Nancy F. Koehn on “Lincoln’s School of Management”

A 2012 re-enactment of the Battle of Shiloh as captured by a pinhole camera in Michie, Tenn. Such a camera has no lens, viewfinder or shutter — just a pinhole at the front and film at the back. Images can be soft and require long exposures. More photographs are at civilwar150pinholeproject.com.No retouching or Photoshop processes were used on these images, with the exception of basic color correction.

Photo credit: Michael Falco

Here is a brief excerpt from an article written by Nancy F. Koehn for The New York Times in which she examines the legacy of Abraham Lincoln hangs over every American president. “To free a people, to preserve the Union, “to bind up the nation’s wounds”: Lincoln’s presidency, at a moment of great moral passion in the country’s history, is a study in high-caliber leadership.”

To read the complete article, please click here.

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In this season of all things Lincoln — when Steven Spielberg is probably counting his Oscars already — executives, entrepreneurs and other business types might consider dusting off their history books and taking a close look at what might be called the Lincoln school of management.

Even before Lincoln the movie came along, there was a certain cult of leadership surrounding the 16th president. C.E.O.’s and lesser business lights have long sought inspiration from his life and work. But today, as President Obama embarks on a new term and business leaders struggle to keep pace with a rapidly changing global economy, the lessons of Lincoln seem as fresh as ever. They demonstrate the importance of resilience, forbearance, emotional intelligence, thoughtful listening and the consideration of all sides of an argument. They also show the value of staying true to a larger mission.

“Lincoln’s presidency is a big, well-lit classroom for business leaders seeking to build successful, enduring organizations,” Howard Schultz, chief executive of Starbucks, said in an e-mail. Lincoln, he said, “always looked upward and always called American citizens to a higher road and to a purpose bigger than themselves. He did this by listening carefully to those both inside and outside of his immediate circle and sphere of influence. Listening, always being present and authenticity are essential leadership qualities whether one is leading a country in wartime or a company during a period of transformation.”

As a historian at Harvard Business School, I have been a student of Lincoln for more than a decade. I have written a case study and several articles about his presidency and talked extensively about him to business executives and entrepreneurs. The film Lincoln , which follows his efforts to ensure the passage of the 13th Amendment, making slavery unconstitutional, offers ample evidence of his ability to lead. But to me, his earlier experience in drafting and issuing the Emancipation Proclamation offers one of the best ways to appreciate his strengths as a leader.

Before and after he signed the proclamation, 150 years ago this month, Lincoln confronted a string of military setbacks, intense political opposition and his own depression and self-doubts. In the summer of 1862, Confederate forces under Robert E. Lee attacked “repeatedly, relentlessly, with a courage bordering on recklessness,” as the historian James M. McPherson has written. Union supporters realized that the Civil War — originally envisioned as a short, swift conflict — would be much longer and bloodier than imagined.

Northern newspapers and politicians assailed the administration for incompetence. The number of Union Army volunteers dwindled. Abolitionists, who since the war’s start had urged Lincoln to move aggressively against slavery, grew increasingly frustrated.

All of this bore down on the president. When he learned that George B. McClellan, commander of the Army of the Potomac, had retreated after a series of conflicts known as the Seven Days’ Battles, Lincoln described himself “as nearly inconsolable as I could be and live.” And, personally, the death of his 11-year-old son, Willie, five months earlier still weighed heavily on both the president and his wife.

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To read the complete article, please click here.

Nancy F. Koehn is a historian at the Harvard Business School where she holds the James E. Robison chair of Business Administration. Koehn’s research focuses on entrepreneurial leadership and how leaders, past and present, craft lives of purpose, worth, and impact. She is currently working on a book about the most important lessons from six leaders’ journeys, including Abraham Lincoln, Ernest Shackleton and Rachel Carson. Her most recent book, The Story of American Business: From the Pages of the New York Times (Harvard Business Press, 2009), examines the people, events, and larger forces that have shaped business in the twenty-first century.

The Curse of Being a High Achiever

In the June 2011 issue of Harvard Business Review, “The Paradox of Excellence,” Thomas J. DeLong and Sara DeLong explain how and why high achievers often undermine their leadership by being afraid to show their limitations. Here are some behaviors that, although they may help someone to achieve success, can also get in the way.

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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The classic high achiever is:

Driven to get results. Achievers don’t let anything stop them. But they can get so caught up in tasks that providing transparency to colleagues or helping others feels like a waste of valuable time.

