So, we watched video clips of Steve Jobs speak a couple of times in class. There were two clips, the first was him unveiling the iPhone (http://www.youtube.com/watch?v=PZoPdBh8KUs),
Then we watched him at an earlier shareholders' meeting (http://www.youtube.com/watch?v=ckLdxZ-QcO0).
I did not like the first video. I found Steve Jobs' constant teasing really annoying, to say nothing of the repetition. We get it, Steve. It's an iPod, a phone, and an Internet communicator. We got that the first time around. You don't have to say it over and over as if it was some kind of incantation for a summoning ritual. It just wasn't a good presentation overall, and I felt he got away with it only because he's Steve Jobs and is therefore allowed to flout conventions, just like no one criticizes Picasso if he makes a bad drawing.
Jobs was far more persuasive 20 years ago, in the second video. He came off as quite energetic and pumped about the product. The only that really hurt the presentation is that he was reading off his paper, but it was a really long speech, so we'll overlook that. Something else I would like to point out - he is introducing a new printer that was cutting edge technology for the time. Now, when explaining technology, it's incredibly easy to start off comprehensible enough, only to jump off the slippery slope of comprehension and end up spewing a verbose, jargon-laden mess. Yet, Jobs speaks in a manner that a layman could understand everything he was saying.
So, closing remarks? When speaking, be the 1980s Steve Jobs. Not the 2000s Steve Jobs.
Monday, November 3, 2008
Sun Tzu's Art of War, as Applied to Business
So, the previous blog post mentioned Sun Tzu.
Who was Sun Tzu? He was a Chinese strategist who lived in the 6th century, BC. He wrote a book called The Art of War, considered to be pretty much THE definitive treatise on strategic thinking. It is on the reading lists of more than one military academy, but recently leaders in other fields such as sports and business are drawing inspiration from it as well.
Here are some of the things Sun Tzu said:
"Know yourself, know the enemy; a hundred battles, a hundred victories."
Which is followed by "know yourself but not the enemy; fifty victories, fifty defeats" and "know neither yourself nor the enemy; a hundred battles, a hundred defeats." Of course, in business it is often impossible to know everything about one's competitors - at least, not without crossing certain legal and ethical lines. However, it is also important to know yourself. What exactly are you selling? A lower price? Higher quality for higher price? Comparable quality but better service for a higher price? An example of this is Wendy's - Wendy's entered the fast-food game rather late, and most of the good locations were already taken by McDonalds. So Wendy's just rolled with it. Instead of competing as another McDonalds, decided that they were going to be the "Anti-McDonalds," the alternative for people who want to try something different. Any time you see a Wendy's, there's a good chance that there's a Mickey D's close by.
"Fighting and winning a hundred battles is not the acme of skill. Winning a hundred battles without fighting is the acme of skill."
Things don't necessarily have to be win-lose. Strive for win-win, if at all possible. Rather than driving out a rival through a price-war, better to simply arrive at an understanding so that both parties are able to stay in business and earn reasonable amounts of money. Not to mention that in the business world, if you really do "win a hundred battles," people may begin raising accusations of "monopoly." Chinese companies try to do this, which has the additional bonus of maintaining harmonious relationships with competitors.
"If your enemy is secure, prepare for him. If he is strong, evade him. If he is easily angered, irritate him. Pretend to be weak, so that he may grow arrogant...attack when he is unprepared, appear when you are unexpected."
I would argue that Apple's somewhat recent rise is a great example of this. I had vague recollections of using a Mac in the early years of elementary school, then everyone seemed to have switched to Windows. Then Apple suddenly pops out with an iPod and all these other cool gagdets and blew everyone's mind, earning them a nice chunk of change in the process. This was also an example of the first quote, as Apple did the research and understood that they could not beat Microsoft on functionality - Microsoft had become so established that even if Apple was better, the switch between operating systems would still be too costly. Instead, Apple went after the younger crowd, people who didn't just want technology that worked, but technology that looked cool.
Sun Tzu was also a big fan of using spies. While certainly useful, the ethicality of doing so in the business world is a little sketchy, to say the least. At any rate, I shall conclude this blog post now.
Time to read my Sun Tzu again.
Who was Sun Tzu? He was a Chinese strategist who lived in the 6th century, BC. He wrote a book called The Art of War, considered to be pretty much THE definitive treatise on strategic thinking. It is on the reading lists of more than one military academy, but recently leaders in other fields such as sports and business are drawing inspiration from it as well.
Here are some of the things Sun Tzu said:
"Know yourself, know the enemy; a hundred battles, a hundred victories."
