^∞Fouroboros

And now, the Good News (at least, for me and mine)...

...that I fear (okay, know) those guys from the previous post will refuse to get until it hits them with a bat hammered full of nails.

BusinessWeek

The Empathy Economy
"Design thinking" can create rewarding experiences for consumers -- the key to earnings growth and an edge that outsourcing can't beat

You can't Six Sigma your way to high-impact innovation, but you can design your company to generate products and services that provide great consumer experiences, top-line revenue growth, and fat profit margins. That's the sometimes-painful message CEOs in America are learning today.

Quality-management programs can't give you the kind of empathetic connection to consumers that increasingly is the key to opening up new business opportunities. All the B-school-educated managers you hire won't automatically get you the outside-the-box thinking you need to build new brands -- or create new experiences for old brands. The truth is we're moving from a knowledge economy that was dominated by technology into an experience economy controlled by consumers and the corporations who empathize with them.

"Outside-the-box"? Screeeeeee. But good for BusinessWeek. Now, as soon as the American Marketing Association can bucketize and structure the ROI on "empathy," offering controls and metrics... well, then we can we can really consider this a serious development.

Enjoy your weekend. Go get yourself a heapin' helping of humanity.

Up the food chain we go...

BusinessWeek

Outsourcing Innovation
Big-name companies such as Dell, Motorola, and Philips are farming out their R&D to giant but little-known Asian developers. It's fast, efficient, and yes, it's cheaper. But the economic implications are enormous. Are these companies going too far?

....HTC? Flextronics? Cellon? There's a good reason these are hardly household names. The multimedia devices produced from their prototypes will end up on retail shelves under the brands of companies that don't want you to know who designs their products. Yet these and other little-known companies, with names such as Quanta Computer, Premier Imaging, Wipro Technologies (WIT ), and Compal Electronics, are fast emerging as hidden powers of the technology industry.

They are the vanguard of the next step in outsourcing -- of innovation itself. When Western corporations began selling their factories and farming out manufacturing in the '80s and '90s to boost efficiency and focus their energies, most insisted all the important research and development would remain in-house. But that pledge is now passé...

A dog growls at a passerby. The passerby turns to approach the dog. The dog bares its teeth. The passerby moves closer. The dog growls some more. The passerby thinks better of it and moves on. And the dog returns to chewing off its tail.

Wait, I like this story better.

A FISHERMAN skilled in music took his flute and his nets to the
seashore. Standing on a projecting rock, he played several tunes
in the hope that the fish, attracted by his melody, would of
their own accord dance into his net, which he had placed below.
At last, having long waited in vain, he laid aside his flute, and
casting his net into the sea, made an excellent haul of fish.
When he saw them leaping about in the net upon the rock he said:
"O you most perverse creatures, when I piped you would not dance,
but now that I have ceased you do so merrily."

Yeah, that's it.

Steve Neiderhauser knows p³ + What / How = Why!

Well, it's always nice when, after launching a daisy cutter (TM - Spooky Action) like this previous post, one of your grumblings is echoed by a nice piece of higher powered big-time consultant research. The assertion was:

... in the pursuit of lean, all we get is mean. As we lop off 10 one-thousandths from the sheet metal we use to make our microwave ovens to squeeze 10 million out of our Cost of Goods Sold, we know what is happening. It is mated with management naivete born of hurry, pressure or boredom that drains 100 million from another line on the P&L.

The Big time consultant? BoozAllenHamilton. Take it away, Steve...

8 Simple Rules for managing a wayward company

What's a bigger disaster than all the combined corporate scandals of the last five years? Why, it's incompetent management, of course.

Bob Prosen, the executive director of the UTD Prosen Center for Business Advancement, cites an analysis by Booz Allen Hamilton -- Management ineptness, over the past five years, has cost shareholders seven times the lost equity value from corporate scandals.

In an interview (registration required) with Dallas Morning News columnist Cheryl Hall, Prosen talks of a survey that he created -- 64 top Dallas-Fort Worth executives responded to questions about leadership. Then he surveyed their employees. The results?

The two groups are on different pages, maybe on different books.

Among the most serious disconnects: 70 percent of the executives felt they clearly communicated their top business objectives. But more than half of the employees couldn't articulate them.

"When you walk the cubicles and ask employees what are the company's top two or three objectives, many say, 'I don't know,' or possibly 'I don't care,' which is a bigger systemic issue of culture and morale," Mr. Prosen says.

Gee.Shocking. More folks who don't know, haven't been told clearly, couldn't care less: What?" and "Why?" (Secret: If you know why, you don't have to have all the answers to "what?") Steve has more on Prosen's 8 Simple rules derived from MBWA (management by walking around. Check it out.

Take it easy. You're making us look bad.

"We have to walk before we can run."

Overheard that nugget being used to flog a really smart person today.

Bullshit.

Infants have to walk before they run. But they only run if their parents let them; only if those parents remember that falling and getting a boo-boo is part of growth and ambition.

But "walk before we can run" gets used by 45-year olds overseeing 30-year olds all working for 75-year old companies. Not too many diapers in those boardrooms. Just plenty of "wubbies."