A doer. Achievers believe, often rightly, that nobody can do it as well as they can. That can make them poor delegators—or micromanagers.

Highly motivated. Achievers take all aspects of their jobs seriously. But that means they often fail to distinguish between the urgent and the merely important.

Craving of positive feedback. Achievers care intensely about how others view their work—but they tend to ignore positive feedback and obsess over criticism.

Competitive. An appetite for competition is healthy, but achievers obsessively compare themselves with others, which can lead to a chronic sense of insufficiency, false calibrations, and ultimately career missteps.

Passionate about work. Intense highs can give way to crippling lows. For achievers, it’s a fine line between triumph and agony.

A safe risk taker. Achievers aren’t likely to recklessly bet the company on a risky move, but they may shy away from the unknown.

Guilt-ridden. Achievers are driven to produce, but no matter how much they accomplish, they feel like they aren’t doing enough.

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To read the complete article, please click here.

Thomas J. DeLong is the Philip J. Stomberg Professor of Management Practice at Harvard Business School and the author of Flying Without a Net (Harvard Business Press, 2011).

His daughter Sara DeLong is a psychiatrist in private practice and community mental health in San Francisco and an assistant clinical professor at UCSF’s Department of Psychiatry.

Paths to Power: A book review by Bob Morris

Paths to Power: How Insiders and Outsiders Shaped American Business Leadership Anthony J. Mayo, Nitin Nohria, and Laura G. Singleton Harvard Business Press (2007) I recently re-read In Their Time, co-authored by Anthony Mayo and Nitin Nohria, in combination with this book whose subtitle correctly indicates what Mayo, Nohria, and Laura Singleton set out to explain: how “insiders” and “outsiders” of big business (as Michael Useem explains in an insightful Foreword) presided “over our dominant organizations” and, in process, examine “which pathways lead to the apex – or which do not” for those who would also achieve such dominance.

Rather than limiting their attention to a set number of exemplary leaders – in chronological order — and then devoting a separate chapter to each, taking a linear approach to the material, the co-authors chose to examine the evolution of 20th century business leadership in terms of the ten decades, assigning to each following the first chapter an appropriate component (birthplace, nationality, religion, education, class, gender and race, etc.) while frequently cross-referencing throughout the entire century. For example, they juxtapose comparable individuals such as James Stillman’s presidency of National City Bank (1891-1909) and Sanford “Sandy” Weill’s of Citigroup (that National City Bank eventually became) a century later.

Mayo, Nohria, and Singleton’s role in Paths to Power is more that of cultural anthropologists than as biographers or even business historians. They create a rich and nuanced social and economic context within a 100-year framework as they examine what separated outsiders from insiders in business leadership in the 20th century. In the city where I live, we have a number of outdoor markets at which slices of fresh fruit are offered as samples of the produce available. In that same spirit, I frequently include brief excerpts from a book to help those who red my review to get a “taste.” Here is a representative selection from the material that Mayo, Nohria, and Singleton provide.

On birthplace: “As a starting point in our examination of twentieth-century leader backgrounds, we thus come away with the decisive conclusion that even in the United States, the great land of opportunity, not every birthplace was created equal…While mobility between regions tended to increase later in the century, people with more prosperous family origins – origins that typically stemmed from birth in a similarly prosperous region of the country -retained an advantage when entering business in a new area. The distinguishing features of each of the country’s major regions, both as sources of and sites for leaders, will constitute an important backdrop for further discussions about leader characteristics.” (Page 54)

On education: “Yale’s popularity among business leaders like the Weyerhaeusers vaulted it to a preeminent position in the early part of the century: it was the most popular school for all of our leaders prior to 1950, educating thirty-two of them (about 15 percent of all that era’s college graduates). With twenty-seven leaders, Harvard came next, and Massachusetts Institute of Technology (MIT) ranked a distant third with fourteen graduates. Yale was a perfect fit for the era of the dominant Protestant establishment, to which the Weyerhaeusers, steadfast Presbyterians, belonged. Yale was seen as a bastion of conservative, faith-oriented values during this period, in contrast to the more intellectual and individualistic attitudes at Harvard. (Page 124)

