Monday, May 31, 2010

"Good to Great" by Jim Collins

This book came out almost 10 years ago, but within its pages, are some of the most thought provoking results on Business Excellence. Actually, Excellence in general. The great thing about studying Public Companies is that we can study their freely available numbers, we can break down their acceleration of growth, and we can talk to their bosses and innovators.

And that's exactly what Jim Collins and his team of researchers did. They found a handful of companies that had huge sustained growth for 15 years and asked "What are they doing? How did they get here? Why are they so rare?"

What they found were a string of totally non-MBA answers. A few simple concepts and only 10 or 20 leaders in the country could hold themselves to. Wow.

First, the leaders: we know that leaders in business can be very loud, very cool, very power hungry and egotistic.But these types of characters were nowhere to be found in the study. What did the leaders of these great companies (like Nucor, Gillette, Wells Fargo) have in common, when it came to leadership?

Diligence, and Modesty. That's it.

If you can find a guy or girl who will work all day and all night, and will do whatever it takes to rigorously do the homework (on the competition, on new technology, when it comes to hiring, when it comes to expansion), who is modest to a fault, that's your future CEO.

And they discovered something remarkable about their compensation too: it doesn't make a difference.
All the nonsense and backdoor deals going on on Wall Street, and here's a group of the best companies in the last 15 years, according to Wall Street, and the compensation was not a motivating factor, and did not move the stock price up or down. So what was it then?

These old fashioned, hard working, modest guys just wanted their company (not themselves) to grow and be great. Part of that modesty the leaders were not going for glory but diligently, and rigorously, doing the hard things to promote the company, the group, the collective. And here's a crazy thought: if you really want your company to be great, you'll set it up so that it will continue to be great, even after you retire! How many retired CEO's do you know that lose sleep thinking about their old company?How many companies have you worked for, that you've worried about, long after you'd already left the job? That's real passion, loyalty, and care for the company. And it's rare.

There's another theme that really hit home for me, on a professional level and a personal level. They call it the Hedgehog concept based on an old parable of the Hedgehog: 

In the woods, the Fox is always trying to eat the Hedgehog, but never succeeds. He tries various tricks, pouncing in the day, pouncing at night, being slow, being fast, luring the Hedgehog, or a surprise attack, but he just fails and fails and fails. The Hedgehog, with none of the speed, agility, or aggression of the Fox, survives with one simple defense. Whenever it sees the Fox coming, it just rolls up into a ball with those spikes out. The Fox can do nothing when the spikes are out, so it eventually gives up and wanders off. The Fox goes hungry and the Hedgehog thrives.

How could such an weird looking creature be the basis for business and personal excellence? By sticking to one thing. Basically, the Fox can be compared to a company with tons of great technology, a bunch of different projects, and lots of resources. By bouncing around to different things, it never really focuses its energy on one thing. And why does that matter? Because it never gets to be the best in the world at one thing that way. And so you never hear about them.

As people, we can consider the Hedgehog an inspirational figure of sorts: it is born with this one talent, or trick. It exploits that talent every single day, and as a result it thrives. It doesn't aspire to be like the Fox in speed and agility, and even grace. It just plods along, and slowly but surely, becomes great at being...a Hedgehog. Think of a Comedian that works on this one set of jokes, for 15 years. For 15 years you never hear about the guy, and then suddenly, BOOM, he's everywhere. You start seeing clips on Youtube, you hear he has a new TV show and movie deal in the works, and your friend think he's the funniest thing on Earth. Thats how it happens. Not overnight, but a long, gradual, almost mundane process, of sticking to one great thing.

Back to business, we found that this is one of the hardest things for great companies to do: say no to trendy, cool, hot new projects that threaten to pull the company far away from their core excellence.
For example, in the book, the American Pharmacy Wal-Greens decided they wanted to be the most convenient pharmacy in the country. That was it. Once they had that idea, all decisions were easy. It meant doing some crazy things, (like closing a store, only to reopen a store a block away with better access from the main traffic routes, etc) but it got them all the answers. If you can prioritize, you can answer any question. And you can only prioritize if you have rigor and discipline.

