Opinion

The Great Debate

from Paul Smalera:

Paradise regained: Clayton Christensen and the path to salvation

Is it possible in the year of our Lord 2012 that leadership still isn't well understood? In 2012, despite business journalism’s fetishization of Steve Jobs, the most successful leader ever, whose apotheosis was Walter Isaacson’s doorstop, Steve Jobs, a biography of the half-Syrian, bearded man who built the world’s most valuable company, brick by brick, and found himself, like an earlier CEO of sorts, with legions of devoted apostles, some powerful enemies, and an inextinguishable legend? Is it possible, despite the endless streams of management self-help articles burbling out of Fast Company, Inc., Harvard Business Review, Businessweek, Fortune and the blogs of droves of self-appointed leadership gurus, we need more advice? And is it possible despite the emails – so many emails, Jesus wept – those emails that aggregate all this content using algorithms and intern labor, and slice it up so that the middle manager in Minnesota and the lawyer in Los Angeles and the new media marketer in New York are all .0058% more likely to click through to a relevant article? Is it possible, really possible, the answer to our prayers is another book on leadership?

It is, thinks Clay Christensen. Business folks – the unquenchable consumers of all that content – have been taking the paradoxes of leadership, because they are so familiar, for granted. When they do this, they ruin their companies and then they ruin their lives. Like that subway step everyone tripped over for years without noticing, they take for granted that the well-worn grooves on our society’s pathways are the right ones to be in. They don’t watch the road to see when a turn they are on is about to become rutted, or when they might hit mud and tip over. They feel, like the pioneers, safe in a wagon train, but then something goes wrong, and they are very alone, very fast. They need the wisdom of a pioneer who has crossed the valley, and studied the path.

    Paradox one: Leading is usually about getting people to go someplace difficult and new, even if (or precisely because) they’re perfectly comfortable and prosperous where they are right now. Paradox two: A leader can’t just motivate people to change, she has to persuade them to actually take the journey, and care about its success or failure. Paradox three: Even if a leader succeeds, there’s no guarantee she will get any credit, or gratitude for the services rendered. Except for the millions of dollars in compensation some business leaders make, the magazine cover stories and books written about them, the hobnobbing with President Obama, being a leader can be the most thankless of tasks. Of course, if you do it wrong, you get shown the door.

Still. Celebrity, money, power – hard to shed a tear, it’s true. But pay attention, for a moment, before we get to the personal, to the failures of business leadership. The landscape is littered with the carrion of companies that blew it; high fliers that flamed out. If leadership can be occasionally rewarding, it is far more often the case that business leaders, even ones who have been coronated by adoring customers and media, end up, over the long haul, stumbling and failing. To put it in more fruitful terms: For every Apple, there is a Blackberry.

Yet to Christensen, Harvard Business School professor, consultant, investor, onetime failed CEO, the problems of leadership are not inscrutable. They are very scrutable. They just have to be worked through a sound theory. Christensen, 60, is most famously the author of business school bible The Innovator’s Dilemma, a 1997 tract that grew out of his HBS doctoral thesis, about the disk drive industry. His work has appeared in or been the subject of scores of articles in all the above-named publications, but there is something different about it. It’s a something that grants him the ear and attention of some of the world’s most powerful CEOs. Christensen excels at delivering to them a very special kind of bad news, which would be unwelcome but for his steady, deep tone, gentle nature, and unshakeable conviction that his findings offer a path to corporate salvation, no matter how fraught it is with trials and temptation. Christensen tells his chosen people that if they want to survive they must lead, and they have to have faith in the theory that shows the way. He tells them that the moment of greatest danger comes when they stand at the pinnacle of their industry. Upstarts are coming for their customers. Soon, they’ll be broke. His theories are familiar to business journalism junkies, startup founders, and those powerful CEOs. Venture capitalists and startup founders in Silicon Valley and beyond have found religion in the concept of disruptive innovation that he refined.

Using spare black and white charts, which are his favorite visualization tools, Christensen shows how well-managed, profitable companies can become abject failures in a breathtakingly short time by doing all the right things: They refine their existing products to be better and better. They cater to their best, biggest customers. And they try to grow their profit margins with every passing quarter. But it turns out the path they’re on is something like C.S. Lewis’s gently sloping road to Hell. Christensen sees Bethlehem Steel go bankrupt just a couple years after a glowing Wall Street Journal profile about its genius CEO. He sees the second largest computer company in the world, DEC in the 1970’s, reduced to irrelevance in less than a decade. He observes the tragi-comic rise and fall of Enron. And he studies those disk drive companies, which he calls the “fruit flies” of the technology industry, as they are born, evolve, succeed, and die by the dozen, in no time at all. What the loser companies and many others all missed was, he believes, the impact of disruptive technologies on their business.