On class: “With nearly 30 percent of the leaders consistently coming from relatively poor backgrounds and, because of their success, passing on wealthy or at least quite comfortably middle-class upbringings to their own children, genuine upward mobility is undoubtedly represented by almost one in three of these leaders. Still, countermeasures such as the GI Bill and trends toward professional management, rather than improving the chances of those from poorer backgrounds, appear to have only held the line against an inexorable advantage of those with advantages.” (Page 184)

In his Foreword, Useem explains this book’s unique importance. “Studies of the social origins of America’s business elite have been a long-standing research tradition, dating to such classics as W. Lloyd Warner and James Abegglen’s Big Business Leaders in America and Mabel Newcomer’s The Big Business Executive, both published in 1955. We have not had the benefit of a truly comprehensive portrait since those works of more than fifty years ago; now Mayo, Nohria, and Singleton have not only updated the picture but also produced the definitive portrait of our time.”

Those who share my high regard for this brilliant book are urged to check out the aforementioned In Their Time as well as Stuart Crainer’s The Management Century and Stewart H. Holbrook’s The Age of the Moguls: The Story of the Robber Barons and the Great Tycoons. (Obtaining a copy of it is well worth the effort.) In it, Holbrook examines a number of “lords of capital” who, in his words, “made `deals’ purchased immunity, and did other things which in 1860, or 1880, or even 1900, were considered no more than `smart’ by their fellow Americans, but which today would give pause to the most conscientiously dishonest promoter….They were a motley crew, yet taken together they fashioned a savage and gaudy age as distinctively purple as that of imperial Rome, and infinitely more entertaining.” Holbrook’s account of 19th century robber barons and great tycoons “sets the table” for the “feast” of information and analysis that Anthony Mayo and Nitin Nohria with Laura Singleton so skillfully provide.

In Their Time: A book review by Bob Morris

In Their Time: The Greatest Business Leaders Of The Twentieth Century
Anthony J. Mayo and Nitin Nohria
Harvard Business Press (2005)

How great business leaders “seized the zeitgeist of their times”

I recently re-read Paths to Power, co-authored by Anthony Mayo and Nitin Nohria with Laura G. Singleton, as well as this book in which Mayo and Nohria also focus on some of the greatest business leaders of the twentieth century. As in Paths to Power, rather than limiting their attention to a set number of exemplary leaders – in chronological order — and then devoting a separate chapter to each, Mayo and Nohria chose instead to examine the evolution of 20th century business leadership in terms of the ten decades, assigning to each an appropriate theme while frequently cross-referencing throughout the entire century. For example, Chapter One (1900-1909) is titled “The Land of Opportunity”; Chapter Six (1950-1959) is “Feeding the Machine of Consumption”; and Chapter Ten (1990-1999) is “Reengineering, Restructuring, and Reality Check.”

In my opinion, as in their later book (Paths to Power), Mayo and Nohria’s role, is more that of cultural anthropologists than as biographers or even business historians. They create a social and economic context within a 100-year framework as they examine what differentiated outsiders from insiders in business leadership in the 20th century.

Near downtown Dallas, we have a number of outdoor markets at which slices of fresh fruit are offered as samples of the produce available. In that same spirit, I frequently include brief excerpts such as these from a book to help those who read my review to get a “taste.” Here is a representative selection from the material that Mayo and Nohria provide:

“The business executives of the first decade were driven, opportunistic, and innovative. They operated on a large scale and constantly expanded their base of power. They built businesses that often had far-reaching impact on the way society lived, but they were, for the most part, less concerned about the way people worked; there was generally little regard for progressive employment practices. The focus was not on the quality of work life or necessarily on the quality of the product; it was often the quantity of the output. For many, there was no better way to secure quantity in the 1900s than through consolidation, and the move toward consolidation subsequently spawned another fundamental shift in business – a focus on productivity and efficiency.” (Chapter One, Page 31)

Note: The business leaders discussed in this chapter include Clarence M. Wooley (American Radiator Company), Cyrus H.K. Curtis (Curtis Publishing Company), and Frank C. Ball (Ball Brothers Company).

“Although innovation and technical competence were the principal drivers of products in the 1940s, marketing, advertising, and standardization drove products and services in the 1950s. Sales volume was further increased because many products followed a planned-obsolescence life cycle. Successful businesses adopted this use-and-replace strategy, which was aided significantly with the rise in products manufactured with plastic or other synthetic materials. The lack of focus on product quality would eventually become a major liability for U.S. manufacturers, but that was hard to see in the general prosperity of the 1950s and 1960s as corporate profits continued to rise.”

