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What Kind of Misfit Are You?

Umair Haque

Here is an excerpt from an article written by Umair Haque for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

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Here’s a confession that may surprise no one who regularly reads this blog: I’m a misfit. And I always have been. And having spent a few decades on this planet as a slightly octagonal peg facing an endless vista of square, machine-made holes, I’ve developed a hypothesis about achievement.

It’s this: great accomplishment usually takes the impertinence not to fit into the suffocating status quo. Consider the following. Steve Jobs is a misfit — an unashamedly unbuttoned creative in a role usually reserved for the most robotically droidly of beancounters. Larry and Sergey are misfits. Shigeru Miyamoto, Gordon Ramsay, Jay-Z, JK Rowling, Indra Nooyi, Arianna Huffington? All slightly off-center outsiders — all challengers of the status quo, who’ve never quite fit neatly into its drab, bureaucratically predefined, dumbed-down boxes. Whomever you’d like to add to the list above, of this much I’m virtually certain: they’ll probably be a misfit.

It’s not that every misfit accomplishes something fundamentally unexpectedly awesome (for example, yours truly). And it certainly is the case that misfits have also been some of history’s greatest villains. But it’s also probable that most things unexpected, radical, and breathtakingly awesome take just a little bit of nonconformity; just a little bit of dissatisfaction with “the way things are.” In fact, I’d submit that a deep-seated failure to conform might just be the whirring, glub-glubbing pump hidden inside the finely marbled base of the fount of great achievement.

So here’s my question: what kind of misfit are you?

There are many ways to relax, let go, and let your awkard inner misfit shyly surface. You can be a misfit by simply listening to — and judiciously acting on — your urge to question the (often maddeningly brain-dead) why, who, what, where, when, how of any and every organization, plan, initiative, or idea. In roughly that order: questioning the “why” tends to be significantly more powerful — and warning: dangerous — than questioning the “how.” For example: “Why does Wall Street exist? Is it doing anything socially useful anymore — or is it mostly just a members’ club of rent-seekers in $5,000 suits?” (See how easy that was?)

I’d bet there’s a misfit just itching to be released inside each and every one of us. A heretic whose edges are scraping uncomfortably up against the bars of whichever industrial age institution we’re unlucky enough to be a part of (did I say “be a part of”? Sorry, I meant “have our souls imprisoned in Azkaban by”).

Hence, I’d say: the biggest and most unforgivable crime industrial age institutions commit against our humanity is to deny us the freedom of our own singular humanity. They stifle us at every turn, fitting us into neat boxes, relentlessly and brutally pressuring us — when they’re not pulverizing us — to conform, obey, fit in, toe the party line.

If you accept the heretical proposition that iron-clad conformity is probably history’s surest recipe for suffocating and squandering raw human potential, instead of sending it zooming up to a higher peak, then, here’s a corollary to my tiny hypothesis. If we had more freedom of individualism in organization, we’d have less politics, bureaucracy, jargon, time-wasting, wheel-spinning, and an almost embarrassing level of hubris that would have put Icarus to shame — and veritable monsoons more humility, imagination, creativity, empathy, trust, respect, wisdom. Not merely of the scripted, laughably artificial, absurdly lobotomized pointy-haired consultant-bought variety — as in “Hey, Bob, here’s a great idea: let’s add another blade to this disposable plastic widget of a razor. And then — wait, I know!! Let’s spend a few mil on a different athlete to make it look like testosterone on a spork!! How’s that for creative!!?”. But of the authentic, true, and meaningful kind: ideas and accomplishments that are disruptively world-changing, fundamentally unexpected, radically unimagined.

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To read the complete article, please click here.

Umair Haque is Director of the Havas Media Lab and author of The New Capitalist Manifesto: Building a Disruptively Better Business. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries.

To check out more blog posts by Umair Haque, please click here.

Monday, August 8, 2011 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , , , | 1 Comment

Fail Bigger Cheaper: A Three Word Manifesto

Umair Haque

Here is an excerpt from another thoughtful and thought-provoking  article written by Umair Haque for the Harvard Business Review blog. It is worth noting that Marcus Buckingham recently ranked Umair #1 among his favorite business bloggers. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

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Try this thought experiment: Maybe America’s Great Stagnation isn’t happening because we’re failing — maybe it’s happening because we’re not.

