Friday Book Review! The Third Wave by Steve Case

Image result for third wave steve caseIf the title of AOL founder Steve Case’s book, The Third Wave, sounds eerily familiar, it is no accident. Case remembers reading futurist Alvin Toffler’s book of the same name in college and wanted to be part of Toffler’s “electronic global village.” And he was. The term AOL seems very oldschool today — and Case explains what happened further in the book — but there was a time when the company he founded, based on the concept of provided services via the Internet, was a pillar of the information age — or more specifically what he calls the “First Wave” of the information age.

The First Wave of the Internet, writes Case, “was about building the infrastructure and foundation for an online world.” It was led by companies such as Cisco, Sprint, HP, Sun Microsystems, Microsoft, Apple, IBM and AOL, who created the hardware, software and networks that connected people to the Internet and to each other. Once everyone was online, the Second Wave kicked in. We are still in this Second Wave, the era of the information age, when companies, Case explains, built “on top” of the Internet. Think Google, eBay, Amazon, Twitter and even the iPhone.

We are, however, on the cusp of a Third Wave of the Internet, writes Case, in which the Internet becomes a “ubiquitous force in the world” connected to everything we do. The Internet will be part and parcel of all the facets of our lives, including our healthcare and education systems, and even what we eat. As Case puts it eloquently, the Third Wave “is the era in which products will require the Internet, even if the Internet doesn’t define them. It is the era when the term “Internet-enabled” will start to sound as ludicrous as the term “electricity-enabled,” as if either were notable differentiators.”

First-Wave Issues Society often advances in linear fashion so that the present era moves forward from the past, and the future moves forward from the present. In some ways, however, the Third Wave represents a return to the world of the First Wave — not in outcomes but in means. In other words, success in the Third Wave will depend in large part on the success factors of the First Wave, including a heavy reliance on collaboration and partnership, careful attention to policy and the courage to scale high barriers to entry. Building the infrastructure in the First Wave was capital-intensive, and the same investment partnerships will be required to redraw a nation’s healthcare system or other components of our society.

The Second Wave was different; it was the era when billion dollar companies could be built by a few tech-savvy friends with a computer and a good idea (example: make it easier to search the Internet). The barriers to entry were low, as were the required upfront investment. There still may be some best-selling apps on the horizon, but good luck launching another Twitter or Facebook from your dorm room. One of the domains in which Third-Wave entrepreneurs must be fluent, Case writes, is in government policy.

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Review: The Founder’s Mentality By Chris Zook and James Allen

Image result for The Founder’s Mentality By Chris Zook and James AllenNew companies are notoriously fragile. Yet, as any company grows, moving past its tumultuous beginnings, it runs into three crises, write veteran Bain consultants Chris Zook and James Allen in their book, The Founder’s Mentality. The first crisis is overload: the company fails to scale its business successfully, succumbing instead to internal dysfunction. The second crisis is stall-out: bureaucracy and organizational complexity sap the energy and agility of the company’s younger days. The third predictable crisis is free fall: saddled with an obsolete business model, the company watches its market share dissipate.

According to the authors’ research, the reason for companies inevitably facing (and often being defeated) by these crises can be traced to the loss of what they call “the founder’s mentality.”

The founder’s mentality consists of three defining traits.

The first is, according to the authors, “the insurgent mission” — the belief that the company is not simply selling products but is at “war” with an industry stuck in the past or underserving customers.

The second defining trait of the founder’s mentality is “the front-line obsession,” which is more than an intense focus on customers and the front-line employees who serve them. Founders tend to obsess about every detail in the customer-company interface.

Finally, the third defining trait is “the owner’s mindset.” When people work for a small company fighting for its survival, they see themselves as owners of the company. They are completely invested in its success.

These founder’s mentality traits give a company its edge and its energy. But over time, as the company grows and becomes more hierarchical and more entrenched, as executives are further and further removed from the front lines, and as a dedicated bunch of committed “owners” becomes a large mass of employees, this edge and energy dissipate.

In order to overcome the inevitable crises that companies will face in their history, they must keep or restore the founder’s mentality.