Mike Daisey and our attention embellishment disorder

Last night at Georgetown University, I stood up and applauded Mike Daisey after he was done speaking about why he lied. As a journalist, you are not supposed to stand up and applaud the people you’re covering, especially people who just admitted to lying about key details about workers they had (or hadn’t) met in China. However, Daisey hit on a fundamental truth about labor journalism in last night’s talk at Georgetown. He claimed he stretched the truth about his visit to a Foxconn factory in China as part of his play The Agony and the Ecstasy of Steve Jobs (which later became This Americans Life’s most downloaded episode) to dramatize a story of labor abuse that had largely been ignored. As a labor reporter who has often seen stories I have written about brutal working conditions ignored, I sympathized with Daisey and his broader critique of the problems of labor journalism.

By embellishing, Daisey did what an activist — not a journalist — does. He got too emotional in his pursuit of trying to take on a big corporation, so he stretched the truth. This doesn’t make it right, but it does make it more effective. And so it forces us to ask very deep questions about the level of sensationalism required beyond the standard mistreatment of workers to get the media to finally pay attention to labor stories.

Covering strikes and lockouts, I have seen workers do the same thing: stretch the truth because they wanted to get at the company.

from MediaFile:

A new iPad, the same iEthics

Several days after the launch of the new iPad 3, HD, or whatever it’s called, we all know about it’s blazing 4G capabilities, including its ability to be a hotspot, carrier permitting, of course. We know about its Retina display, which makes the painful, insufferable scourge of image pixelization a thing of the past. We know about Infinity Blade. We know that to pack all this in, Apple’s designers had to let out the new iPad’s aluminum waist to accommodate some unfortunate but really quite microscopic weight gain. We know the iPad’s battery life is still amazing, and its price point is altogether unchanged. We know Apple has adopted a cunning new strategy of putting the previous-generation iPad, as it did with the iPhone 4, on a sort of permanent sale, to scoop up the low end of the high-end market. (We wonder if this was Steve Jobs’s last decree or Tim Cook’s first.) We know a lot about the iPad.

But what we don’t know: How many of Foxconn’s nearly 100,000 employees will harm themselves, intentionally or inadvertently -- or their families or loved ones -- in the manufacture of it? And will the developed world ever acknowledge the dark side of these truly transformative technologies, like the iPad, or will we continue to tell ourselves fables to explain away the havoc our addictions wreak on the developing world? Is a device really magic if to pull a rabbit out of a hat, you have to kill a disappearing dove?

Those of us who have been technology journalists have long been subjected to the cult of Steve Jobs’s Apple, and those of us who are fans of technology are mostly well aware of the stark elegance and extreme usability -- even the words seem inadequate -- that come with using, let alone experiencing, Apple products. But the rumblings about Apple’s manufacturing processes started years ago, and the recent New York Times series on the ignobility of Foxconn as an employer blew a hole in the side of that particular ship of willful ignorance. Few Apple consumers can claim not to understand the human sacrifice behind their glowing screens -- the death, diseases, exhaustion, mental and emotional stress, and superhuman expectations placed upon the workers who bring these magic devices to life. It’s not just in the papers -- Mike Daisey’s This American Life podcast exposé on Foxconn and Apple is a mere click away, and most mainstream media have given at least passing coverage to the working conditions reflected in the Gorilla Glass on our devices.

How Apple, and everyone, can solve the sweatshop problem

Every few years brings us another sweatshop offender. In the 1990s it was Disney, and then Nike and Gap. The 2000s brought us Wal-Mart. The past few weeks Apple has been in the crosshairs.

One question is of paramount importance: How can we use this current public conversation to finally drive a different outcome? What must companies do so that 15 years after Kathie Lee Gifford tearfully became the first sweatshop poster child, workers who make and grow products for global consumers are paid fairly, protected from danger and free to advocate for themselves without fear of reprisal?

The good news is that these years of effort have created robust experience from which to identify what has gone wrong. The fundamental driver of “sweatshops” is that multinationals do not place value on good working conditions in their supply chains. This does not mean that a company doesn’t care about how those workers are treated, or that the company intends to act unethically or exploitatively. To the contrary, big companies require good conditions through vendor standards and “codes of conduct.” They build corporate responsibility departments whose staff have budgets to reduce the risk of bad working conditions at supplier factories and farms. But their work is much like the arcade game Whac-A-Mole: A problem arises in one factory that they take steps to fix, while other problems fester and ultimately break through the surface elsewhere.

The Book of Jobs

Steve Jobs smelled so foul that none of his co-workers at Atari in the seventies would work with him. Entreating him to shower was usually futile; he’d inevitably claim that his strict vegan diet had rid him of body odor, thus absolving him of the need for standard hygiene habits. Later, friends would theorize that he had been exercising what would prove a limitless capacity for sustained and gratuitous lying that came to be nicknamed the “reality distortion field.”