To illustrate, consider the most straightforward example: Wall Street megabanks were propped up and lavishly resurrected, and your grandkids will likely still be paying the price — because they were too big to fail. But if you look closely, you might see those dynamics just about everywhere. Detroit, of course, received a de facto bailout, too, but that’s the tip of the iceberg: when you stop and think about it, the economy’s rife with subsidies, hidden and overt, to largely industrial-age stuff (the McMansions that were subsidized by Fannie and Freddie, the oil that’s subsidized by whomever’s going to clean up the sky should there be anyone left to do so, the McBurgers whose water, beef, and obesity are all loaded not just with calories, but with tons of agro-subsidies). And that’s just the economy. What about the polity — Congress? Rarely have more constituents been more disappointed with their so-called representatives — but the whole lumbering institution’s too entrenched and cronified to fail.

Hence, argue with me if you’d like, throw binders full of rosy forecasts from your favorite think tank straight at my forehead if you want, but I’d gently suggest: America just might be terminally deficient in terms of one of the fundamental drivers of 21st century competitiveness: what I call economies of failure. Just as economies of scale might be loosely said to competitively refer to, roughly speaking, the savings, investment, and ultimately returns that an organization realizes from greater output than its rivals, so
economies of failure are the savings, investment, and returns an organization realizes from intentionally, consciously making greater mistakes than its rivals.

The unforgiving truth is that failure — the ability to fail gracefully, relentlessly, consistently — has never mattered more. In a world where volatility is punching past the outer limits, where global hypercompetition is reaching breakneck speed, where the most talented people won’t settle for humdrum routine and stifling busywork, where the velocity with which the self-organizing people formerly known as “consumers” can deconstruct your latest, greatest yawner of a hit down to the tiniest omission has gone terminal, where investors have their zombified eyes locked on the bottom line but rarely the prize, and last but very definitely not least, in a world where yesterday’s tired, threadbare conceptions and definitions of success are ever less resonant — well, in this world, those who can’t fail are likely to end up a little bit like America: stagnant, stuck, and struggling to redraw the boundaries of prosperity. A system that fails to fail lacks the capacity to evolve — much less to gain resilience, or, above all, wisdom.

Beancounters and bureaucrats, welcome to the 21st century: its time to get lethally serious about failing bigger cheaper. That’s my three-word definition of economies of failure. And the art of failure is being mastered by a new generation of radical innovators. To illustrate, consider the first half of my tiny definition: failing cheaper. It’s something that today’s venturescape is struggling and sweating to master. Silicon Valley’s latest buzzword is the “pivot,” geek-ese for “this isn’t working: let’s change it up.” And to make it happen, they’re learning to shed the red tape, meetings, managers, and memos that made industrial-age business such a dreary, dismal drag. If an ideal organization is a mechanism to attain economies, the venturescape’s luminary thinkers and investors, like Eric Ries and Fred Wilson, are reimagining it not merely for scale, as in “the ability to churn out a trillion of the same mass-produced widgets, at the lowest cost, with zero defects” — but as a lean, streamlined, nimble machine that can fail radically cheaper than ever before.

That’s nice, but it’s not enough. Failing cheaper is just half of the equation: failing bigger is the other. The Valley is learning to minimize the costs of failure — but what about maximizing the benefits? A dog chases his own tail, and so it too often is with those seeking economies of failure. Stripped-down organizations also seem to lose a sense of bigger purpose, of larger destiny — and end up focusing on tiny, me-too features instead. So while failing cheap is crucial, so is failing big: in the process of striving to change the world radically for the better.

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If I had to sum up the challenge, I’d put it like this. A decade into the 21st century, it has never been clearer that not letting yesterday’s institutions, products, services, “business models,” roles, tasks, assumptions, and beliefs fail — that our endemic, systemic failure to fail — is a titanic roadblock standing in the way of a more authentic, enduring prosperity.

The future’s not predicted — it’s created. So create it. Fail bigger cheaper.