Note: The business leaders discussed in this chapter include Howard J. Morgens (Procter & Gamble), C. Kemmins Wilson (Holiday Inn), Raymond A. Kroc (McDonald’s), and Malcolm P. McLean (SeaLand Service).

“As we have seen in our analysis of previous decades, the full impact of the entrepreneur’s work is often not visible for many years; these businesspeople often push the limits of what is possible and even what is conceivable. By their nature, entrepreneurs and their businesses are ahead of the curve, and it is relatively dangerous to assess performance and impact as it is unfolding.

Note: The business leaders discussed in this chapter include Alfred M. Zeien (Gillette Company), Louis V. Gerstner Jr. (IBM Corporation), and Meg Whitman (eBay).

Those who share my high regard for this brilliant book are urged to check out the aforementioned Paths to Power as well as Stuart Crainer’s The Management Century and Stewart H. Holbrook’s The Age of the Moguls: The Story of the Robber Barons and the Great Tycoons. (obtaining a copy of it is well worth the effort.) In his book, Holbrook examines a number of “lords of capital” who, in his words, “made `deals’ purchased immunity, and did other things which in 1860, or 1880, or even 1900, were considered no more than `smart’ by their fellow Americans, but which today would give pause to the most conscientiously dishonest promoter….They were a motley crew, yet taken together they fashioned a savage and gaudy age as distinctively purple as that of imperial Rome, and infinitely more entertaining.”

Holbrook’s account of 19th century robber barons and great tycoons “sets the table” for the “feast” of information and analysis that Anthony Mayo and Nitin Nohria so skillfully provide.

Paths to Power: A book review by Bob Morris

Paths to Power: How Insiders and Outsiders Shaped American Business Leadership
Anthony J. Mayo, Nitin Nohria, and Laura G. Singleton
Harvard Business Press (2007)

I recently re-read In Their Time, co-authored by Anthony Mayo and Nitin Nohria, in combination with this book whose subtitle correctly indicates what Mayo, Nohria, and Laura Singleton set out to explain: how “insiders” and “outsiders” of big business (as Michael Useem explains in an insightful Foreword) presided “over our dominant organizations” and, in process, examine “which pathways lead to the apex – or which do not” for those who would also achieve such dominance.

Rather than limiting their attention to a set number of exemplary leaders – in chronological order — and then devoting a separate chapter to each, taking a linear approach to the material, the co-authors chose to examine the evolution of 20th century business leadership in terms of the ten decades, assigning to each following the first chapter an appropriate component (birthplace, nationality, religion, education, class, gender and race, etc.) while frequently cross-referencing throughout the entire century. For example, they juxtapose comparable individuals such as James Stillman’s presidency of National City Bank (1891-1909) and Sanford “Sandy” Weill’s of Citigroup (that National City Bank eventually became) a century later.

Mayo, Nohria, and Singleton’s role in Paths to Power is more that of cultural anthropologists than as biographers or even business historians. They create a social and economic context within a 100-year framework as they examine what separated outsiders from insiders in business leadership in the 20th century. In the city where I live, we have a number of outdoor markets at which slices of fresh fruit are offered as samples of the produce available. In that same spirit, I frequently include brief excerpts from a book to help those who red my review to get a “taste.” Here is a representative selection from the material that Mayo, Nohria, and Singleton provide.

On birthplace: “As a starting point in our examination of twentieth-century leader backgrounds, we thus come away with the decisive conclusion that even in the United States, the great land of opportunity, not every birthplace was created equal…While mobility between regions tended to increase later in the century, people with more prosperous family origins – origins that typically stemmed from birth in a similarly prosperous region of the country -retained an advantage when entering business in a new area. The distinguishing features of each of the country’s major regions, both as sources of and sites for leaders, will constitute an important backdrop for further discussions about leader characteristics.” (Page 54)

On education: “Yale’s popularity among business leaders like the Weyerhaeusers vaulted it to a preeminent position in the early part of the century: it was the most popular school for all of our leaders prior to 1950, educating thirty-two of them (about 15 percent of all that era’s college graduates). With twenty-seven leaders, Harvard came next, and Massachusetts Institute of Technology (MIT) ranked a distant third with fourteen graduates. Yale was a perfect fit for the era of the dominant Protestant establishment, to which the Weyerhaeusers, steadfast Presbyterians, belonged. Yale was seen as a bastion of conservative, faith-oriented values during this period, in contrast to the more intellectual and individualistic attitudes at Harvard. (Page 124)