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The Three-Box Solution by Vijay Govindarajan

Speed Review: The Three-Box SolutionIt’s an age-old problem for business: succeeding today while preparing for the future. One might think that today’s success lays the foundation for the future, but in business such thinking is a guaranteed path to failure. Just ask Kodak. Or Blockbuster. Each dominated their categories only to find themselves in bankruptcy court. While they were winning in the present, they were laying the groundwork for failure. In sum, what you do today to succeed has less relevance on what you’ll need to do tomorrow than you might think.

From Linear to Non-Linear

Hindsight is always 20/20, especially in strategy and innovation. In real-time, however, how to allocate attention and resources to maintain the present while building the future is far from obvious. Enter Vijay Govindarajan, a professor at Tuck School of Business with a number of best-sellers on strategy and innovation to his name. In his new book, The Three-Box Solution, Govindarajan offers a framework, based on three boxes, that is both methodology and mindset for attacking the dual and often conflicting imperatives of succeeding today and preparing to succeed tomorrow.

Box 1, according to Govindarajan, is about managing the present — implementing the strategies, tactics and approaches required to operate at “peak efficiency.”

Box 2 is about forgetting the past — divesting businesses and letting go of practices and assumptions that are becoming obsolete.

Box 3 is about creating the future — developing new business models to ensure long-term success.

Companies must pay attention to all three boxes at once, which means, Govindarajan explains, focusing on both linear and non-linear innovation. Linear innovation is extrapolated from a company’s current activities. Non-linear innovation doesn’t build on current activities but, instead, targets new and old customers with new business models and products. Linear innovation is vital for success in Box 1; non-linear innovation is at the heart of Box 3.

It is perhaps Box 2, however, that holds the key to the entire framework. In order to transition from present to future, Govindarajan explains, you have to deal with the past. Toy- and game-maker Hasbro offers one example of how the three-box solution works. Launched in the 1920s by three brothers, Hasbro was known for its traditional products such as the Monopoly game. Its distribution model was simple: toy stores. With the arrival of the Internet, it’s distribution expanded to the web.

To keep customers coming back for more, Hasbro maintained its Box 1 linear innovations — for example, developing Star Wars-themed versions of its classic Monopoly and Mr. Potato Head.

However, it is Hasbro’s Box 3 non-linear innovations that have positioned the company for long-term success.

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Strategies to Combat Gender Bias

Image result for breaking through biasWomen continue to face unconscious biases in the workplace that undermine their success, according to Andrea Kramer and Alton Harris, authors of the new book Breaking Through Bias. Although written by long-time activists working to break down barriers to women in the workplace, Breaking Through Bias is not an indictment of gender discrimination but, rather, a straightforward guide on how women can achieve success in spite of the discrimination.

For Kramer and Harris, a husband-and-wife team of attorneys, the secret to overcoming the gender bias, deliberate or unconscious, that pervades today’s workplace is to develop an effective communication style through which women can display their competence and experience while neither encouraging nor buying into gender stereotypes. The authors call this attuned gender communication.

The general message of the book, however, is twofold. First, while women are not to blame for gender stereotypes, they sometimes undermine their own efforts to overcome such stereotypes. The second message is that many women do not even attempt to battle stereotypes; instead they buy into them.

For example, a study of men and women who had graduated from an elite international MBA program revealed that women were far less likely to apply for jobs in finance and consulting and far more likely to apply for general management jobs — no doubt because of the unconscious bias of the women that men are better at math or handling the pressure of consulting, while women are better at the soft skills needed to successfully manage people.

The focus of their book, however, is to help women who refuse to buy into the biases but understand that they have a responsibility to help themselves. The challenge of this “help yourself” message is illustrated in the story of a leader that Kramer was coaching remotely. Ellen was constantly passed over for promotions because, according to her superiors, she was a “sloppy thinker.” When Kramer finally met Ellen, she discovered a leader who dressed so casually “it was hard for me to tell if she was wearing her pajamas or a sweat suit.” At Kramer’s suggestions, Ellen started dressing “like a banker” and never heard the “sloppy thinker” comment again.