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Umair Haque is Director of the Havas Media Lab and author of The New Capitalist Manifesto: Building a Disruptively Better Business. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries. To  check out more blog posts by Umair Haque, please click here.

Friday, July 29, 2011 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , , , , , | Leave a comment

Umair Hague on “a deeper kind of joblessness”

Umair Hague

Here is an excerpt from an article written by Umair Hague for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.

In lieu of a catchy opening line, a hammer-blow of a chart [click here]. The median duration of unemployment is, today, more than double what’s it been at any point in the last half-century, at 6 months and counting. It’s what you might call the dwindling of the American Dream [click here].

Reviving the ghost of the great John Maynard Keynes, economists from Paul Krugman, to Brad DeLong, to Martin Wolf, to Bruce Bartlett, are chalking up a jobless recovery to a lack of aggregate demand [click here]. I’d like to advance a suggestion: it’s not just the quantity of demand that’s problematic — it’s also the quality of demand.

So let’s talk about jobs — how they’re created, and, conversely, how they vanish. Here’s a company that caught my eye this week. Knights Apparel, top supplier of clothing to universities, is pioneering a factory called Alta Gracia where workers earn a living wage — 3.5x the minimum wage, to be precise. In an industry premised on rock-bottom pricing, that’s an awesomely courageous move that rocks the status quo.

So will it succeed? Maybe, maybe not. Here’s the bigger point. Knights is far from the first proponent of higher wages. One of its pioneers? None other than card-carrying communist…Henry Ford. Most know him for making cars, but in fact, he innovated something much bigger than a mere product: the institution of the “job” as we know it today. Not only did this radical innovator institute perhaps one of the first minimum wages, he did it while cutting working hours. Working 40 hours a week for at least a minimum wage? It’s a fixture of American society today.

Surprised? Yet, Ford explicitly said that if he paid his workers above the norm, and gave them more leisure time, not only would he gain greater commitment and dedication, in a industry marked by quick turnover — but, more importantly, he’d also spark more, better demand for novel relatively expensive durable goods, like cars, amongst a still relatively poor middle class.

So one might raise their eyebrows, then, and reasonably wonder whether it’s American preferences that are killing the American dream. If America has changed so much that what Henry Ford thought was eminently practical is now seen as hopelessly naive — well, then perhaps it’s not just bankers, bonuses, and bailouts that are really behind the Great Crash.

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Low quality demand, then, means that we buy cheap, but the price is invisibly steep: it ignites a global race to the bottom, what a complexity economist might call a dynamic equilibrium of negative consumption externalities, consumption that results not just in joblessness but a loss in the quality of jobs. The quality of a job is sparked by higher quality demand; or, valuing more than just the dollar price of a thing, but also its human and social impact.

When we have low-quality demand, we have low-quality jobs. When we value McDonalds, the result is McJobs.

A living wage is a small, halting — and perhaps even thoroughly misguided — step in a great reset of those self-destructive preferences. Yet a step it nonetheless is.

*     *     *
To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.

Umair Haque is Director of the Havas Media Lab. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries.

Monday, August 2, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , , | 1 Comment

Umair Hague on Apple’s “real Achilles Heel”

Umair Hague

Here is an excerpt from an article written by Umair Hague for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.

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Herewith, the second in a series of posts discussing a new agenda for capitalism. To get the most out of it, a gentle suggestion: please read last week’s first [click here], if you haven’t already. Enjoy!!

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So, does your iPhone 4 work? Its antenna issue, some say, including Consumer Reports [click here], points to Apple’s various weaknesses: arrogance, bad PR, poor testing, out of touch management.

So is this a great turning point for Apple? Well, yes and no. Apple does have an Achilles heel. But it’s bigger — and more enduring — than any or all of the above. It’s the second bullet point in what you might call an agenda for 21st century capitalism: building a high-impact organization. Apple’s great weakness is that it isn’t one — yet.

Here’s a suggestion. Apple, when you think about it, is a microcosm of the global economy; a tiny but striking representation of both its strengths and its weaknesses. Apple mass produces “product” (with a smattering of services on top), mega-markets it (across mass media), and sells it in your
local mall, mostly to developed-world “consumers.”