Which is followed by "know yourself but not the enemy; fifty victories, fifty defeats" and "know neither yourself nor the enemy; a hundred battles, a hundred defeats." Of course, in business it is often impossible to know everything about one's competitors - at least, not without crossing certain legal and ethical lines. However, it is also important to know yourself. What exactly are you selling? A lower price? Higher quality for higher price? Comparable quality but better service for a higher price? An example of this is Wendy's - Wendy's entered the fast-food game rather late, and most of the good locations were already taken by McDonalds. So Wendy's just rolled with it. Instead of competing as another McDonalds, decided that they were going to be the "Anti-McDonalds," the alternative for people who want to try something different. Any time you see a Wendy's, there's a good chance that there's a Mickey D's close by.
"Fighting and winning a hundred battles is not the acme of skill. Winning a hundred battles without fighting is the acme of skill."
Things don't necessarily have to be win-lose. Strive for win-win, if at all possible. Rather than driving out a rival through a price-war, better to simply arrive at an understanding so that both parties are able to stay in business and earn reasonable amounts of money. Not to mention that in the business world, if you really do "win a hundred battles," people may begin raising accusations of "monopoly." Chinese companies try to do this, which has the additional bonus of maintaining harmonious relationships with competitors.
"If your enemy is secure, prepare for him. If he is strong, evade him. If he is easily angered, irritate him. Pretend to be weak, so that he may grow arrogant...attack when he is unprepared, appear when you are unexpected."
I would argue that Apple's somewhat recent rise is a great example of this. I had vague recollections of using a Mac in the early years of elementary school, then everyone seemed to have switched to Windows. Then Apple suddenly pops out with an iPod and all these other cool gagdets and blew everyone's mind, earning them a nice chunk of change in the process. This was also an example of the first quote, as Apple did the research and understood that they could not beat Microsoft on functionality - Microsoft had become so established that even if Apple was better, the switch between operating systems would still be too costly. Instead, Apple went after the younger crowd, people who didn't just want technology that worked, but technology that looked cool.
Sun Tzu was also a big fan of using spies. While certainly useful, the ethicality of doing so in the business world is a little sketchy, to say the least. At any rate, I shall conclude this blog post now.
Time to read my Sun Tzu again.
How Do Start Business?
http://money.cnn.com/2008/10/31/smallbusiness/entrepreneurial_myths.fsb/index.htm?postversion=2008110306
I found this article pretty insightful on the important aspects of starting a business.
I agree wholeheartedly that starting a business because "you don't want to have a boss" is a bad reason to start a business. Everyone is accountable to someone else - even Bill Gates is not immune to the power of the customer demand. We all love the story of the maverick who did things his own way and came out ahead, but we conveniently forget the rather high failure-to-success ration of such stories. And really, there's nothing wrong with working for a big corporation. Objectively speaking, they really are far more efficient and competitive than most start-up companies are going to be.
I also liked their take on how a start-up can compete successfully against established rivals. Instead of trying to compete on price, find something that you do better (or at least differently), and milk that for all it's worth. As Sun Tzu said, "If fighting is sure to result in victory, then you fight. If fighting is not sure to result in victory, then you must not fight."
Speaking of Sun Tzu, there will be an upcoming post about him.
I found this article pretty insightful on the important aspects of starting a business.
I agree wholeheartedly that starting a business because "you don't want to have a boss" is a bad reason to start a business. Everyone is accountable to someone else - even Bill Gates is not immune to the power of the customer demand. We all love the story of the maverick who did things his own way and came out ahead, but we conveniently forget the rather high failure-to-success ration of such stories. And really, there's nothing wrong with working for a big corporation. Objectively speaking, they really are far more efficient and competitive than most start-up companies are going to be.
I also liked their take on how a start-up can compete successfully against established rivals. Instead of trying to compete on price, find something that you do better (or at least differently), and milk that for all it's worth. As Sun Tzu said, "If fighting is sure to result in victory, then you fight. If fighting is not sure to result in victory, then you must not fight."
Speaking of Sun Tzu, there will be an upcoming post about him.
Sunday, November 2, 2008
Rabbits: A Management Parable, Part II
The book mentioned in my previous post also had another parable, this one featuring a clan of rabbits that lived in a forest and was led by an Alpha. Each day, all the rabbits would go out and look for food. At the end of the day, the food gathered would be divided equally among all, and for a while, everything was good.
However, one day, Alpha noticed that food input was dropping. After thorough investigation, he found that this decrease was all due to a small group of rabbits slacking off. Something must be done, for the laziness was spreading. The root of the problem was that there was no reward for harder work. “What’s the point of working harder if we get the same amount anyways?” So KR implemented a new policy. Whoever works hard will get an additional carrot to his ration.
