieved in these initial readings in fact have inspired me to go back to another attempt of Care of the Soul.

The Joy of Discovering What You Were Born to Do

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Book Review: An Angel Inside

Posted on November 25, 2009. Filed under: Professional | Tags: , |

The Angel InsideTold as a parable (think The One Minute Manager), this self-discovery book is a light treatment for a very weighty topic about finding one’s calling. The full title of the book by Chris Widener published in April 2007 is An Angel Inside: Michelangelo’s Secrets For Following Your Passion and Finding the Work You Love.

While the topic is of particular relevance to me — thinking about an encore career, I’ve got several of these books on my reading list — the treatment was a little too simplistic for my tastes. There were interesting morsels for sure, but the overall effect was merely diversionary.

Quickly, the parable starts with a young man on vacation in Europe for two weeks to find refuge from his Wall Street job and recently failed love relationship. He is seeking answers and hoping to find them in the museums of Europe. While sitting at a cafe in Florence, Italy an older man introduces himself and offers a tour of his hometown. The younger man tags along as the older man provides a series of eight lessons.

  1. There is an angel in each of us. As Michelangelo said while studying a block of marble prior to starting to cut for his ultimate masterpiece, “There is a masterpiece in here, I simply need to release it from the stone.
  2. Follow your passion. When we feel stuck in our jobs that is a clue that we have not yet found our calling.
  3. Act with confidence. It sometimes takes a bold and risky step to discover our passions. Like quitting a highly paying job because it doesn’t feed our passion. (Hmmm, sounds familiar!)
  4. Beauty is in the details. As the young man is studying il gigante, he discovers that what makes this carving a masterpiece is not just its lifelike appearance from afar, but the incredible attention to detail Michelangelo provided in its closeup relief. Similarly, if we cannot find joy in every aspect of what we are doing, we must be in the wrong job.
  5. Connect the heart with the hand. Not only must we have a vision for our masterpiece (heart) we must translate that into action (hand). Vision without action remains unborn. Action without vision lives without a soul.
  6. Plan your work. Move fast enough to get where you want, but slow enough to get it right the first time. Some masterpieces take years to complete, so don’t worry about a schedule. On the other hand, waiting for it to land in your lap will not produce results either.
  7. Action is the beginning of accomplishment. Every successful endeavor begins with a single, swift action. In the story, the young man observes an artisan who has spent weeks preparing a piece of marble before he takes sledge hammer to the rock. Sculptors move from big, heavy chisels to smaller and more delicate ones to sanding and finally polishing. In our careers, we should expect a similar progression of action.
  8. People and books shape who we become. The wise elder instructs the young man to be selective with whom he socializes and what literature he puts in his head. He advises (and this was my biggest pearl of wisdom from the book) we should avoid people who keep us stuck in our comfortable patterns and read old autobiographies. There are too many obstacles to discovering the angel within without having friends who help us avoid it. Similarly, books written a long time ago and still in print contain messages that are enduring and worth reading.
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Book Review: The Empathy Gap

Posted on November 19, 2009. Filed under: Professional | Tags: , , , |

The Empathy Gap: Building Bridges to the Good Life and the Good Society by J.D. Trout was written in early 2009. The title intrigued me as I was looking for clues about why large-scale organizational change is so difficult.

Despite training and experience implementing change in large organizations for most of my 30-year career, I have become discouraged about the probability for success in such endeavors. Many times I’ve seen good-intentioned, intelligent people undertake difficult and complex problems… rarely have I seen success. Most of the time, there is big fanfare announcing a grand change program, followed by large outlays of time and money with an eventual closure of the program a few months or years later. Sometimes there is a low-key “post-mortem” to understand why the project failed to meet its objectives. More often, even this rudimentary step is foregone and the project is quietly buried. Sometimes, colleagues reminisce about the project while sharing war stories. But for the most part, such experiences are generally forgotten — organizations rarely learn from these failures.

A recent experience with a large-scale change project at the State of Oregon brought all this frustration to a sharp focus for me. As of this writing, the project has been underway for almost two years and has yet to produce results in line with its promise. The effort has spent millions of taxpayer dollars and has been tied up in an endless cycle of analysis and justification, quiet resistance and navel gazing (a technical term referring to spending excess energy understanding how to work such that one loses sight of why the work was initiated.)

