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July 2007

July 26, 2007

Words to Live By

After reading Freakonomics earlier this year (a very easy and interesting read) I asked myself, “O.K., that was fun, but what did you get out of it?” 

So I jotted down a brief catechism:

1.    Challenge conventional wisdom.

2.    Beware of experts:  they depend on information asymmetry!

3.    Beware of data:  answers lie in the data, but the data can also lie!
(It’s the questions you ask that determine whether you get answers or lies).

4.    “WHY?”  The most important question you can ask!

5.    Devising incentives is fraught with hidden traps!

6.    Be a contrarian!  You may not always be right, but you’ll have more fun!!

Just a few helpful tips to keep in mind. If you're interested in more from Levitt and Dubner, check out the Freakonomics Blog Page.

Freakonomics_4

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July 13, 2007

Renaissance

Birthofvenus2_3 What does the word “renaissance” mean? Quite literally, of course, it means “rebirth,” but most of us think of it as an historical period in which there was a revival of classical Greek and Roman art, literature and philosophy.  Beyond that the word implies the release of individual creativity and innovation  -  not just in “things,” but innovation in ways of thinking.  After the cultural and social depression we think of as the “dark ages,” the Renaissance gave birth to a new sense of self, of individuality and innovation.  And just as surely as night follows day in human affairs there followed a counter reaction to this newfound freedom of self.  That reaction was toward centralized control, in the power of princes, kings, the church, all in the name of establishing more order in the Renaissance world.

I’m reminded of an incident many years ago.  A neighbor, a recently retired marine sergeant who lived next door to us in San Diego, was talking with my wife Mary and announced he was “re-upping.”  “Why?” she asked, “you’ve served thirty years.”  He said simply, “Yes, but I just can’t stand all these people out here running around loose!”

The tension between freedom of expression and social order, between innovation and control, is just as real today as it was five hundred years ago.

In his book The Waning of the Renaissance: 1550-1640, author William J. Bouwsma concludes by observing: 

Balance historically, however, is usually precarious, as one set of changes stimulates reaction in the opposite direction.  The result for the period discussed in this book [1550-1640]…was a pattern of alternation; conflicting impulses were often simultaneously at work, without a clear resolution…between the creativity and spontaneity of cultural freedom and a growing tendency toward order and restraint.  But the general impression this period presents is one of tension between the fundamental needs for both freedom and order.

One need only consider the overreaction explicit in the cry for order and control in Sarbanes-Oxley vis-à-vis the excesses of “creativity” in the Enron and similar corporate sagas to understand that, although amplified by sophisticated technological and financial advances, fundamentally things  -  especially human nature  -  have not changed that much since the sixteenth century.  The tension between the fundamental needs for both freedom and order is still with us.

We need leaders with “an eye for innovation” and the wisdom to foster and nurture creativity without overreacting and imposing reactionary control.


As Lee Iacocca puts it in his recent book, Where Have All the Leaders Gone?, “Balance not only historically but in our present day and age is indeed precarious."

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July 06, 2007

The iPhone-Uncertainty Equals Opportunity for Innovation

Iphone_and_jobs The iPhone has now officially launched.  We know because in the Friday, July 6th Wall Street Journal there appeared the headline: "Hackers Bypass iPhone Limits".  The article states, “Several hackers have posted on the Web step-by-step instructions on how to activate the iPhone’s Web browser and iPod without signing up for an AT&T contract.”  The article then expands on hacker activities and counter measures, opinions and so forth.

My thoughts on reading this article were not about hackers and hacker counter measures, but about the extraordinary ability of Steve Jobs, to visualize hardware and software integration in extraordinarily appealing ways.  The underlying technologies in the iPhone are not unique to Apple, nor are they new (the use of touch screens is just one example of that). The innovation, however, lies in integrating existing technologies to comprehensively combine mobile phones and mobile music in a useful and exciting way.

For Apple to simultaneously challenge existing handset makers (e.g. Nokia and Motorola) and the fierce competitors in the mobile phone service industry, displays an extraordinary ability to take on uncertainty.  Perhaps not quite up to Admiral Shakelford and the incredible saga of his voyage on the Endurance to Antarctica, but at least in the same league.

The word “uncertainty” evokes strong emotions when used in the discussion of business strategy.  Other words such as “strengths,” “weaknesses,” “competitive threat,” “capabilities” describe strategic factors that may be positive or negative, favorable or unfavorable, but the words themselves do not evoke anxiety or fear.  Fear, of course, is simply underlying anxiety translated into some specific ogre.

“Uncertainty” on the other hand implies not knowing exactly what is going on and thus not knowing exactly what to do.  True innovators such as Jobs know that in uncertainty lies opportunity…opportunity for innovation and regeneration.  In The Eye for Innovation I state this simply:  “In the face of uncertainty, the courage to dare is the courage to innovate.”

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