Jobs originally learned the “reality distortion field” from Bob Friedland, an enterprising hippie he met by chance one day when he returned early to his dorm room and found Friedland having sex with Jobs’ girlfriend. Bob was four years older than Steve, and had taken two years off to serve a prison sentence for LSD trafficking. Like Steve, Bob would eventually become a billionaire, just in the mining business. His followers would often invoke his old drug dealer nickname “Toxic Bob.”

Steve Jobs needed no nickname. As the title of his definitive biography reminds, Steve Jobs speaks for itself. His name was his essence, what set him apart even among greats like Einstein and Kissinger, iconic figures with whom he shared a biographer, Walter Isaacson (though not the cheesy, descriptive subheads Isaacson used in his books about the other two subjects).

from Katharine Herrup:

Are corporations really occupying #OccupyWallStreet?

There are two stories about the corporate hijacking of #OccupyWallStreet on Reuters.com. One piece talks about how U.S. ice cream maker Ben & Jerry is making a laughing stock of the protestors by issuing a statement in support of the protest:

The directors of the board of ice cream maker Ben & Jerry’s released a statement saying they were supporting the protest.

But this corporate alignment doesn’t seem to have had the desired effect. Instead of drumming up support for the protestors it has made them something of a laughing stock. Papers, blogs and TV reports are running competitions for the best flavour ice-cream Ben & Jerry’s could create to honour the protests (ocu-pie is gaining some traction). But all of this is distracting from promoting the protestors’ aims and message.

Jobs made Apple great by ignoring profit

By Clayton Christensen and James Allworth
The opinions expressed are their own.

Steve Jobs retires as the CEO of Apple with a reputation that will place him amongst the pantheon of history’s great global business leaders. Many people have written about what makes Jobs and Apple special, but I think they’re missing what truly set him apart. Jobs has succeeded by eschewing the one thing that most people view as the raison d’être for companies — profit.

When I left the industry to come to academia 22 years ago, it was driven by a set of questions that had troubled me for some time. Why was it that the best run companies in the world — companies that have had incredibly smart leaders, following carefully detailed plans and with tremendous execution ability — reliably seem to come unstuck? The answer to this question is what has become known as the theory of disruption.

In a cruel twist of irony, the pursuit of profit — something that Wall Street pushes so hard — is what leaves companies open to being displaced. As they grow, their ability to find opportunities that are big enough to sustain their growth is reduced. They become myopic; they listen only to their best customers. They focus disproportionately on their most profitable products, and strive to improve these the fastest.

Apple over Microsoft by a TKO

robertXcringely
– Robert X. Cringely has been writing about technology since 1987 and blogging since 1997. His work has appeared, well, everywhere, but can mainly be read at http://www.cringely.com. The views expressed are his own. –

Winning by a technical knock-out (TKO) over Microsoft, Apple this week became, according to Standard & Poors, the second most valuable NASDAQ firm by market cap after Exxon-Mobil (click here for more on S&P’s ranking).  What a difference 13 years makes!  Apple is on a roll and while Microsoft is far from down and out it is clear that the competitive momentum lies these days with Cupertino more than Redmond.

When Steve Jobs assumed the CEO position at Apple on July 9, 1997 Apple shares cost $3.42 and the company had a market cap of around $3 billion. This week Apple shares hit $266 with a market cap of $241 billion — 80 times larger than it was 13 years ago.  Microsoft shares, in contrast, went from $17.67 to $31 in the same time frame — not even a doubling despite more than $80 billion in share buy-backs by the company.

For real results on climate, look beyond Copenhagen

– Aron Cramer is the president and CEO of BSR, a global business network and consultancy focused on sustainability. He is also coauthor of the forthcoming book Sustainable Excellence (Rodale 2010). The views expressed are his own.  –

(Updated on December 17th to correct figure in McKinsey study in paragraph 7.)

As world leaders seem uncertain about whether a binding treaty is even possible at Copenhagen, it’s important to remember what was already clear: Twelve days in Copenhagen were never going to solve climate change anyway.

No doubt, these negotiations, now extending into 2010, are crucial. The sooner we can seal a global deal to reduce emissions, the sooner we can avoid catastrophic climate change. But as important as the treaty negotiations in Copenhagen’s Bella Centre are, even a successful outcome will be for naught if boardroom decisions and factory processes aren’t reoriented toward a low-carbon future.

from Commentaries:

Apple-Google learn Corporate Governance 1.0

LONDON, Aug 3 (Reuters) - The resignation of Google CEO Eric Schmidt from Apple's board should come as no surprise to anyone with an inkling of what corporate governance means.

But then Silicon Valley's idea of corporate boards has long consisted of cozy, interlocking directorships which would be considered collusion in most other industries.

Google's CEO is not leaving Apple's board voluntarily. He is only stepping down in response to the increased government scrutiny of obvious potential conflicts of interest between the two companies.

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