Binky the bunny was the first to receive the carrot. The rest of the rabbit clan went nuts. Several elders demanded an explanation as to why he and not they got the reward. “Binky has worked hard and behaved well," Alpha explained. "If you show evidence of good behavior, you can also earn carrots.”
Alpha thought this would motivate the clan to greater productivity, but it had the opposite effect. Every rabbit attempted to display “good behavior” in front of Alpha. Thus, more often than not rewards were given to those who were good at stealing the spotlight. Morale dropped rapidly, for those who worked but were not seen working felt they were not being rewarded for their efforts. After a while, Alpha saw that this wasn’t working. So he implemented a new policy: the more food one brings in, the more food one gets.
This was good for a while. But afterwards, there was less and less food, due to excessive collecting having depleted the rabbits’ local food supply. So Alpha had to think about a new policy again. One day, Binky broke his foot while looking for food, so his friend Bob donated half his portion to Binky’s total. KR heard about this and was happy, and when he met Bob he immediately gave Bob two carrots.
This opened up another can of worms. The Spotlight-Stealing Game began anew. Not only that, but Alpha was constantly besieged by complaints such as “I worked harder than that guy, so how come he got more than me?” and “I got twice as much the last time I brought in this amount!” Finally tired of all the complaining, Alpha implemented a new policy: those who are willing to work hard will immediately receive a basket of carrots. Lots of rabbits signed up. Alpha was finally happy.
One problem: once the rabbits received their carrots, they began slacking off again. When questioned, they replied, “We already got the carrots, so what’s the point in working?”
Moral: Rewards can be a great motivator, but it must be made clear just what exactly one is rewarding, otherwise you're not rewarding productivity, but how well someone can show off. Also, one cannot arbitrarily give out rewards. Failure to award wisely leads to a situation where even big rewards do not work.
However, one day, Alpha noticed that food input was dropping. After thorough investigation, he found that this decrease was all due to a small group of rabbits slacking off. Something must be done, for the laziness was spreading. The root of the problem was that there was no reward for harder work. “What’s the point of working harder if we get the same amount anyways?” So KR implemented a new policy. Whoever works hard will get an additional carrot to his ration.
Binky the bunny was the first to receive the carrot. The rest of the rabbit clan went nuts. Several elders demanded an explanation as to why he and not they got the reward. “Binky has worked hard and behaved well," Alpha explained. "If you show evidence of good behavior, you can also earn carrots.”
Alpha thought this would motivate the clan to greater productivity, but it had the opposite effect. Every rabbit attempted to display “good behavior” in front of Alpha. Thus, more often than not rewards were given to those who were good at stealing the spotlight. Morale dropped rapidly, for those who worked but were not seen working felt they were not being rewarded for their efforts. After a while, Alpha saw that this wasn’t working. So he implemented a new policy: the more food one brings in, the more food one gets.
This was good for a while. But afterwards, there was less and less food, due to excessive collecting having depleted the rabbits’ local food supply. So Alpha had to think about a new policy again. One day, Binky broke his foot while looking for food, so his friend Bob donated half his portion to Binky’s total. KR heard about this and was happy, and when he met Bob he immediately gave Bob two carrots.
This opened up another can of worms. The Spotlight-Stealing Game began anew. Not only that, but Alpha was constantly besieged by complaints such as “I worked harder than that guy, so how come he got more than me?” and “I got twice as much the last time I brought in this amount!” Finally tired of all the complaining, Alpha implemented a new policy: those who are willing to work hard will immediately receive a basket of carrots. Lots of rabbits signed up. Alpha was finally happy.
One problem: once the rabbits received their carrots, they began slacking off again. When questioned, they replied, “We already got the carrots, so what’s the point in working?”
Moral: Rewards can be a great motivator, but it must be made clear just what exactly one is rewarding, otherwise you're not rewarding productivity, but how well someone can show off. Also, one cannot arbitrarily give out rewards. Failure to award wisely leads to a situation where even big rewards do not work.
Hunting Dogs: A Management Parable
The original source for this comes from a Chinese book I have called "Shui Zhu San Guo". I felt it was interesting, and took the liberty of translating it.
There once was a hunter who had a hunting dog. Every day the hunting dog would go out and catch rabbits for the hunter. One day, the hunter was visiting his shepherd friend, and the hunting dog struck up a conversation with his sheepdog. The sheepdog asked, “You’re so big and strong, why can’t you catch a little rabbit?” The hunting dog replied, “It's a matter of motivation: I’m running for my dinner, he’s running for his life.” The hunter heard their conversation and was inspired.