On class: “With nearly 30 percent of the leaders consistently coming from relatively poor backgrounds and, because of their success, passing on wealthy or at least quite comfortably middle-class upbringings to their own children, genuine upward mobility is undoubtedly represented by almost one in three of these leaders. Still, countermeasures such as the GI Bill and trends toward professional management, rather than improving the chances of those from poorer backgrounds, appear to have only held the line against an inexorable advantage of those with advantages.” (Page 184)

In his Foreword, Useem explains this book’s unique importance. “Studies of the social origins of America’s business elite have been a long-standing research tradition, dating to such classics as W. Lloyd Warner and James Abegglen’s Big Business Leaders in America and Mabel Newcomer’s The Big Business Executive, both published in 1955. We have not had the benefit of a truly comprehensive portrait since those works of more than fifty years ago; now Mayo, Nohria, and Singleton have not only updated the picture but also produced the definitive portrait of our time.”

Those who share my high regard for this brilliant book are urged to check out the aforementioned In Their Time as well as Stuart Crainer’s The Management Century and Stewart H. Holbrook’s The Age of the Moguls: The Story of the Robber Barons and the Great Tycoons. (Obtaining a copy of it is well worth the effort.) In it, Holbrook examines a number of “lords of capital” who, in his words, “made `deals’ purchased immunity, and did other things which in 1860, or 1880, or even 1900, were considered no more than `smart’ by their fellow Americans, but which today would give pause to the most conscientiously dishonest promoter….They were a motley crew, yet taken together they fashioned a savage and gaudy age as distinctively purple as that of imperial Rome, and infinitely more entertaining.”

Holbrook’s account of 19th century robber barons and great tycoons “sets the table” for the “feast” of information and analysis that Anthony Mayo and Nitin Nohria with Laura Singleton so skillfully provide.

The Set-Up-To-Fail Syndrome: A book review by Bob Morris

The Set-Up-To-Fail Syndrome: How Good Managers Cause Great People to Fail
Jean-Francois Manzoni (Author), Jean-Louis Barsoux
Harvard Business Press (2002)

The Negative Self-Fulfilling Prophecy

Note: I recently re-read this book while preparing questions for an interview and was amazed, frankly, how relevant the key insights in this book are to those in other books published yeas later, notably Jean-Lipman-Blumen’s The Allure of Toxic Leaders: Why We Follow Destructive Bosses and Corrupt Politicians–and How We Can Survive Them (2006) and The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World (2009) co-authored by Ronald Heifetz, Alexander Grashow, and Marty Linsky as well as Robert Sutton’s Good Boss, Bad Boss: How to Be the Best… and Learn from the Worst (2010).

Jean-Francois Manzoni and Jean-Louis Barsoux’s book is based on more than fifteen years of extended and combined research whose primary objective was to reveal the reasons why so many in positions of authority, especially bosses, are so ineffective when managing their subordinates, especially their perceived weaker performers. That is to say, supervisors are often unaware of the fact that they are “complicit in an employee’s lack of success. How? By creating and reinforcing a dynamic that essentially sets up perceived weaker performers to fail.” Hence the title of the  book. The authors explain the causes and effects of that “dynamic” (see “Set-Up-to-Fail Syndrome,” Chapter 3) and also explain how to avoid it (“Preventing the Set-Up-to-Fail Syndrome: Lessons from the Syndrome Busters,” Chapter 9). One of this book’s most valuable contributions is comprised of a series of “Tables” that organize and summarize key points. For example:

Table 2-1: “How Bosses See Their Behavior toward Subordinates” contrasts tendencies of bosses in relationships with weaker and stronger performers.
Table 5-1: “Taking Sides”presents two views of the same supervisor’s observed behavior either as a “great boss” or as an “impossible boss.”
Table 7-2: “Taking Responsibility Away from an Employee” juxtaposes a supervisor’s thoughts and feelings about a subordinate with direct interaction

Manzoni and Barsoux assert that the set-up-to-fail syndrome is “both self-fulfilling and self-reinforcing, which obscures the boss’s responsibility in the process as well as some of the key psychological and social mechanisms involved.” My own experience suggests an often great discrepancy exists between modes of behavior determined by conscious and unconscious mindsets. That is to say, many supervisors would vehemently deny that they are “complicit in an employee’s lack of success….[by] creating and reinforcing a dynamic that essentially sets up perceived weaker performers to fail.” Nonetheless they are. Were they to read this book, they would probably agree that there is such a syndrome and then lament how unfair it is to subordinates who are victimized by it.