The story does not end there, however. Kramer recounted Ellen’s experience in a workshop and learned later that many of the women criticized Kramer’s actions. “These women said that I had advised Ellen to be inauthentic and to buy into traditional stereotypes,” Kramer writes. Although disappointed that she had failed to get her message across, Kramer was also sad. “I realized that the women who had criticized me were unlikely to get as far as they wanted to in their own careers if they really thought that a woman would lose her authenticity if she didn’t go to important meetings dressed in her pajamas,” she writes.

The fact of the matter is that impressions count, and indeed, the importance of managing impressions is one of the key lessons in the book. As the authors explain, “…..

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Book Review: Shoe Dog By Phil Knight

Shoe DogNike is one of the world’s most famous brands. Its swoosh, famously created by an art student for just a few dollars, is ubiquitous. Its outsourcing business model is considered genius by some, controversial by others. Everyone knows Nike — or at least we think we do.

Shoe Dog, the story of Nike written by its founder, Phil Knight, offers a new perspective on the brand. Knight tells a surprisingly riveting tale. The book’s chapters are organized by year, and much of the book is spent on the first 10 years of the company (launched in 1962). As with a detective series in which we know the detective will emerge unscathed, the fact that we know the ultimate outcome of this story does not deter from the white-knuckle ride on which Knight expertly takes his readers. Knight is able to convey the fear and frustration of living on the edge that continues year after year, even as his company continues to grow. For example, Knight describes receiving the “pair count” (how many pairs of shoes shipped) from the warehouses every day. Because he depended on daily sales to generate the cash he needed to keep the business, then called Blue Ribbon Sports, alive, “the daily pair count determined my mood, my digestion, my blood pressure, because it largely determined the fate of Blue Ribbon,” he writes. “If we didn’t “sell through,” sell all the shoes in our most recent order, and quickly convert that product into cash, we’d be in big trouble.”

Blue Ribbon Sports may not be familiar to many, but it was the original name of the company that Knight founded in 1962 (the word “Nike” does not appear until nearly 200 pages into the book). Although known today as the king of outsourced manufacturing, Knight’s “Crazy Idea” — the business model he developed as a Stanford MBA student — was to introduce quality Japanese shoes to America, and specifically the Tiger, manufactured by Onitsuka Company (now Asics) in Kobe, Japan. For a number of years, Blue Ribbon Sports, a company that only existed in Knight’s mind when he traveled to Japan and told Onitsuka executives that he was its representative, was happy to be an importer of Japanese shoes — until, as Knight eloquently describes, Onitsuka decided to break its contract and surreptitiously replace BRS as distributor. The cold war battle between Knight and the man who would become his nemesis, an Onitsuka executive named Kitami, is almost worthy of the tense dance between John Le Carre’s George Smiley and the elusive Karla — which explains…(click here to continue reading this review)

Review: Living Forward by Michael Hyatt and Daniel Harkavy

Most people don’t plan their lives, write Michael Hyatt and Daniel Harkavy, authors of Living Forward: A Proven Plan to Stop Drifting and Get the Life You Want. Instead, people drift through the years, going where circumstances take them rather than taking control.

Living Forward offers a game plan for taking control through a tool call a “Life Plan,” which, as the authors explain, will answer three vital questions.

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Whenever you make a plan, you must begin with the destination. Only by knowing where you are going can you figure out how you can best get there. For the authors, the destination of a life is one’s legacy. Thus, the first question a Life Plan answers is

How do I want to be remembered? The best way to identify your desired legacy, according to the authors, is to write your own eulogy. This rather impertinent process forces you to think about what you would like others to say about you at your funeral.

The first step, of course, is to understand who those others will be. Writing your eulogy, the authors explain, begins with identifying all of your key relationships, either by individual name or by group (e.g., my peers in the company). You then describe how you want to be remembered by each group.

Most of us live extremely busy lives. However, the authors note, a busy life is not a sign of success if you are not busy doing the right things: the things that are most important to you. The second question answered by the life plan is about priorities:

What matters most to me? To help readers determine their priorities, the authors offer a tool based on what they call Life Accounts. The term is chosen for its connotation of bank accounts — that is, accounts that either have a growing balance, consistent balance or declining balance. Grouped in three concentric circles around the YOU at the center, the first three Life Accounts — spiritual, intellectual and physical — involve your relationships with yourself. The second concentric circle of three Life Accounts — marital, social and parental — involves your relationships with others. Finally, the outermost concentric circle of three Life Accounts — vocational (your job), avocational (your hobbies) and financial — concerns your output.