Here are just a few of the downsides: The raw materials Apple uses are toxic to the environment; Apple’s Chinese subcontractors have endured a spate of recent suicides; Apple takes advantage of a questionable Chinese exchange rate regime that effectively exports unemployment to the developed world (and subverts the very notion of “free trade”). And it does all this at a lightspeed pace of “innovation,” which results in spirals of obsolescence; last year’s junk heads, often, to the landfill. Finally, it’s questionable whether Apple’s products, as beautiful as they are, offer meaningful benefits to people. Are they just the technological equivalent of Jimmy Choos, the kind of stuff that underpins the consumption addiction at the heart of the global economic crisis in the first place?

Apple, to its great credit, strives mightily to minimize each and every one of these downsides. Yet, that it must do so is the very point. How different, as a linchpin of the economy, is Apple from the Ford of 1930, the GM of 1950, the P&G of 1980, or the GE of 1990? In economic terms, not so much: all are built on the same set of institutions: mass production, mega-marketing, “profit,” hierarchy, opacity, “innovation.” You know the score — and by now, you might just ask yourself: “isn’t it time to move past the industrial age already?”

The hallmark of a 21st century business is having built a radically more fruitful set of economics, so a company, organization, or country doesn’t have the downsides above in the first place. Hard as it might be, think of an Apple that can create awesome iStuff without a single one of the negative effects above — and then expand that vision to include carmakers, pharmaceutical companies, and banks — and you’re beginning to picture a 21st century economy [click here].

So Apple’s Achilles heel is this: It’s part and parcel of what you might call a global Ponziconomy. That’s one where businesses do better by doing bad. There, companies compete to make some people better off by making others worse off. Like Bernie Madoff’s returns to investors were largely illusory, so the benefits offered by a Ponziconomy are often simply fictional — as we’ve discovered the hard way over the last couple of years or so.

*     *     *

Umair Haque
is Director of the Havas Media Lab. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries.

Saturday, July 17, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , , , , | Leave a comment

Four Economic Benchmarks We Need Now

Umair Hague

Here is an excerpt from article written by Umair Hague for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please visit http://blogs.hbr.org/.

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Should governments accept the dictates of markets? It’s the question raging across the econoverse in the wake of demands for austerity from bondholders.

But it’s the wrong question. The right question is: are organizations and markets making decisions that help make people, communities, and society better off in the long run, by allocating their scarce resources to the most productive uses? The correct role of governance is to shape the decisions of markets, by breathing life into social preferences and expectations. Here’s what I mean by that. Once upon a time, markets “wanted” indentured servitude, debtors prisons, and child labor. But those decisions were unacceptable to society, and so governments took on the challenge of shaping them, reforming markets by preventing them from choosing those options.

The key word is reform. It’s shorthand for “macro institutional innovation” — creating new institutions that govern countries, economies, and regions.

Today, its increasingly clear that markets and companies aren’t making the right decisions — and that without reform, they won’t. Markets have been misallocating resources for decades, minimizing welfare gains. Consider the trillions spent on bailing out banks in just the latest housing bubble, for example. And those are a drop in the bucket compared to how inefficiently markets allocate, say, oil. The eventuality that oil will run out isn’t priced into the market, just the marginal cost of producing the next drop.

What happened? How did our most basic economic tools become so blunted? There’s much hand-wringing amongst macroeconomists about the failures of theory and models. I think the real failure is elsewhere: in real-world innovation. Though economists and management thinkers extolled the virtues of innovation repeatedly, firms were just mastering low-level product, service, and technological innovation. Ironically, it was the most powerful kind of innovation that was left ignored, and so simply stopped happening: institutional innovation.

The first half of the 20th century was a golden age, a period of intense institutional innovation. Simon Kuznets laid down the foundations of GDP. At Bretton Woods, world leaders built a global exchange rate regime. The idea of global governance and justice was formalized in international codes of law and tribunals. The groundwork was dug for new kinds of organizations, like 501c’s, formalized in the 50s.