What is an Empathy Gap?

  1. Context rules. A person who has direct and personal knowledge of a situation is more likely to understand its uniqueness and the value of options than someone who has only studied or read about it. For instance, Trout sites a study showing US Congressmen who have daughters are more likely to vote favorably for women’s legislation than those without such a reference point.
  2. Proximity matters. A need that is close by is much more likely to capture our empathy than one that is very far away. We are more likely to feed a hungry person at our door than send money half way around the globe to help thousands or millions of starving people in a place about which we’ve never heard.
  3. Immediacy matters. A need that is far in the future is easy to ignore compared to one that is immediately at hand. We are more likely to put off acting green (as in environmental responsibility) due to present inconvenience because the inevitable consequence is a long time off. Indeed, if one listens to the global warming naysayers, its inevitability is even uncertain. Action is more likely to be demanded when crisis occurs.
  4. Line of Sight. If we cannot personally see a connection between our behavior and an outcome for a group of individuals, despite intellectual suggestions, it is hard to get us to act. That is, we lack the empathy to act.

Social Engineering

Trout’s answer is a version of data-driven social engineering. He admits the term sounds frightening, even Orwellian in its implications. Indeed an internet search reveals social engineering as a security scam for getting information from people without them knowing – phishing is an example. If you can get over the negative connotations of the term, he explains how groups in a society make bad choices because they may only have bad options from which to choose. His version of social engineering involves studying situations objectively, collecting and analyzing data to identify the “best” outcomes and designing large-scale systems and programs to limit choices. Only options in the best interest of the target population should be allowed.

Sounds devious. Only if you have devious intentions. Trout uses an easy-to-understand example of social engineering — helmet laws. There is ample data around survivability for users and non-users. The reality is harsh, more people die when not wearing a helmet when an accident occurs. This is already common knowledge.

But isn’t wearing a helmet a personal choice? Only partly. Sure, the motorcyclist riding without a helmet gets the joy of feeling the wind in his hair. To be sure, it is more likely a helmet-less rider will arrive safely at his destination than he will be in an accident. However, when an accident does occur, he is 17 times more likely to die and many more times likely to end up in an emergency room. At that point, it is no longer personal. If the rider has no insurance, the public picks up the expense of treatment — hospitals do not turn away insurance-less trauma patients, that would be even more tragic! Even if he does have insurance, the pool of insureds bare most of the expense for his treatment. If he dies, his survivors suffer tremendously. Either way, the life of anyone else involved in the incident is likely to be impacted as well.

But what about freedom of choice? This does remove some choice, but only when that choice is not in the common good. Trout predicts objections from a Libertarian audience on this point. Trout argues convincingly that the rights of individuals of a society should not take precedence over the rights of the larger society.

Build a System With Only Good Choices

Frequently throughout the book, Trout returns to the problems of poverty and world hunger. Certainly, two of the biggest problems of our times. Pulling from the observations around the empathy gap, those who have not experienced poverty often think of it as a “personal” failing or choice. “Those people are lazy.” Or, “They deserve what they get.” Trout’s data is convincing that people in low socio-economic status often lack good choices. Using the concepts outlined in the book for social engineering, Trout proposes a system that restricts programs — like debt instruments — to only those options that work in favor of the individual.

What This Means to Me

I have been a student of systems thinking ever since the early 1990’s when I read Peter Senge’s The Fifth Discipline (it was updated in 2006.) My favorite quote, “Every system is perfectly designed to generate the results it creates,” speaks to the lesson that good people in bad systems rarely succeed. Put together an imperfect or deeply flawed system (like the financial services market in the US) and throw in millions of unwary or naive borrowers and you end up with a global financial crisis.

Closer to home, if one can use data to design systems that create smart outcomes and limit the choices to those that are in their own best interest of the users and the organization, everyone comes out ahead.

I’m unsure when my next opportunity will come to apply what I’ve learned to a large-scale change project, but I intend to pull heavily from the content of this book when I do.

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