The first two factors of the Hedgehog concept are Passion and 'Best in the World Focus.' The third and final factor is, at last, about money. After all, I didn't say these companies were the coolest in the US (a steel company and a drug company?), they were being highlighted because of their consistently excellent performance on the stock market.

The final factor was choosing a metric that defined how they measured excellence, and zeroing in on that target. These guys could aim to maximize profit per store, profit per employee, profit per country, profit per customer visit, anything they wanted. And each one had its own implications for future plans. The bottom line is this, the third factor is the way the company measures how well people are doing their jobs. Walgreens wanted to maximize profit per customer visit. That meant every time someone walked in the door, all the advertisers had done their jobs. Now it was time to see just how great the experience was to be in a Walgreens store. If it was great, profit would trend up. If it was confusing, noisy, over crowded, empty shelves, rude staff, the profit would trend down. It's that simple. By zeroing in on this one metric, Walgreens beat the market by a mile, year after year after year.

There's a ton in here, that I just couldn't get to. If you're into it, go pick it up, its a great read, lots of amazing anecdotes in here. Yes its a business book, and yes I've got some terrific ideas for my own job, but you can get a tremendous amount of personal insight as well. Here's food for thought : what one thing can I do, day in, day out, and eventually be the best in the world at?

Friday, May 21, 2010

"Meeting the Shadow: The Hidden Power of the Dark Side of Human Nature" edited by Connie Zweig and Jeremiah Abrams

After another bout of writing, some to do with Psychology, I was reminded of an incredible book that I should share on here, about peeking into the Shadow. This is really mind cool stuff-- a collection of short essays on the 'Shadow'...not to be read front to back, but nibbled on.

If you're not familiar with the term, "Shadow," Psychologists Sigmund Freud and Carl Jung bandied about terms regarding what they thought made up a Personality, namely, what is the process of Human Personality Development. This is all very obscure stuff to measure, of course (being Psychology), but after 20-30 years of dealing with a vast array of Psychological traumatized patients, and finding patterns, some these two mavericks had a great base of experience to draw from. Even more fascinating, they both made detailed records of their dreams, and analysed the symbols therein (leading to some of Jung's most provocative work on Archetypes). What arose, in one form or another, was a theory of development whereby the Human Personality is said to split into the Persona, and the Shadow. Basically, the whole 'Self' (you and everything about your personality) is split into the Good part (the Persona) and the Bad part (the Shadow).

Before I get attacked for using such childish language here, the "Good" part is not necessarily good; its only good because Society says it's acceptable and polite. The Bad is not necessarily bad at all, except that Society says it's inappropriate or unsuitable for public display. (As you can imagine, this means Shadow and Persona traits likely vary from country to country, and change over time, as society's norms change).

Remember when you were in primary school, and a teacher told you not to speak out or make jokes in class. Maybe you liked to ask very interesting or unique questions in class, and the teacher told you to be a good boy/girl, and only ask 'good' questions. Maybe you told your parents you wanted to learn the electric guitar, and they said you couldn't because they didn't want you to hang out with a 'bad crowd.' When we are very young, we are free of hindrances, brashly expressing ourselves, like little Emperors and Empresses.

"I'm hungry!" "I'm bored!"  "I want candy!"  "I'm not sleepy, I wanna stay up!"

Society eventually nudges us in the "right" direction, by telling us what we should and shouldn't do. This is why we need a Shadow. We need a place to put all those 'bad' character traits.

In terms of Personality development, as soon as we learn certain things are 'bad' and certain things are 'good', we subconsciously remove certain elements of our personalities from 'public display.' That is, we take certain parts of our personality and put them into the 'Shadow.' All the things which society says are 'acceptable' become the Persona. The result? Most of us are civilized men and women, following the rules, waiting for the right traffic light to go, and waiting for the right signal to approach and talk to our fellow man, never acting on impulse, always subconsciously calculating to do the 'right' and most 'polite' thing. Subconscious is the key here. To stay sane, and stay congruently in Society, the Persona must act as if the Shadow doesn't exist.

As it turns out, if we are very 'good' people, much of our 'life energy' is trapped in the Shadow. We are essentially living half of our true personality, and putting half our personality, half our impulses and half our desires, in a prison of sorts.