One final point. Countless research studies of face-to-face communication have arrived at essentially the same conclusion: Body language creates 60-75% of the impact, tone of voice 15-20%, and content (i.e. what is actually said) only 10-15%. (Percentages vary among major global research studies but only slightly.) With the publication of this book, Manzoni and Barsoux have made a substantial contribution to our understanding of a widespread but, until now, neglected cause of human dysfunction in the workplace. Whether intentionally or not, a supervisor can sometimes create irreparable damage, especially to those who already feel insecure, by a negative and demeaning “message” which need not be expressed in words but comes through loud and clear nonetheless.

 

Great Again: A book review by Bob Morris

Great Again: Revitalizing America’s Entrepreneurial Leadership
Henry R. Northhaft
Harvard Business Press (2011)

Why are so many middle-class communities being “hollowed out”?

With David Kline’s assistance, Henry R. Nothhaft responds to the question posed as well as to another: “What to do about the ‘hollowed out’ middle class”? Years ago, “America [once] led the world in scientific and technological innovations,” Nothhaft notes, “and those technological innovations were inextricably linked to the high-value manufacturing of new products and services…That’s what enabled the wealth created by technological innovations to be diffused [begin italics] throughout [end italics] society and produce income gains not just for some highly educated elite, but for the masses of ordinary citizens as well. That’s what created the greatest middle class in the world.”

Today, that middle class “is vanishing before our eyes” and bold initiatives must be taken to arrest and then reverse that deadly process. In this book, Nothhaft provides “a powerful road map for recovering our nation’s innovation leadership and revitalizing our middle class.” What specifically needs to be done? Here is what he proposes:

1. Liberate entrepreneurs from start-up killing tax and regulatory shackles.
2. Fix the patent office so we can stimulate invention and entrepreneurship again.
3. Offer meaningful incentives to bring high-tech manufacturing back to America.
4. Ease immigration rules to transform the current brain drain into a brain gain.
5. Create government programs to support basic science and research.

Obviously, these strategic objectives will require immense resources as well as a wide and deep commitment by leaders at all kevels of the public sector and throughout the corporate and not-for profit sectors. Nothhaft devotes a separate chapter to explaining how to achieve each of the five objectives. He duly acknowledges that government “is an imperfect instrument” and yet, for all its high costs and political and economic failings, “government still remains the only society-wide institution we possess with sufficient scope and legitimacy to represent the public interest and to intervene in the flow of history to give it shape and direction.”

In my opinion, few of those who read this book will disagree with Nothhaft about “what” must be done to recover our nation’s innovation leadership and revitalizing our middle class” but several will challenge his recommendations with regard to “how” to achieve those objectives. Also, I am among those who hold out little (if any) hope that government at levels can and will provide the leadership as well as cohesive, comprehensive, and cost-effective programs (including reform programs) that are so urgently needed. My rating of this book is based on how well Henry Nothhaft presents his insights and advice. His thinking is sound and his prose is frequently eloquent. I share his vision but not his faith.

The Story of American Business: A book review by Bob Morris

The Story of American Business: From the Pages of the New York Times
Nancy F. Koehn, Editor
Harvard Business Press (2009)

The Who, What, When, How, and Why of U.S. Free Enterprise

Credit Nancy Koehn with skillfully selecting, organizing, and then editing a wealth of material that originally appeared in The New York Times from May 11, 1869 (“East and West,” an account by an unnamed correspondent of the celebration at Promontory Point when the railway first connected New York and California) until September 28, 2008 (“The Richest Man and How He Grew That Way,” Janet Maslin’s review of Alice Schroeder’s biography of Warren Buffett). The material is carefully organized according to three major themes: the corporation, American business and the changing nature of work, and the defining moments in technology. As Koehn suggests, “Taken together, these aspects provide us a kind of wide-angle lens on some – though by no means all – of the most important individuals and events that shaped American business history and that, in turn, did so much to give form to our own time and our possibilities in it.”