One day, he went to market and came back with several other dogs. He gathered them together and announced a new policy: the amount of dog food each dog receives shall be directly related to the number of rabbits each dog turns in. If a dog does not return with any rabbits, he will not receive any food. Thus each dog tried his utmost to bring in rabbits, since no one wanted to be staring at an empty plate while everyone else was digging in. For a while, all was good.
However, the hunter noticed that he was getting an abnormally high percentage of older, weaker, or sick rabbits, so he called a meeting. One dog brought up the grievance. “We get the same reward regardless of quality, so why spend the effort catching a big rabbit when we can easily catch a weak one?” The hunter nodded in agreement and implemented a new policy. After a set period of time, if the total weight in rabbits brought in by each dog is greater than or equal to a certain amount, then for the next period of time the dog may receive a large ration of dog food. For a while, all was good.
However, the hunter later noticed another drop in rabbit input, and this time the more experienced the dog, the lower its input. So he called another meeting. His original dog brought up the grievance. “Master, we work and toil for you loyally and receive dog food. However, we’ll eventually get old. What happens when the strength of our muscles leave us?” The hunter nodded in agreement and implemented a new policy. In addition to the weekly ration, there will also be a sum total record of all the rabbits ever caught. If the sum total weight in rabbits brought in by a dog exceeds a certain amount, than that dog shall forever be entitled to the normal ration. Also, excess weight shall result in larger portions. So the dogs worked hard again, and eventually several dogs attained the target sum total and lived happily ever after.
Eventually, some of the dogs caught on. “We work so hard catching these rabbits, but we switch them for dog food. However, the rabbits we turn in are actually worth more than what the hunter gives us.” Thus, they left the hunters to catch rabbits for themselves.
Moral: There are actually 5 morals. 1) Your subordinates must be motivated (running for dinner vs. running for life). 2) Don’t rely on only one good subordinate to do the job (buying multiple dogs). 3) There must not be any ambiguity in what you want to reward. If you want to reward hard work, don’t base it on hours in the office; instead, base it on how quickly and how well they do the job (number of rabbits vs. total weight). 4) Make sure your subordinates know you care about them and will care for them even if they can’t work for you and give them incentive to go above and beyond (“retirement pension, overtime pay”). 5) Give your subordinates important things to do. Make them feel that they’re putting in their time for something worthwhile. That way, you won’t have subordinates leaving you to do things for themselves.
There once was a hunter who had a hunting dog. Every day the hunting dog would go out and catch rabbits for the hunter. One day, the hunter was visiting his shepherd friend, and the hunting dog struck up a conversation with his sheepdog. The sheepdog asked, “You’re so big and strong, why can’t you catch a little rabbit?” The hunting dog replied, “It's a matter of motivation: I’m running for my dinner, he’s running for his life.” The hunter heard their conversation and was inspired.
One day, he went to market and came back with several other dogs. He gathered them together and announced a new policy: the amount of dog food each dog receives shall be directly related to the number of rabbits each dog turns in. If a dog does not return with any rabbits, he will not receive any food. Thus each dog tried his utmost to bring in rabbits, since no one wanted to be staring at an empty plate while everyone else was digging in. For a while, all was good.
However, the hunter noticed that he was getting an abnormally high percentage of older, weaker, or sick rabbits, so he called a meeting. One dog brought up the grievance. “We get the same reward regardless of quality, so why spend the effort catching a big rabbit when we can easily catch a weak one?” The hunter nodded in agreement and implemented a new policy. After a set period of time, if the total weight in rabbits brought in by each dog is greater than or equal to a certain amount, then for the next period of time the dog may receive a large ration of dog food. For a while, all was good.
However, the hunter later noticed another drop in rabbit input, and this time the more experienced the dog, the lower its input. So he called another meeting. His original dog brought up the grievance. “Master, we work and toil for you loyally and receive dog food. However, we’ll eventually get old. What happens when the strength of our muscles leave us?” The hunter nodded in agreement and implemented a new policy. In addition to the weekly ration, there will also be a sum total record of all the rabbits ever caught. If the sum total weight in rabbits brought in by a dog exceeds a certain amount, than that dog shall forever be entitled to the normal ration. Also, excess weight shall result in larger portions. So the dogs worked hard again, and eventually several dogs attained the target sum total and lived happily ever after.
Eventually, some of the dogs caught on. “We work so hard catching these rabbits, but we switch them for dog food. However, the rabbits we turn in are actually worth more than what the hunter gives us.” Thus, they left the hunters to catch rabbits for themselves.