Sometimes, in the midst of a trauma, a crisis, or an emotional breakdown, the Shadow will 'break out of Jail' and let itself be known. Also, if we ignore it long enough,  eventually it will burst onto the scene, with all its wild impulses and outrageous ideas. After all, if we follow the 'Persona' all our lives, and don't feel happy or fulfilled or loved, eventually the Shadow's nagging whispers will start to make sense! Perhaps not surprisingly, in addition to life energy, much creative energy is locked up in the shadow. After all, whats could be more boring, than a movie, TV show, or song spawned from dozens of intermingling 'acceptable' and Politically Correct traits and feelings.

'Meeting the Shadow' not only outlines much of Carl Jung's ideas (which did differ greatly from Freud, by the way) on the Shadow, it also outlines potential strategies for bringing the Shadow to the for (hence the title). The goal is not to become crazy. The goal is not to go on a wild killing spree. Locked up in the Shadow are very good traits, the problem is Society has given broad generalisations to young impressionable Children who then took it to the extreme.

"Don't Yell"
"Boys don't cry"
"Girls don't talk like that"
"Always wait your turn"
"Be nice to people older than you"

These may be good guidelines for young people, but as rules to live by they are ludicrous. Never Yell? Ever? Is it also a bad thing to get mad? Is it a Sin to ask for something, like food, or attention, or love? Also, if an older person is abusive to you (physically, emotionally, etc) should you let them??

As you can see, as we get older, we absolutely must examine the 'over-simplistic' beliefs  and rules we had as a child. If the Shadow goes ignored, it results in lifeless slugs, dead on the inside, from lack of expression, slaves to their childhood masters. Not only are they unattractive to the opposite sex, they are unattractive employees, and unattractive friends. Those who do not reconnect with the Shadow, ultimately become Zombies, constantly in fear of 'crossing the line' and occasionally snapping in a burst of 'Shadow' fury.

I know what you're thinking. Yes, sometimes these 'bursts' where the Shadow demands to be heard can be dangerous and shocking. It would not be surprising to hear that a normally quiet and subdued man woke up one day, mad at the world, mad that he's done everything 'right' and is still sad, lonely, and wretchedly poor, and suddenly gave into all of his Shadow instincts at once, possible attacking or hurting people in his apartment building or office.

Another fascinating consequence (according to Jung's work) of having an overly 'heavy' Shadow, is that we project those 'bad' traits onto other people. After all, if I'm such a good boy, then the only source of 'rude' and 'selfish' behavior in the world, must be other people, preferably people of my same gender, but from another country, or social class. It's incredibly common to hear ourselves or others make comments like "Everyone from [City X] is a jerk" or "I don't know, I just think people who [play badminton, drink espresso, write blogs] are the scum of the earth," and when we hear that, its the Persona bashing the Shadow. The Persona is saying, I don't like these traits so I've projected them onto people who play badminton, or work on Wall Street. Yes, this has dozens of implications for not only Racism, but also Wars. We have a situation in the US right now where Mexicans are being characterized by some as 'unfairly cheating' and 'trying to take our way of life'. Trying to build walls (or in Arizona's case, a fence ) to keep the Shadow away, is at once hilarious, and deeply sad.

If you can cut the Shadow down to size, and bring more Shadow traits to the fore, you can cut down on this insane Blogger bashing. Anyway, the goal here is not to go crazy and delve into the most bizarre impulses, but to get back that energy, that's locked up in the Shadow. The relaxed, cool, eccentric man understands and is curious about his dark side, and occasionally expresses it through art, or poetry, and is never afraid to stand up, and 'selfishly' ask the questions he's burning to have answered. Moreover, if his house is robbed, or his is physically threatened, he needs to channel his Shadow energy to protect them, not be the good boy.

A basic understanding of the Persona and Shadow complexes (that's what they are, just ideas, not actually real 'areas' of the brain, etc) helps guide us to understanding the Ego--how we can tame it, and how we can harness it. Perhaps I will write more about this in future.

Saturday, May 15, 2010

"Water: The Epic Strugge for Wealth, Power, and Civilization" by Steven Solomon

Apologies for the 1 month delay in posting. I have been buried in a 500 page tome on the history of the world. Again! But I'm back to the surface, and have much to report.

