Business Blog: Hoover’s Business Insight Zone

You need to get your head on straight instead.

A pencil is high technology if you use it for deeper thinking.

This comes to mind as I re-read this Dan Markovitz post:

The Lean Approach to Email Management: It’s Not About Technology

. . . Toyota is legendary for its production efficiency. The company is also legendary for being slow to introduce new technology. Management has always felt that it’s pointless to spend money on shiny new hardware, software, and equipment when the underlying process is broken: first get the process right, and then figure out whether it makes sense to invest in new technology.

. . . The real solution to the explosion of email isn’t a new Outlook add-in that makes sorting, filing, or finding email easier, any more than the solution to your weight problem is buying a bigger pair of pants.

I know many, many people who struggle with their e-mail overload. Or with meetings. Or with keeping track of the confustion of all their competing projects. Or whatever. Many of them are looking for a technology solution, whether that means a new e-mail filtering system, an enlarged memory partition on the e-mail server, or a better mobile device that lets them keep up with e-mails and IMs and tweets etc. while they’re in meetings. We could proliferate examples.

But what these folks really need is to get a grip on themselves. To ask themselves hard, basic questions about what their real work is and what they need to do to accomplish it. They need to examine — and then discard — their excuses. They need to really think about what value they bring.

By “they” I mean “we,” since I like the new shiny piece of technology as much as anybody. If I have a better grasp on this problem than some people, it’s because I’ve realized that in the overwhelming majority of cases, we don’t need better technology. We need to use our own brains better.

Okay, sure, some problems will only be answered by better technology. Samples:

• Cheap space travel.
• Ordinary cars that can run wholly off of solar power.
• Dirt-cheap desalination of seawater.
• Groundbreaking research in genomics, pharmaceuticals, and particle physics.
• 100% reduction in some industrial effluents.

But seriously, if you put your e-mail load into this category, you’re fooling yourself.

Stop fooling yourself. Think better.

I’ll try to help.

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More on this:

• The False God Opens a New Front - Kevin Meyer’s post includes this great line: “Automating the management of a problem is not managing the problem.”)
• “Workiness” is to work as “truthiness” is to truth. - Shiny new technology is often no more than a pit of “workiness.” You must avoid this like a plague.

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(Photo by Arwen Abendstern.)

(Please bear with a little bit of roundabout Friday-afternoon philosophizing here. And please share your opinions in the comments.)

In a 1986 lecture, computer scientist Richard Hamming talked about his work at Bell Labs during the early days of digital computing. There was never enough computing power available for all the projects that the Bell Labs scientists and engineers wanted to do, so they had to get clever about how to optimize their programs to run better with less horsepower. Much the same thing happened in the Soviet Union during the Cold War, where good computing hardware was often available only for top-secret projects tied to nuclear weapons or the Soviet space program. (Even then, the state of the art for Soviet computer hardware would often stagnate for years or decades at a time. ) But just like their contemporaries at Bell Labs, Soviet computer scientists were very clever, so they learned to optimize what they could — namely, the code running on the machines.

The contrast to modern computing is clear. Increases in the performance of components, especially microprocessors and memory devices, mean that the laptop on which I’m writing this has more computing power than anything Richard Hamming ever got to use during his heyday. But it also means that I need not be very clever about which files to keep and discard, since there’s plenty of hard-drive space for everything, and it also means that Microsoft, Adobe, Mozilla, and the other software makers whose programs run on this machine need not worry much about “bloat” in their applications. In other words, when more microprocessor cycles and memory space can typically be had on the cheap, software writers don’t need to put much of a premium on efficiency in their code.

Something similar has prevailed in the recent history of energy. Coal and oil have been so cheap for so long that no great emphasis has been placed on efficiency. There have been exceptions, as when Toyota, Honda, and other makers of fuel-efficient cars became more popular in the US market after the oil shocks of the 1970s. Sometimes, external factors like regulation to promote efficiency or to limit pollution have led manufacturers — of cars, washing machines, power plants, or what have you — to improve the efficiency of their products. But for much of recent business history, cheap energy has been so abundant that its users have not needed to worry about conserving it.

Some of this logic still prevails. Coal remains cheap and abundant, and consumers have come to expect ubiquitious availability of cheap electricity. That’s why both the US and China continue to see so many new coal-fired power plants. And despite strains in the world’s system of producing oil, it’s clear there are many billions of barrels of reserves still to be pumped. There’s increasing debate about exactly how long our stocks of coal and oil will last, but under any likely scenario the answer is measured in decades or centuries.