But the latter half of the 20th century was a relative dark age, a period of institutional disinnovation. The global exchange rate regime laid down at Bretton Woods simply fell apart. GDP, built for a world of factories, consumer goods, and superhighways, was never updated to measure the costs and benefits of a radically interdependent, post-industrial, information-based economy. New kinds of organizations languished, and the idea that the “corporation” was the terminus of organizational evolution became dogma. Therein lies the problem: our economy’s trying desperately to shift past the industrial era, but our macro institutions are a rusting, creaking iron cage, trapping us in it.

Today, new reformers can kickstart radical macro institutional innovation. And It’s not just for policy makers. In the 21st century, governance is no longer just about governments. What’s different, now, is that smart entrepreneurs, investors, and companies can DIY it. Here are four areas where it’s needed most, fastest:

[Here are two.]

New measures of national income. GDP is outdated; inaccurate, invalid, and unreliable. Better measures of national income that count real costs (like pollution) and benefits (like health) are what will shape better behavior from organizations and markets.

Measures of well-being. GDP is a measure of income. What’s missing from that picture? Well-being, of course. More income doesn’t automatically make everyone better off all the time, in the same ways. Without measures of well being to live up to, no better behavior is likely to ever flow from organizations and markets.

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Want to be a radical innovator? Be a reformer. Today’s great challenge is reshaping the macro institutions of the global economy. That is what the transition to the 21st century demands. Right now, what we’ve got is a set of macro institutions left over from the industrial era. They’re obsolete and out of touch. They are what let firms and markets to behave exactly the same way as a century ago. What it means to transition to a post-industrial economy is to have built macro institutions that matter to people — not just machines.
It is the countries, companies, and people that can build them who, I think, will reap tomorrow’s greatest rewards. Why? Because they will be shaping and molding the next tomorrow’s high ground. And there’s no source of advantage greater than that.

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please visit http://blogs.hbr.org/.

Umair Haque is Director of the Havas Media Lab. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries.

Thursday, June 24, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , | Leave a comment

“Why Are 25 Hedge Fund Managers Worth 658,000 teachers?”

Here is an excerpt from article written by Umair Hague for the Harvard Business blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

The Efficient Community Hypothesis

The visionary Stowe Boyd recently kindly invited me to give a talk at his awesome Social Business Edge conference next week. I couldn’t make it, unfortunately — so here’s the talk I was going to give instead. Enjoy!!

“Why Are 25 Hedge Fund Managers Worth 658,000 teachers?” A poignant question that was recently posed to me on Twitter, it makes your head — and your heart — hurt.

The answer has everything to do with the Efficient Market Hypothesis. Last weekend, the world’s most eminent economists gathered at King’s College, Cambridge. Their goal: soul searching — reflecting on not just the economic crisis, but on the crisis in modern economics, of which the EMH is a foundation.

Much maligned, often misunderstood, here, paraphrased, is what the EMH really says.

“The EMH, originally put forth by Eugene Fama of the University of Chicago in the 1960s, states that the prices of securities reflect all known information that impacts their value. No matter what definition is used, the hypothesis does not claim that the market price is always right.”

Italics are mine.

The upshot? Even when markets are efficient, they can still be of little social use, because they can result in dramatic mispricing. The result? Bubble, crash, and collapse: welcome back to 2009, 1989, or 1929.

And that’s where communities come in.

I’d like to advance a hypothesis. Call it the Efficient Community Hypothesis. It says: where efficient markets incorporate “all known information,” efficient communities incorporate “the best known information.” An efficient market is a tool for sorting the largest quantity of info. But an efficient community is a tool for sorting the highest quality info.

On its own, the EMH is simply about informational efficiency: that prices incorporate “all known information.” Where it falls down is in terms of informational productivity: whether prices incorporate accurate, valid, and reliable information — high quality knowledge, instead of low-quality noise. Incorporating all known information doesn’t mean incorporating good information.

The point of communities is, when you think about it, to ensure that people and organizations don’t just get any old information — but the right, the best information. They should filter out bad, inaccurate information from unreliable sources and replace it with its opposite. They are, in short, the economic mirror image of markets: where efficient markets ensure information efficiency, efficient communities ensure information productivity.

