Getting Innovation Right: A book review by Bob Morris

Getting Innovation Right: How Leaders Leverage Inflection Points to Drive Success
Seth Kahan
Jossey-Bass/A Wiley Imprint (2013)

“There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” Peter Drucker

Those who have read any of Seth Kahan’s previous books (notably Getting Change Right) already know that he has an insatiable curiosity to understand what works in business, what doesn’t, and why so that he can then share what he has learned with as many people as possible. He is a world-class pragmatist and that is obvious in his latest book in which he explains “how leaders leverage inflection points to drive success.” The former chairman and CEO of Intel, Andy Grove, was probably the first person to popularize the term in his book, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company (1996), although it was by then familiar to students of differential calculus. During a presentation at an Intel annual meeting in 1998, Grove explains what he means by strategic inflection points.

“They represent, in my description of it, what happens to a business when a major change takes place in its competitive environment. A major change due to introduction of new technologies. A major change due to the introduction of a different regulatory environment. The major change can be simply a change in the customers’ values, a change in what customers prefer. Almost always it hits the corporation in such a way that those of us in senior management are among the last ones to notice. I’m paraphrasing the words you used in some of your talk, Peter. But what is common to all of them and what is key is that they require a fundamental change in business strategy, and that’s almost a definition of a Strategic Inflection Point. A Strategic Inflection Point is that which causes you to make a fundamental change in business strategy. Nothing less is sufficient.’

I think Getting Innovation Right is Kahan’s most valuable and thus will become his most influential book…thus far. The information, insights, and counsel he provides in it are relevant to almost any organization, whatever its size and nature may be. Moreover, his pragmatic approach to core issues ensures that most of his focus is on what to do and how to do it. For example, consider his brilliant use of reader-friendly devices that include illustrative Figures (23 of them) and data composite Tables (four of them) as well as “Expert Input” contributions in each chapter by real executives in real situations and a “Success Rules” recap at the conclusion of Chapters 1-7.

Kahan realizes that many (if not most) effirts to crerate a workplace environment within which innovation thrives either fail ort fall far short of original expectations. Why? Reasons vary, of course, but Kahan suggests three likely causes: operational pressures, stress of continuous improvement, and changing dynamics within the given industry and/or competitive marketplace. What he offers is a cohesive, comprehensive, and cost-effective system that — with appropriate modifications, of course — by which business leaders can leverage the inflection points to expand the given customer base. When explaining HOW, Kahan focuses on five factors: (1) Current customer satisfaction, (2) Their desire for whatever is offered, (3) The current reputation of its provider, (4) A value proposition that is both (key descriptives) deliverable and sustainable, and (5) Effective outreach.

These are among the dozens of passages that caught my eye, also listed to suggest the scope of Kahan’s ‘s coverage.

o Four Targets for Innovation Strategy (Pages 7-14)
o Using Inflection Points to Achieve Success (22-31)
o The Three Forces That Jeopardize Innovation (37-44)
o The Three Areas of Focus for Intelligence (66-71)
o Figure 3.1: The Ten Stages of the Customer Journey (78-79)
o Four Techniques for Shifting Perspective (98-106)
o The Four Forces of Disruption (110-114)
o Value Assessments (140-144)
o The Innovation Profit Cycle, The Facets of Value, and The Three Types of Added Value (151-158)
o Creating New Value (175-181)
o The Four Thresholds of Engagement (185-198)
o Build Presence Through Value Pulses (210-217)

Also, these resources:

Appendix A: Sample Business Intelligence Contract (219-222)
Appendix B: High-Level Outline of a Typical Business Plan (223-224)
Appendix C: Simplified Business Plan Financial Model (225-226)

Seth Kahan certainly achieves his ultimate objective: To introduce and explain seven key activities that will help prepare leaders in almost any organization to leverage inflection points to drive its success. By way of review, the activities are (1) pursue inflection points, (2) build innovation capacity, (3) collect intelligence, (4) shift perspective from status quo to what can and should be better, (5) exploit opportunities generated by disruption, (6) create value for all stakeholders, and (7) drive innovation uptake.