First of all, my work in Asia is in the Water business, and I considered it a huge advantage to keep myself not only informed but extremely well read on future projections and the latest in water technology, so I decided every now and then, I'd get a 'Water' book. This is my first. And it's a doozy.

You may remember the "Ascent of Money" was effectively the story of money, going back to the ancient times, well Steven Solomon's "Water" is essentially the exact same scope and timeline, but focusing on water. And it's actually worth it for anyone to keep up on this subject, but I would advise against a novice jumping into this book. While the historical accounts (in amazing detail) of the Chinese innovation, the Egyptians, the Babylonians, and eventually, the Steam Engine in Britain, which led to the Industrial Revolution, are amazing,...there's just so much information in here, at times it feels like you're studying for a Final exam. But give the author credit for taking on such an amazing task.

Make no mistake, this is not just a timeline of 'scientific developments'; what Solomon set out to do with this book is draw connections between the development of water technology, as well as the natural waterways/lakes/oceans, and political power. And that's where the real 'Aha' moments come from.

For example, in China, few foreigners (like myself) recognize that the Grand Canal (constructed est. 600AD) which spans from Hangzhou to Shanghai all the way north to Beijing, was actually the start of high volume Chinese communication, transport and trade, and was part of the reason the Chinese were so confident that they didn't need much from outsiders--shutting out foreign contact for hundreds of years thereafter.

In Egypt, the great Nile river, has always been the lifeblood of the country, used for irrigation systems, and eventually power generation (early turbine technology). Amazingly, the transport along the Nile was aided by an incredible bidirectional water flow, which meant traders and merchants could traverse North and South on this amazing highway, with relative ease. They had a very similar system to the Chinese, but naturally.

The point is this, to travel 100 miles by foot was often exhausting and dangerous and tediously slow, while getting on a raft and cruising upriver was much more pleasant in almost every way. This huge efficiency improvement shaped much of the worlds development, even up until the 19th century, when in the United States, investors and governors where pushing for very ambitious Canals for the very same reason. In fact, one of America's great shining moments was the opening of the Panama Canal, a monumental feat of engineering, joining the Pacific and Atlantic Oceans, such that trade routes could now pass straight through to Asia from Europe (and vice-versa), with America collecting the toll on every ship.

But there was a turning point, and it goes back to the very first wooden 'turbines' in China, and Egypt. We, as a species, have always thought of water as free. You look to the Ocean, and all you see is vast horizons of it. It is everywhere, it pours down from the sky, and gushes down from the mountaintops.  The human body is mostly water. So basically this planet, and everything on it, is chock full of water. We've basically treated water as a resource--a commodity of infinite supply--that we can do anything we want with. However, when we started building dams, for Hydroelectric power, we changed something: we started to divert and displace massive volumes of water. It seemed like the Hydroelectric dam would give us everything we ever wanted--free power, using naturally rushing waters to spin huge turbines and store electric power--but it did something else. It changed the environment. We now have incidents in India and China where rivers do not reach the oceans, as they once did. At the same time, our global population is booming, we're expected to hit 9 billion brothers and sisters by 2050. These two elements should have us on the edge of our seats.

And what of the next 40 years until then? More so than Oil ever did, what we are doing now with water will shape future alliances, and wars. Those who have the most resources, and the least population, will be freed of this challenge, and rise to the top in terms of development, power and wealth.

Understand that, unlike Oil, which has been fought over for ages, we cannot live without water. We cannot live without drinking it, and we cannot live without planting crops and irrigating the land. For our cheeseburgers, the farm animals must first be fed and be given plenty of water to drink. These indisputable facts are what is leading to not just power struggles, but wars. Even the most docile and peaceloving nations, without access to drinking water, must negotiate to get it, or must fight for it.

Of course, I'm an optimist so I'll end on a positive note: in developed countries, citizens use about 30 times the amount of water used in developing countries. That's our opportunity. Those in developed countries, in the same way we aspire to give great amounts of money to charities, shall aspire to not only cut down on their own consumption, but donate water/water credits to developing countries. Walking the soft path towards a harmonious existence not only with our brothers and sisters, but also with this planet, is the key to redemption. That's the message. We have 40 years to practice it.

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