These are prototypical Life Accounts, but the authors emphasize that people may have different accounts and even a different number of accounts. Every individual must determine what is most important to them and, thus, create their own Life Accounts. Whatever the specific accounts may be, “the goal is to have a positive balance in each of your Life Accounts,” the authors write.

The authors cite two criteria that for them are the essential components of a positive balance in a Life Account…..(click here to continue reading)

 

Review: The End of Average by Todd Rose

Drivers can adjust car seats in three different ways: they can push the entire seat up or back; they can move the bottom of the seat lower or higher; and they can tilt the back of the seat forward or backwards. These adjustments allow the car seat to be adjusted to the specific requirements of the individual driver. At first glance, this adjustment feature does not sound particularly revolutionary. And yet, as Todd Rose explains in his brilliant new book, The End of Average, adjustable seating is a rejection of one of the defining characteristics of our society: the dictatorship of the average.

Grade-point averages, standardized tests, performance approval ratings, whether you’re considered overweight or underweight — all sorts of measures are based on the idea that there is an average, and you are measured and judged based on how far you deviate from that average.

In the opening section of his book, Rose tells the story of how we became the age of average. It all began with a young Belgian social scientist named Adolphe Quetelet (pronounced “Kettle-Lay”), who applied the astronomy method of measuring averages to people, declaring that average represented perfection, while deviations from the average were errors. While “average” no longer denotes perfection, it does denote, writes Rose, “a prototypical representation of a group — a type.” Another social scientist, Englishman Francis Galton, built on Quetelet’s work to develop the concept of ranking (above average becomes a desirable status, not a deviation from perfection). Frederick W. Taylor used averages to develop the concept of standardization for the workplace. Education reformer Edward Thorndike adapted Taylor’s workplace standardization and applied it to the classroom.

And thus the age of average took over. The one exception was a 23-year-old scientist in the 1950s who convinced the United States Air Force that planes with average-sized cockpits were contributing to the hike in crashes. His suggestion: adjustable cockpits. (To him we owe a car’s adjustable seats.) How did young Gilbert Daniels convince the Air Force to develop cockpits that could be individually sized? He compared the 10 different measurements used in the average cockpit to the measurements of more than 4,000 pilots.

The result: Not a single pilot was of average size on all the measures (in spite of Daniels providing a range of sizes for each measure). The average-sized cockpit fit nobody. The bottom line is that averages can help us understand groups of people (French vs. British fighter pilots) but will not help us understand individuals. Daniels offers an alternative to understanding individuals, what he calls the Three Principles of Individualism.

The first is the jaggedness principle….

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Peak by Anders Ericsson and Robert Pool

Speed Review: PeakAnders Ericsson, co-author of the new book Peak: Secrets from the New Science of Expertise, has spent a lifetime studying what it takes to become an expert. His work was cited in the best-selling book Outliers by Malcolm Gladwell, who used Ericsson’s research on expert violinists as the basis for his “10,000-hour rule.”

According to this rule, if you practice for 10,000 hours, you will become an expert. Gladwell’s rule is an oversimplification of his research, Ericsson argues, although Gladwell does get the general concept correctly: To become an expert, it takes a huge number of hours of practice.

At first glance, this rather unsurprising assertion hides a deeper and more controversial implication: No one is born with vastly superior talent. Just to be clear, Ericsson launches his book with the poster child for innate superior talent: Mozart. As everyone knows, Mozart was a musical genius — both as a performer and a composer — at an age when most children were focused on playing with their tiny (lead, at that time) toy soldiers.

While not discounting the talent of young Mozart, Ericsson and his co-author, science writer Robert Pool, argue in Peak that Mozart would not have been Mozart had he been born the son of a cobbler. Thankfully, for the world, Mozart was born the son of a musician, whose apartment was filled with all kinds of musical instruments — all of which Mozart learned to play beginning at the age of four. Mozart, it turns out, practiced for thousands of hours just like the other experts in Ericsson’s book.