I especially appreciate the timelines that are inserted strategically throughout the narrative. They help to create a frame-of-reference for the profiles, as well as analyses of trends and significant events, briefings on historical periods, book reviews, end-of-year summary evaluations, and speeches such as the one delivered by Theodore Roosevelt in Provincetown, Massachusetts, on August 21, 1907, during which he shares his thoughts about the politics of his administration with regard to trusts. He also praises Puritan ancestors who “tamed the wilderness, and built up a free government on the stump-dotted clearings, amidst the primeval forest.” The variety of subjects correctly suggests the scope and depth of what Koehn refers to as “the most important individuals and events that shaped American business history and that, in turn, did so much to give form to our own time and our possibilities in it.”

Most readers will check out the Contents and then select articles of special interest to them. Others may prefer to proceed through one section to the next. Whatever the approach, the reading experience shares much in common with a situation in which a person begins to clear out an attic, cellar, garage or storage area and finds several boxes filled with clippings of articles from The New York Times. Some are about the rise of big business, the emergence of Wall Street, “merger mania,” major business leaders; other articles examine the changing nature of work such as the movement from farm to country and the emergence of labor unions; still others examine the “transportation revolution” (i.e. impact of railroads, the automobile, and commercial flight) and communication breakthroughs such as radio, television, and the Internet. There are at least some photographs a paradigm shift such as one of a Northern Pacific locomotive in 1900 and another in which Henry Ford sits in his car next to a horse and buggy in 1933. However, the bulk of the material consists of narrative text.

The specific entries that caught my eye include (listed in the order in which they appear in the book): “Uncle Sam Now Business World’s Business Man” (November 19, 1882), “Ladies as Stock Speculators” (February 3, 1880), “J.P. Morgan At Seventy, Believes in Keeping At It” (April 14, 1907), “Roosevelt Won’t Drop Trust War” (August 21, 1907), “The Peril Behind the Takeover Boom” (December 29, 1985), “Millionaires of Pittsburg – Twenty Years Ago and Now” (June 2, 1907), “Talking Business with Grove of Intel” (December 23, 1980), “`Neutron Jack’ Exits” (September 9, 2001), “Penned in Factories and No Fire Escapes” (October 12, 1911), he New Boss” (January 30, 2005), “The Wonders of Electricity” (April 4, 1998), “How We Spend Our Time” (April 24, 1937), “Honey, I am Not Home” (May 11, 1997), “Southwest Manages to Keep Its Balance” (September 25, 2001), “Television Effects on Families Shown” (February 5, 1950), and “Mapping Out the Wireless Phone’s Future”( November 12, 1992).

I have included the dates of these entries because many of those who are curious about this book share my interest in articles that reveal what the interests, concerns, issues, etc. were at a given time. Much of what happened a 100 years ago today provided at least some of the “news fit to print” that day so it has an historical significance. In some instances, the same account also suggests a specific stage of development or an emerging trend…or both…as in “Women Who Work Increase in Numbers and Influence” written by R.L. Duffus that appeared in the September 14, 1930, issue and “New Southerner: The Middle-Class Negro” co-authored by Wilma Dykeman an James Stokely that appeared in the August 9, 1959, issue.

The Design of Business: A book review by Bob Morris

 The Design of Business: Why Design Thinking is the Next Competitive Edge
Roger Martin
Harvard Business Press (2009)

I just re-read this book and value it even more now than I did when it was first published. One point I want to make here that I failed to make in a prior review is that the design of business (in fact, the design of anything) requires a mindset that is guided and informed by certain principles that must accommodate both analytical and intuitive issues. Stated anoter way, how you design is even more important than what you design.

In his latest book, Martin explains why “design thinking is the next competitive advantage.” In fact, it may well be the most valuable application of integrative thinking as explains in his previous book, The Opposable Mind), in part because successful business innovation is the result of collaboration and proceeds through a “path” or (as Martin describes it) a “knowledge funnel.” The model for value creation that he offers in this book requires a balance – “or more accurately a reconciliation – between two prevailing points of view on business today.” One is analytical thinking that “harnesses two familiar forms of logic – deductive reasoning and inductive reasoning – to declare truths and certainties about the world.” The other is intuitive thinking – “the art of knowing without reasoning. This is the world of originality and invention…Neither analysis nor intuition is enough,” however. Martin presents a compelling argument in support of reconciling the two modes of thought, asserting that the most successful businesses in the years to come will balance analytical mastery and intuitive originality “in a dynamic interplay [he calls] design thinking.”