Moral: There are actually 5 morals. 1) Your subordinates must be motivated (running for dinner vs. running for life). 2) Don’t rely on only one good subordinate to do the job (buying multiple dogs). 3) There must not be any ambiguity in what you want to reward. If you want to reward hard work, don’t base it on hours in the office; instead, base it on how quickly and how well they do the job (number of rabbits vs. total weight). 4) Make sure your subordinates know you care about them and will care for them even if they can’t work for you and give them incentive to go above and beyond (“retirement pension, overtime pay”). 5) Give your subordinates important things to do. Make them feel that they’re putting in their time for something worthwhile. That way, you won’t have subordinates leaving you to do things for themselves.
Goldman Sachs and Public Idiocy
http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html
A bailout is "Rewards for failure"?
Suppose the government did not do anything. People see banks close. Their money is disappearing. What are they going to do? They're going to withdraw the rest of their money, and they're going to be hoarding what they do have. Problem is, banks can't function if people aren't putting their money in them. And economies can't function if people aren't injecting money into it. Last time this happened, it was that happy joyful occasion known as the Great Depression.
This is why government bailout is necessary. The people need to have confidence in the economy. They need to know that their banks aren't going to collapse, leaving them penniless hoboes. The banks, in turn, need to be spending the money that the government gives them. Money does no good for the economy if everyone hoards it - it must be used so that goods and services are flowing as normal.
And this is why I don't like the vast majority of critics. Too much complaining, not enough ideas on how to make things better.
A bailout is "Rewards for failure"?
Suppose the government did not do anything. People see banks close. Their money is disappearing. What are they going to do? They're going to withdraw the rest of their money, and they're going to be hoarding what they do have. Problem is, banks can't function if people aren't putting their money in them. And economies can't function if people aren't injecting money into it. Last time this happened, it was that happy joyful occasion known as the Great Depression.
This is why government bailout is necessary. The people need to have confidence in the economy. They need to know that their banks aren't going to collapse, leaving them penniless hoboes. The banks, in turn, need to be spending the money that the government gives them. Money does no good for the economy if everyone hoards it - it must be used so that goods and services are flowing as normal.
And this is why I don't like the vast majority of critics. Too much complaining, not enough ideas on how to make things better.
Wal-Mart's China Adventures
http://www.msnbc.msn.com/id/27241451/
From this story, we can glean several important facts about doing business in China.
1. Chinese people, just like any other people, want low prices and convenient shopping. Stores like Wal-Mart can do well there because it offers both these things at a level no one else can. Also, because it's a foreign brand, it also has an aura of "legitimacy." The average shopper can brag to his friends, "hey, I got my stuff from Wal-Mart. Yeah, that's right, I do my shopping at an American store. Hoo-rah." The ownership of foreign items is a status symbol.
2. Chinese people are not sentimental about Mom-and-Pop shops. If they can't compete, oh well. Maybe they should try to find some other way in which they can be better than Gigantic Corporation. Chinese people are, however, sentimental about Mom-and-Pop themselves. Hence, they will continue to support local vendors, especially if they've known said vendors for a long time and have built up a relationship with them. So get to know your customers. They'll bail you out when times are hard.
3. China is big. You don't have to be an industry leader to make money. The cities where Wal-Mart is expanding may be "small," but they still have "only" a couple million people. In the words of Premier Wen Jiabao, "Any small problem multiplied by 1.3 billion will end up being a very big problem, and a very big aggregate divided by 1.3 billion will come to a very tiny figure." Even if you only have 1% of the market, that's still a lot of profit.
From this story, we can glean several important facts about doing business in China.
1. Chinese people, just like any other people, want low prices and convenient shopping. Stores like Wal-Mart can do well there because it offers both these things at a level no one else can. Also, because it's a foreign brand, it also has an aura of "legitimacy." The average shopper can brag to his friends, "hey, I got my stuff from Wal-Mart. Yeah, that's right, I do my shopping at an American store. Hoo-rah." The ownership of foreign items is a status symbol.
2. Chinese people are not sentimental about Mom-and-Pop shops. If they can't compete, oh well. Maybe they should try to find some other way in which they can be better than Gigantic Corporation. Chinese people are, however, sentimental about Mom-and-Pop themselves. Hence, they will continue to support local vendors, especially if they've known said vendors for a long time and have built up a relationship with them. So get to know your customers. They'll bail you out when times are hard.
3. China is big. You don't have to be an industry leader to make money. The cities where Wal-Mart is expanding may be "small," but they still have "only" a couple million people. In the words of Premier Wen Jiabao, "Any small problem multiplied by 1.3 billion will end up being a very big problem, and a very big aggregate divided by 1.3 billion will come to a very tiny figure." Even if you only have 1% of the market, that's still a lot of profit.
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