With all due respect to the wealth of information, insights, and counsel provided in this book, however, it remains for each reader to determine (a) which of the material is most relevant to the given enterprise and then (b) make a full and shared commitment with colleagues to formulate, implement, and continuously improve a results-driven, high-impact action plan. When embarked on that journey, I hope that will keep Drucker’s observation in mind: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Ken Segall: An interview by Bob Morris

Ken Segall  worked closely with Steve Jobs as his ad agency creative director for over 12 years spanning NeXT and Apple. He led the advertising team behind the “Think different” campaign that helped revitalize the Apple brand when Steve returned from exile in 1997; he co-wrote the first commercial ever to win an Emmy; and he set Apple down the i-way by naming the iMac. Having served as global creative director at agencies for Dell, IBM and Intel, Ken is in a unique position to describe how Apple’s culture sets it far apart from its competitors. And that’s just what he’s done in his bestselling book, Insanely Simple. Illustrating his points with behind-the-scenes stories from Steve Jobs’ world, Ken shows how the love of simplicity has guided the way Apple organizes, innovates, communicates and markets — and how simplicity has helped build the most valuable company on earth. Ken currently does creative work, branding and product naming for major brands. He blogs about technology and marketing at kensegall.com, and he has fun with it all at his Apple satire site, Scoopertino.com.

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing Insanely Simple, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Segall: At the risk of sounding like I’m obsessed with all things Apple, the easy answer to that question is: Steve Jobs. He was a truly remarkable person in so many ways, probably even more so to those who got to see him up close. I don’t think I ever left a meeting with Steve without being amazed how intensely smart and focused he was. I’m not at all surprised he was able to accomplish what he did. So to me, Steve was a person to be admired, and he opened my eyes to the things that are possible when you put all your energy into what you believe.

We’ve all heard stories about the not-so-nice things that Steve did, and many of those stories are true. But there was also a side to Steve that never got much press. He could be charming, energizing and even fun. He was a complicated mix — but I found him to be an inspiration, and he changed the way I live and work.Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?Segall: Every few years, I stumble upon my college transcript in a dusty file, and I’m always amazed — because I haven’t the faintest memory of having taken 99% of those classes. In my case, college was really more of a training ground for learning how to succeed. It presented me with a goal (getting a degree), and let me figure out the best way to achieve it. Learning how to allocate time and money to achieve a goal is a good foundation for a young person just setting out in life.

Ironically, I took an aptitude test before I entered college (Penn State) that indicated I might be a good fit in the world of advertising. That sounded somewhat interesting to me, so that’s what I signed up for. However, just seven weeks into my first term, I abandoned ship on that major and never looked back. I graduated with a BA degree and decided to play drums instead.

That’s what I did for the next seven years, until at the ripe old age of 29, I ended up in … advertising. I really should have given that aptitude test more credence. Given my experience, I’m always surprised to meet advertising people who actually studied for that profession. All the more power to them, but I found that my worldly adventures really helped me when I did get into advertising at a more advanced age. I had a better understanding of what makes people tick, and was able to tap into this understanding when I wrote headlines and copy. I probably advanced in the business more quickly than those starting right out of school.

Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time? Why?

Segall: Because I started later than most, and therefore had some maturity going for me, I don’t lament any lack of knowledge when I broke into the business. In fact, I often talk about how my innocence and idealism served as a business advantage. To me, the advertising business was fresh and exciting, and I didn’t get why some of the older people seemed to be trying to find a way out. One of the things that got me excited about working in an agency was the intelligence and wit I saw all around me. Unlike a lot of my fellow musicians, my advertising colleagues actually read newspapers. They were stimulating to be around. Very quickly, I felt like “these are my people.” Of course, there were some embarrassing moments as I learned what advertising was all about. Starting at Chiat/Day in L.A., I distinctly remember the first time I saw the form upon which copywriters would submit their final work. At the top of the page, in big type, it said “COPY.” I thought that was special paper for the Xerox machine. Little did I know that a career in copy awaited me.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Segall: This probably isn’t the answer you’d expect, but I’ll go with The Hudsucker Proxy. First, I’m a Coen Brothers fan (I did short promotional film with them about Apple’s Final Cut Studio video editing suite some years ago). Second, in typical Coen Brothers fashion, it has some wonderfully exaggerated characters and improbable plot lines. Yet we get an interesting assortment of the things we see in business every day: plotting, scheming, backstabbing, subterfuge and greed. I say all of this tongue-in-cheek, of course, but the movie wouldn’t be fun if such things didn’t actually exist in the corporate world. So in that sense you might even consider it educational.