No, "We" don't run because those who can grant permission--encourage the running--prefer to walk. Walking is a higher percentage endeavor in their eyes. A lower exertion one, too. Running is not their ambition, exposure makes them anxious. Horizons make them squint.

Problem is, people are hard-wired to run. And to admire the fleet of foot. And to follow them. In business and evolution, running is a primary adaptation that allowed man to climb to the top of the heap. Running ahead too far has it's dangers certainly, but those are issues of direction and purpose, not speed--running just to run, to feel or look busy, not to get somewhere. Too bad Darwin proves the "walk before we run" business people wrong. Too bad, for all of us, that what "walk before we run" people really usually mean is: I prefer camouflage to speed. And average over ambition.

Run. As soon as you can walk. You'll encounter more numerous useful experiences. You won't get eaten as easily. And you'll like who you become.

Whither Comparative Advantage?

Washington Monthly

“We no longer have a lock on technology,” David Baltimore, a Nobel laureate and the current president of the California Institute of Technology, wrote recently in the Los Angeles Times. “Europe is increasingly competitive, and Asia has the potential to blow us out of the water.”

What worriers like Baltimore are beginning to grasp is that these changes are emerging just as the American economy is being made more vulnerable by the movement of manufacturing and service jobs overseas. As a result, we've become increasingly dependent on maintaining our edge in discovering the new technologies and applications that create whole new industries—just as other countries are closing that gap.

This is an excellent read. And here's a nice comaparative reason why...

On an overcast day in mid-December, President Bush assembled a group of CEOs at the Reagan Building—a behemoth of a federal office complex that has become the favorite venue for small-government conservatives—for a conference to promote his economic agenda. The tone of the conference, so soon after a winning election, was upbeat, cheery, back-slapping, the happy Chamber of Commerce banter of executives who have recognized a problem that they know how to fix. At the end of the day, the president himself took the stage. He said the economy was fundamentally strong and that government's role would be to “create an environment that encourages capital flows and job creation through wise fiscal policy.” To do this, he said, he would ask for Congress to privatize Social Security and make his tax cuts permanent. He compared himself favorably to Franklin Roosevelt. He left the stage.

During the same conference, two floors up in the very same building, a group called the Council on Competitiveness held another event for the press, in which it laid out a very different vision. This group, comprised of 400 blue-chip business executives (the CEOs of IBM, Pepsi, and General Motors, among others) and university presidents—as rough an approximation of the American establishment as you could fit in a single room—was nearly as downbeat as the president was buoyant. The astonishingly fast rise of international competitors, they warned, has meant that the American economy has reached an “inflection point,” a “unique and delicate historic juncture” at which America, “for the first time in our history…is confronting the prospect of a reverse brain drain.”...

Lots more here. Go check it out. Funnily enough, covered this syndrome a year ago January. Aww, what the heck, I'll quote myself....

The Creative Class rises, then emigrates to Bondi beach.

From How the GOPs Anti-elitism could ruin America's economy:

...the lion’s share of benefits from The Lord of the Rings is likely to accrue not to the United States but to New Zealand. Next, with a rather devastating symbolism, Jackson will remake King Kong in Wellington, with a budget running into upwards of $150 million.

Peter Jackson’s power play hasn’t been mentioned by any of the current candidates running for president. Yet the loss of U.S. jobs to overseas competitors is shaping up to be one of the defining issues of the 2004 campaign. And for good reason. Voters are seeing not just a decline in manufacturing jobs, but also the outsourcing of hundreds of thousands of white-collar brain jobs—everything from software coders to financial analysts for investment banks. These were supposed to be the “safe” jobs, for which high school guidance counselors steered the children of blue-collar workers into college to avoid their parents’ fate.

But the loss of some of these jobs is only the most obvious—and not even the most worrying—aspect of a much bigger problem. Other countries are now encroaching more directly and successfully on what has been, for almost two decades, the heartland of our economic success — the creative economy.

Very good article encapsulating the folly of traditional economic and business thinking in the face of a world fast learning the lessons of growth and ambition--and in many cases, walking the talk better than we do. Read it, it's about much more than the movie business.

Richard Florida is an Economic Development specialist whose 2001 book, Rise of the Creative Class, factually and in great detail finally took the knees out from under the traditional urban revitalization view: Build it and they will come.

They didn't, don't, can't, won't come.

You've seen the syndrome: Big stadia, gallerias, Biotech parks and incubators, big-box blackfields (Wal-Mart-ish aircraft hangars for retail, surrounded by acres of asphalt desert with shopping cart tumbleweeds).

These, and similar Frydeas* are the embodiment of the shortsighted "crown-jewel", "silver bullet" mentality of urban politicians and developers without opposable thumbs. And they fail with depressing regularity while siphoning off tax revenue and small business bases, thereby strangling community viability. You might call them the ultimate triumph of ego over any understanding of the food chain that is economic systems: Lions get the pampering. Gazelles, rabbits, mice and ants get bupkis because they aren't "sexy" [and can't roar]. In the end, the lions die of starvation too....

Okay, on second thought, go read the Washington Monthly article. It has fewer goofy analogies.