This is different, though, from asking how long our stocks of energy will be cheap — and it pays to remember that it’s the historic cheapness of energy that has profoundly shaped Western standards of living over the past hundred-plus years.

Here, then, is the $64-trillion-dollar question:

What consequences unfold if the price of energy rises high enough that no one sees energy as a commodity that they can afford to waste?

You tell me.

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(Vacuum tube photo by Marcin Wichary. Oil rig photo by jurvetson — yes, that Jurvetson.)

If you have access to Bloomberg TV, you can see me talking about the IPO market around 9:40 Central time this morning. I’ll be drawing heavily from the Hoover’s IPO Scorecard we issued last week.

Wish me luck!

UPDATE, after the fact: The spot went pretty well, I thought, although it seems that I’m much more bearish on prospects for the IPO market than Monica Bertran is.

Haven’t been able to find online video of the spot so far, but I’ll post it if I do.

A little while back I quoted Michael Bloomberg on how he built his eponymous business:

“We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version #5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.”

Are you a victim of planning how to plan for months on end? Years, maybe? (Or even your whole career so far? Be honest with yourself.) A friend of mine has called this “scenario paralysis” — the trap we fall into when we imagine all kinds of possible future scenarios . . . and thereby get stuck.

Why do we get stuck? I think it’s because we’re sooooooo freakin’ smart that we imagine that we can look into the future accurately, even though a backward glance across our lives would tend to disprove that.

We overanalyze because we think our highly-trained rational minds can dig us out of holes that are created by non-rational forces. Or, to put it another way, we don’t know how to come to grips with the emotional challenges we face in business, so we fall back on something we know we’re good at — rational analysis — even though it’s not the right tool for the problem at hand.

What’s the #1 non-rational/emotional force? My bet’s on plain old fear.

We don’t want to venture into the unknown; we don’t want to go through the sorts of mistakes that Bloomberg’s crew made. It’s a heck of a lot more comfortable to do another flowchart or hold another planning meeting instead, especially if you work in a corporate culture that responds poorly to mistakes or otherwise prizes “rightness.”

Now, dear readers, I turn it over to you:

• Do you suffer from scenario paralysis?
• What do you suggest for fighting it?

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(Image by psd.)

. . . as I clean up the categories on this blog. (You can see the over-long list of them in the sidebar.)

My goals are (1) fewer, simpler categories that address specific industries; and (2) better, more accurate categories to contain the (many) posts here on broader issues that affect the business world and our individual working lives.

We also had some tech problem over the past two days that kept me from making new posts, but I think they’ve all been resolved.

Your suggestions or comments on these things — as on everything else! — are welcome.

A while back I talked about “deliberate practice” in the context of Will Smith’s career. Psychologist Anders Ericsson has been a pioneer in codifying deliberate practice and what it means.

In a nutshell, deliberate practice is the sort of self-sharpening work done by the very best practitioners in a field. It’s the sort of always-getting-better discipline shared by the best athletic performers (think Tiger Woods), the best musicians (think Yo-Yo Ma), or the best . . . well, the best anything, potentially.

While I was first introduced to the concept by a Geoff Colvin article in Fortune magazine, I think we’ve barely, barely tapped the potential of this idea for changing the way we think of our individual performances in the working world. It’s an idea I plan to return to in future posts.

This post, meanwhile, is one of those publish-it-now, keep-adding-later numbers: I’m going to use it for collecting links to interesting items on deliberate practice. Here’s my list as it stands now:

• [PDF link!] Anders Ericsson et al.: “The Role of Deliberate Practice in the Acquisition of Expert Performance” — This is the article that started it all. (A summary of the article is available here.)
• Geoff Colvin in Fortune magazine: What it takes to be great
• Freakonomics authors Stephen Dubner and Steven Levitt: A Star Is Made: The Birth-Month Soccer Anomaly
• WiseBread: How to become an expert
• The Practice of Leadership: Passion and deliberate practice results in great leadership
• Daniel Goleman: Peak Performance: Why Records Fall
• Expert Performance and Deliberate Practice: An updated excerpt from Ericsson (2000)
• The Age (of Australia): E=mc2 (and a lot of hard work)
• The Sydney Morning Herald: Why only the right kind of practice gets anywhere near perfect
• On his blog, Jason Kottke has a category dedicated to deliberate practice.
• Time Magazine: The Science of Experience (I have to say that I thought the application of deliberate practice to Clinton, McCain, and Obama was strained. But some other parts were good.)
• The Simple Dollar blog: Deliberate Practice and Personal Finance (Good, straightforward application that reaches beyond finance.)
• ImprovedLives: How to be an Expert at Anything - Stu describes how the work of Ericsson and his colleagues has motivated him in setting huge goals.
• [Added 8/26/08] Half Full: Science for Raising Happy Kids: The Science of Success
• . . .