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To read the complete interview, please click here.

You can learn more about Ken, his book, and his blog by visiting kensegall.com.

Simple Rules for a Complex World

Here is an excerpt from an article written by Donald Sull and Kathleen M. Eisenhardt 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.

Artwork: Nuala O’Donovan/Photography: Sylvain Deleu

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A decade ago, in the course of studying why certain high-tech companies thrived during the internet boom, we discovered something that surprised us: To shape their high-level strategies, companies like Intel and Cisco relied not on complicated frameworks but on simple rules of thumb. This was true even though they were in extraordinarily complex, challenging, and fast-moving industries. The rules were not only simple, we found, but quite specific. Typically, managers had identified one critical process—making acquisitions, for example, or allocating capital—where a bottleneck impeded growth, and then crafted a handful of guidelines to manage that process. This approach helped companies to bridge the gap between strategy and execution—to make on-the-spot decisions and adapt to rapidly changing circumstances, while keeping the big picture in mind.

We reported our findings in HBR (“Strategy as Simple Rules,” January 2001). At the time, we knew that simple rules worked in practice, but now—as a result of subsequent research that we and others have done—we have a much richer understanding of why they are effective and how to construct them.

Simple Rules in Action

The story of América Latina Logística (ALL) illustrates how simple rules can help companies shape strategy in an uncertain environment. It also demonstrates that this approach can be useful in a setting beyond the technology sector—such as a dilapidated freight railway in southern Brazil.

In the late 1990s the government of Brazil privatized the country’s freight lines. After decades of neglect, the nation’s freight-rail infrastructure was run-down: Half the bridges needed repair; a fifth were on the verge of collapse. Twenty steam locomotives that were decades out-of-date were still in use. Rail accounted for only 20% of long-haul shipments in Brazil, compared with 80% in most countries.ALL was spun off from the Brazilian railway authority in 1997 to manage one of the country’s eight freight lines. Its new management team took over an organization that was bureaucratic, overstaffed, and bleeding cash. Transport on the line was so unreliable that crops in the areas it served were routinely left to rot in the fields during the harvest season. Middle managers were confused about what to do, and many pushed their local agendas at the expense of the company’s overall best interests.

The team decided to adopt a simple-rules approach to the work ahead. Let’s look at how that approach helped ALL’s executives achieve alignment, adapt to local circumstances, foster coordination across units, and make better decisions.

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To read the complete article and watch a brief 3-minute video during which Donald Sull explains how to simplify your strategy, please click here.

 

Donald Sull is a professor of management practice at the London Business School and a global expert on managing in turbulent markets. His latest book is The Upside of Turbulence: Seizing Opportunity in an Uncertain World, published by HarperBusiness. Kathleen M. Eisenhardt is the Stanford W. Ascherman M.D. Professor at Stanford University and a codirector of the Stanford Technology Ventures Program.

Confronting the Pain of Innovation

Here is an article written by Michael Schrage and published in Harvard Business Review. To read the complete article, check out all the other resources, sign in or sign up for HBR email alerts, and obtain discount information, please click here.

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Working “out of your comfort zone” is the euphemism; the organizational reality is “working through pain.” Innovation hurts.

Every organization I’ve observed that’s serious about being innovative is filled with people in genuine pain — not just stress or anxiety or deadline pressure, and certainly not discomfort. Pain. This can be the physical strain of consecutive all-nighters to test every meaningful configuration of a website before it goes live, to the emotional pain of subordinating your vision of the innovation to the vicissitudes of customer taste. Ideally, innovators go through pain so their customers and clients won’t have to

The International Association for the Study of Pain Management defines pain as “an unpleasant sensory and emotional experience…” That fairly captures a dominant innovation sensation at world-class innovators. The innovation cultures of Google, Samsung or Steve Jobs’ Apple or Andy Grove’s Intel, for example, make painfully clear that successful innovators have high thresholds for pain. Unpleasant sensory and emotional experiences abound. Yes, there’s also fun and exhilaration. But innovation leadership is less about clichés celebrating creativity, compelling visions or getting the best out of people than successfully helping innovators beat what hurts. Overcoming resistance is not the same as pushing through pain.