How so? “Design thinking is the form of thought that enables movement along the knowledge funnel, and the firms that master it will gain an inexhaustible, long-term business advantage. The advantage, which emerges from the design-thinking firms’ unwavering focus on the creative design of systems, will eventually extend to the wider world. From these firms will emerge the breakthroughs that move the world forward [because] design-thinking firms stand apart in their willingness to engage in the task of continuously redesigning their business.” And, I presume to add, because their leaders have mastered integrative thinking, without which creative and productive collaboration cannot be achieved, much less sustained.

So, what is “the design of business”? It is the process by which business leaders apply design thinking within the current knowledge stage and hone and refine what is known so that they can “generate the leap from stage, continuously in a process I call the design of business.” Citing the pioneer insights of Charles Sanders Pierce, Martin duly acknowledges that it is not possible to prove any new thought, concept, or indeed in advance. In fact, “proof” must be redefined and “the answer, Pierce said, would come through making a ‘logical leap of the mind’ or an ‘inference to the best explanation’ to imagine a heuristic for understanding the mystery.”

 

Open Business Models: A book review by Bob Morris

Open Business Models: How to Thrive in the New Innovation Landscape
Henry Chesbrough
Harvard Business Press (2006)

Innovation requires an open mind…and the courage to challenge “the ideology of comfort and the tyranny of custom.”

In preparation for my second interview of Henry Chesbrough, I recently re-read his Open Innovation: The New Imperative for Creating and Profiting from Technology and then this book, first published in 2006, as well as his latest book, Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era (2011). Chesbrough’s insights continue to be among the most influential throughout the business world within and especially beyond the United States.

What is an open business model? In Chapter 1, here’s Henry Chesbrough’s response to that question: “A business model performs two important functions: it creates value and it captures a portion of that value. It creates value by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added throughout the various activities. The business model captures value by by establishing a unique resource, asset, or position within that series of activities, where the firm enjoys a competitive advantage.”

Having thus established a frame-of-reference, Chesbrough continues: “An open business model uses this new division of innovation labor – both in the creation of value and in the capture of a portion of that value. Open models create value by leveraging many more ideas, due to their inclusion of a variety of external concepts. Open models can also enable greater value capture, by using a key asset, resource, or position not only in the company’s own business model but also in other companies businesses.”

These two brief excerpts are provided because Chesbrough`s definitions of various terms are far clearer and more authoritative than mine could possibly be. Also, these excepts address the “what” so that in the balance of this brilliant book, Chesbrough can then focus almost entirely on the “why” and “how” concerning the design, implementation, modification, and performance measurement of open business models.

I was especially interested in what Chesbrough has to say about what several quite different exemplary companies — including IBM, Qualcomm, Genzyme, Procter & Gamble, and Chicago (the musical stage show and film) — share in common: “each started with an idea that traveled from invention to market through at least two different companies” which shared the work of innovation, and, all were assisted by effective management of an open business model. Chesbrough also devotes a substantial attention to IBM whose type 3 business model (i.e. multiple segmentations, “inside-out” mindset) reached a financial crisis in 1992. Had the IBM board not replaced its then CEO with Lou Gerstner and fully supported his leadership throughout an immensely complicated and equally difficult transformation, it is probable that IBM would not have survived. Gerstner deserves much of the credit for the success of that “cultural revolution” (as he once described it) but much credit should also be assigned to IBM’s open source business model.

Procter & Gamble is another company which completed an especially difficult transition from having internal staff members who protected (hoarded?) various technologies so that other companies, including potential competitors, could not use them to becoming a company with a much more open approach to innovation. Chesbrough notes that P&G began to pay much greater attention of external licensing of its technologies, (e.g. to BearingPoint), now strongly supports openly partnering for driving growth equity joint ventures (e.g. with Clorox), and an entirely new perspective on competitive advantage.

I also appreciate what is rarely provided in other business books: detailed notes (Pages 217-242) that are clustered per chapter. As I read them, it seemed as if Chesbrough were standing next to me, supplementing his narrative with additional comments that are always informative and frequently entertaining. What also struck me about Chesbrough’s notes is that they enable him to acknowledge various sources with appreciation and admiration. His was obviously an open source approach to the research for this book and then to the writing of it.

To thrive in the new innovation landscape, change agents must have both an open mind and the courage to challenge what James O’Toole characterizes, in Leading Change, as “the ideology of comfort and the tyranny of custom.” They would also be well-advised to absorb and digest the material in this book.