That dot-dot-dot is for YOU. If you know of other articles that might make a good addition to this list, please note them in the comments.

American has the right idea by posting YouTube videos like this one.*

Direct outreach — especially when used to accept blame — can help the company restore its image after this week’s debacle, when thousands of flights have been canceled because American Airlines planes didn’t meet F.A.A. standards.

But American chief Gerard Arpey and his lieutenants have a chance to make their outreach even better by the low-tech means of clarifying their language.

Hoover’s has always rejected jargon in its profiles. Indeed, you could say it’s our stock in trade. Corporate executives like Arpey would be better off if they did the same thing.

In the YouTube clip of his press conference, Read more

The subprime mortgage meltdown was already going strong when we started this blog a year ago, yet we continue to hear a drumbeat of worse and worse economic news every day.

Here’s a simple question for the audience, then:

• Who’s to blame for the current mess the U.S. economy is in?

I’m open to suggestions — please leave yours in the comments below.

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(Image: via the Virginia Land Rights Coalition, a famous Thomas Nast cartoon depicting the Tammany Hall ring.)

It was the best of times (for Visa) and the worst of times (for the IPO market as a whole). Get all the details from our IPO Scorecard. Be sure to check out the different summaries, too:

• Best/Worst Returns
• Biggest First Days
• Happy CEOs
• Money Left on the Table

Feel free to comment on individual IPOs, the Scorecard, or the market as a whole (hole?) here.

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(Photo by jhritz.)

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Welcome to the April edition of the Hoover’s Index. The Hoover’s Index provides insight on which companies are being watched most closely by the sales, marketing, and business development professionals who make up a large part of Hoover’s audience. Each month, I offer comments on some of the most interesting stories and trends turned up by the unique ranking system of the Hoover’s Index.

VISA
Visa isn’t just “everywhere you want to be” — it saved the IPO market during the first quarter of 2008 when it posted the largest IPO in history. In the midst of tumultuous economic times, the credit-card giant debuted on the Big Board with an offering in the neighborhood of $18 billion. Possibly even more stunning: the company’s shares have climbed even more since the IPO. Unfortunately, Visa’s performance can’t be considered any kind of a bellwether for other companies wanting to do an IPO, simply because there are no potential IPO makers on the horizon who enjoy the brand recognition that Visa does.

Bear Stearns
Even a few weeks ago, supporters the redoubtable Wall Street firm were saying “Bear is doing fine — nothing to worry about.” But after the bank’s abrupt collapse and humiliating lowball buyout deal with JPMorgan, some regulators have now moved onto the stage of “What did Bear know and when did it know it?” The company has become the biggest and worst victim of mortgage-based insecurity in the worldwide securities markets, and its erstwhile leader, Jimmy Cayne, now faces a ignominious (if wealthy) retirement. Perhaps he’ll console himself with more golf and bridge.

The Carlyle Group
So apparently the cabal that rules the world* The Carlyle Group doesn’t walk on water. In March it was forced to fold up the tents of its affiliate Carlyle Capital, which had invested heavily in mortgages. Given current market conditions, even the fact that those mortgages were triple-A-rated didn’t help: the parent company extended a $150 million lifeline of credit to the affiliate, but Carlyle Capital’s creditors began liquidating its assets anyway. The Carlyle Group made its name in no small part because of the super-duper-heavy hitters it employed, including George H. W. Bush, John Major, James Baker, and Frank Carlucci. But public suspicions about the Group’s closed-door deals has led it to remake its management board and create more transparency in its dealings.

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* I kid. Yes, Carlyle has always had lots of ultra-connected ex-politicos in its stable, but I think the rumors of its Svengali-like hold on policy makers in Washington, London, etc. has been wildly overblown. But then, I’m pretty much allergic to conspiracy theories.