That shouldn’t surprise. Confronting pain is integral to most other elite endeavors. World-class athletes and dancers explicitly train for pain even beyond the point of injury. Special Forces operators such as the Navy SEALs are expected to “Embrace the Suck.” Arguably one of the great flaws of formal business and technical education is that inculcating disciplined self-awareness around pain management is neither part of the culture nor the curriculum. But elite innovators, not unlike their athletic counterparts, understand and accept that they will likely hurt themselves and/or their colleagues on the path to innovation excellence. As Joseph Schumpeter of “creative destruction” fame notably observed, “successful innovation requires an act of will, not of intellect.

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To read the complete article, please click here.

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play and the forthcoming HBR Single Who Do You Want Your Customers to Become? To check out his other blog posts, please click here.

Donald N. Thompson: An interview by Bob Morris

Don Thompson is an economist and professor of marketing at the Schulich School of Business at York University in Toronto. He has taught at Harvard Business School and the London School of Economics. He is author of nine books, including The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art, which details his explorations in trying to understand the high end of the contemporary art market. Shark has been published in thirteen languages. His most recent book, Oracles: How Prediction Markets Turn Employees into Visionaries, was published by Harvard Business Review Press (June, 2012).

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing Oracles a few general questions. First, who has had the greatest influence on your personal growth? How so?

Thompson: A dozen brilliant people I encountered in grad school (at Berkeley) and later, in universities, businesses and government. From each I learned new things, but more important, new ways of looking at problems, and how to think outside the box.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Thompson: My formal education included an MBA, which got me interested in problem solving, and a PhD, which furthered that interest but is also provided an essential entry point to an academic career. So the formal education part has been invaluable for my career path.

Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time?

Thompson: The importance of the soft skills involved in communication, motivation and managing.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles?

Thompson: Citizen Kane. The explanation is in the eyes and mind of the viewer.

Morris: From which non-business book have you learned the most valuable lessons about business?

Thompson: I’ll suggest two: Michael Mauboussin’s More Than You Know: Finding Financial Wisdom in Unconventional Places (Columbia Business School Press 2008), and Cass Sunstein’s Going to Extremes: How Like Minds Unite and Divide (Oxford University Press, 2008). The Mauboussin book is about business, but more centrally, about making rational decisions. The Sunstein book is about how wrongheadedness gets worse when people get together in groups. Both are brilliant thinkers, I recommend anything with those names attached.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know.”

Thompson: Right. None of us is as smart as all of us (which is also a Japanese proverb).

Morris: Next, from Voltaire: “Cherish those who seek the truth but beware of those who find it.”

Thompson: The prediction market equivalent is probably, “If you really are afraid of the answer, don’t ask the question.”

Morris:  And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”

Thompson:  It never occurred to me that there was another option. Probably too late now.

Morris:Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Thompson: That is a great quote. I once was presented with its equivalent, by a Columbia marketing professor named Al Oxenfeldt, with whom I had co-authored a couple of articles and was proposing a new topic, which I had collected a lot of data on. Al said, “If something is not worth doing, it is not worth doing well.” Quite right.

Morris:In Tom Davenport’s latest book, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Thompson: That is exactly the philosophy of Jim Lavoie and Joe Marino, co-CEOs of my favorite prediction-market company, Rite-Solutions – which is the subject of the first chapter of Oracles.

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To read the complete interview, please click here.

Don cordially invites you to check out the resources at these websites:

Don’s faculty page, please click here

Amazon’s Oracles page, please click here.

Amazon’s The $12 Million Stuffed Shark page, please click here.

Carmine Gallo on “the Apple experience”: An interview by Bob Morris

Carmine Gallo is the communications coach for the world’s most admired brands. A former journalist for CNN and CBS, Gallo works directly with the world’s top business leaders to craft compelling messages, tell inspiring stories and share innovative ideas. Gallo is a popular keynote speaker and has addressed executives at Intel, Cisco, Medtronic, Hewlett Packard, SAP, Pfizer, Linked In, Chevron, and other global brands. Gallo writes bestselling books including The Innovation Secrets of Steve Jobs, the winner of an Axiom award for one of the best business books of 2011. The Presentation Secrets of Steve Jobs has become an international bestseller, translated into 14 languages. Gallo’s subsequent book, The Power of Foursquare, reveals how businesses leverage new mobile marketing tools to attract, reward and engage customers. His latest book is The Apple Experience: Secrets to Building Insanely Great Customer Loyalty, published by McGraw-Hill in 2012. He graduated from UCLA and has a master’s degree in journalism from Northwestern. Gallo lives in Pleasanton, California, with his wife and two daughters.