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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Umair Haque is Director of the Havas Media Lab. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries.

Monday, April 19, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , | Leave a comment

Which scale does every business need now?

Umair Hague

Umair Haque responds to that question in an article written for the Harvard Business blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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By design. 20th Century organizations were built to have strategic intent. The point of a strategic intent is merely to best rivals. That’s the opposite of an ambition: it’s just combat. Yesterday’s organizations were missing the burning desire to improve on yesterday in their very DNA. That’s what reduced them to passionless machines — and it’s what ultimately makes our lives smaller, our economies less vibrant, and our societies poorer.

A real ambition, in contrast is a living expression of how an organization answers the four-word challenge of 21st Century economics [i.e. minimize evil, maximize good.]. Twenty-first Century businesses have ambition — at giganto-mega-universe-sized scale instead. “To organize the world’s information and make it universally accessible”: now there’s an ambition at scale.

Twenty-first century scale is about ambition, not stuff. So here’s a killer question to kick off 2010: Does your ambition scale?

An ambition that scales is one that takes an organization already creating thick value, and expands it to affirmatively answer these three questions:

• Is it globe-spanning?

• Is it world-changing?

• Is it life-altering?

For most organizations, the answers are: maybe, nope, not a chance. For a few, even, worse; the answers are: yes, for the worse, for even worse. Most organizations have only the tiniest, puniest, most inconsequential of ambitions. And that, quite simply, is why most are obsolete.

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Umair Haque is Director of the Havas Media Lab. He also founded Bubblegeneration, an agenda-setting advisory boutique that shaped strategies across media and consumer industries. Here are links to http://www.bubblegeneration.com/ and http://www.havasmedialab.com/.

To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

Thursday, January 28, 2010 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , | Leave a comment

21st Century Strategy in Four Words

Umair Hague

Here is an excerpt from an article written by Umair Haque. To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

21st Century Strategy in Four Words
Umair Haque

It’s as predictable as the chorus of a power ballad. Every time I discuss good and evil, howls of protest erupt. Is it polemic? Is it deliberately controversial? Isn’t hard-nosed business beyond good and evil, anyways?

Not a chance.

Here’s 21st century strategy, summarized in four words: minimize evil, maximize good.

Forget a snot-nosed punk like me for a second. Adam Smith, Jeremy Bentham, John Stuart Mill, Friedrich Hayek laid the foundations (among others) of modern econ. Smith’s Theory of Moral Sentiments — the origin of the Invisible Hand — Bentham’s utilitarianism, Mill’s theory of liberty, Hayek’s catallaxy — all were fundamentally concerned with minimizing bad, and maximizing good. Economics is, at its heart, about good and bad. “Goods” and “bads”, remember? They’re the most elementary concept in econ 101.

But, in the search for a more perfect model, they’ve “rightsbeen left behind. Econ 1.0 assumed a perfect world — one of perfect information, rationality, zero friction, etc. That world, it was said, is a utopia: yesterday’s institutions — “free” trade, property ,” annual reports, self-interested managers, etc — are able to perfectly measure and weigh goods and bads. But the real world isn’t so simple. All too often, our economy works backwards. “Bads” literally overwhelm “goods.” Evidence? Try yesteryear’s mega-banking crisis on for size.

So the central, pressing question is this: How do we design better institutions that do minimize the production of bads, and maximize the production of goods? That is, of course, what Copenhagen is really about — not carbon. It’s about redesigning the fabric of the global economy, so bads are erased, and goods pop into existence.

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Umair Haque is Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation. Prior to Havas, Umair founded Bubblegeneration, an agenda-setting advisory boutique that helped shape the strategies of investors, entrepreneurs, and blue chip companies across media and consumer industries. Bubblegeneration’s work has been recognized by publications like Wired, The Red Herring, Business 2.0, and BusinessWeek, and in Chris Anderson’s Long Tail, to which Umair was a contributor.

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To read the complete article, check out other articles and resources, and sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

Wednesday, December 16, 2009 Posted by | Bob's blog entries | , , , , , , , , , , , , , , , , , | 1 Comment

   

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