Of course, not all practicing is equal. Ericsson identifies three different types of practicing. The most basic type of practicing is naïve practice, the generic rather mediocre practicing that children muddle through as they go from piano lesson to piano lesson. They will not become star performers, nor do they intend to.

A much more effective type of practice is what Ericsson calls purposeful practice. Purposeful practice is ….

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Review: Never Split the Difference by Chris Voss

NeverSplitTheDifference_LgNever Split the Difference by Chris Voss

Never Split the Difference, a new book on negotiation, presents an alternative to Getting to Yes, the classic text by Roger Fisher and William Ury of Harvard. For author Chris Voss, the use of rational tools and techniques is not the most effective approach for negotiations. Instead, the key to success, especially in very dangerous negotiations, is tactical empathy, which he describes as “emotional intelligence on steroids.”

As reflected in the title of his book, Voss, the former lead international kidnapping negotiator for the FBI, did not develop his theories on negotiation in the halls of academia. An education that began as a beat cop on the mean streets of Kansas City continued as he joined the FBI and eventually traveled the world as the agency’s chief negotiator in the most dangerous situations. Somewhat surprisingly, one of the most valuable lessons he learned was not in a jungle negotiating with ruthless terrorists, but in the streets of Pittsburgh.

A drug dealer had kidnapped the girlfriend of another drug dealer. As Voss listened to the tapes of the two drug dealers talking, he heard the aggrieved dealer ask the kidnapper, “Hey, dog, how do I know she’s alright?” The kidnapper paused and then said, “Well, I’ll put her on the phone.”

Already an experienced negotiator, Voss recognized the power of that question. It was the prototype of what he would eventually call the “calibrated question,” a highly impactful tool because it gives the other side a sense of control even if they are doing what you want them to do. If the drug dealer had said, “Put her on the phone!” the other dealer would either have refused — because he didn’t want be controlled — or demanded
something in return. When responding to the question, “How do I know she’s alright,” the kidnapper feels in control because he is making the decision to put the hostage on the phone.

Calibrated questions reflect the philosophy of emotional intelligence on steroids. Never Split the Difference is filled with compelling, often harrowing stories that further illustrate the empathy-based techniques and approaches that Voss advocates.

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Developing Everyone in the Company: An Everyone Culture by Robert Kegan and Lisa Laskow Lahey

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An Everyone Culture

The culture of Next Jump, an e-commerce tech company, is summarized in a catchy phrase: Better Me + Better You = Better Us. In other words, if I grow, develop and become more successful, and if I help you grow, develop and become more successful, then the entire organization becomes more successful (i.e., more profitable). Next Jump put some real weight behind the words through the structure of its compensation, which is 50/50: 50 percent of your pay depends on how you impacted revenues, and 50 percent depends on how you implemented the Better Me + Better You = Better Us culture.

Next Jump is one of three companies whose practices and philosophies are at the heart of An Everyone Culture by Robert Kegan and Lisa Laskow Lahey. (The other two featured companies are hedge fund Bridgewater Associates and movie theater conglomerate Decurion Corporation.) Kegan and Lahey call these companies Deliberately Developmental Organizations (DDOs). The core philosophy of a DDO is that a company’s success depends on everyone in the company having an opportunity to grow. For a DDO, development is not one of the features of the company. Deliberate development is the engine that drives the company forward, as vital and irreplaceable as the engine of an automobile.

There is no dearth of volumes describing the importance of putting your people first. And having presented its argument that developing people is the single most important function of a business, An Everyone Culture could easily tumble into a series of intuitive but motivating howto’s, which would probably include a chapter on listening with empathy. However, Kegan and Lahey are scientists, and building on their research on adult development, they have created a robust model for organization-wide development that incorporates three dimensions:

Aspiration. DDOs have a culture that relentlessly pushes people to grow, not only as employees but also as people. The authors call this the edge.

Communities. People must not only want to grow but must be enabled to grow, and that requires safe, trustworthy communities. The authors call this home.

Practices. The final dimension incorporates the actual development practices and routines of the organization. The authors call this the groove. Implementing these three dimensions requires a series of “discontinuous departures” — principles, practices and structures that represent a true departure from business as usual. A total of 12 discontinuous departures animate the DDO framework.

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