Here is an excerpt from my second interview of him. To read the complete interview, please click here.

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Morris: Who are Apple’s “internal” and “external” customers? To what extent (if any) does Apple treat them differently? Please explain.

Gallo:
 
The Apple Store “internal” customer refers to Apple Store employees. “External” customers are you and me, the folks who walk into the store to buy a product. Apple likes to say the soul of the Apple experience is in its people: the internal customer who is hired, trained, motivated, and empowered to do what is right for the customer.

Morris: What are the defining characteristics of Apple’s “insanely great customer experience” both internally and externally?

Gallo:
 I believe you can understand the Apple Store experience in two words: enriching lives. Those are the first two words on the Apple Store credo card that all employees are encouraged to carry. When you “enrich lives,” magical things start to happen. You hire employees who are passionate about serving the customer. You empower employees to spend as much time with a customer as they deem necessary. You design interesting spaces and multimedia displays in the store so customers can see and touch the devices. You can create innovative programs like One to One to help customers unleash their inner genius. It all starts with the vision to enrich lives; a vision that was very important to both Steve Jobs and former Apple head of retail, Ron Johnson (now CEO of J.C. Penney).

Morris: In two of your previous books, the focus is on Steve Jobs: his innovation and presentation “secrets.” To what extent does Apple’s “insanely great customer experience” illustrate any of those secrets? Please explain.

Gallo:
 I wrote The Apple Experience because we had much more to learn from Steve Jobs. In fact, some Apple Store employees told me they had read The Presentation Secrets of Steve Jobs and applied the principles to the sales floor, the “red zone,” as its known. That made me think: If the Apple Store is creating the next generation of customer service and some employees are using my book as a guide, then I have a real opportunity to capture and perhaps even influence the next level of the customer experience!

Morris: To what extent did Disney stores provide a model for Apple stores? To what extent did Apple stores provide a model for AT&T stores?

Gallo:
 I think it was just the opposite. Believe it or not, Apple inspired Disney! An executive who had the task of reinventing and revitalizing the Disney Store asked Steve Jobs for advice. Jobs’ response: Dream bigger. No better advice has ever been given. The new Disney Store will look a lot like Apple Stores complete with immersive, multisensory experiences, open space, uncluttered, and more. AT&T was also directly inspired by the Apple Store model. For example, walk into an AT&T retail location and you will be greeted within ten feet or ten seconds of entering the store. You’ll find the same approach in the Apple Store. The first “step of service” in the Apple Store is to greet a customer with a “personalized, warm welcome.” The way someone is greeted significantly impacts that person’s perception of the brand.

Morris: What are the basic tenets of “Disney’s People Management Philosophy”? What is its relevance to the Apple organization?

Gallo:
 Disney employees deliver a consistent experience because the organization is dedicated to a 4-step approach to people management: selection, training, communication and care. The same four tenets apply to Apple and to any other organization committed to improving the customer experience. You must select people who can deliver a superior experience, train them to do so, teach them to communicate effectively with customers, and care for them so they enjoy working with the company.

Morris: What is the three-step process by which Apple hires people? Why is being “fearless” a necessary trait?

Gallo:
 This is very powerful. The Apple Store likes to hire people who (1) display grit. Grit means they can handle pressure. (2) Can deliver a Ritz-Carlton level of customer service with the proper training and (3) could have gone toe-to-toe with Steve Jobs. Let me clarify the last point. Few people could have gone toe-to-toe with Steve Jobs. But it’s a question meant to gauge whether or not the job candidate displays fearlessness. In order for an effective feedback loop to occur, a company must have employees who are not afraid of giving and receiving feedback. They must be ‘fearless.’

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To read the complete interview, please click here.

Carmine cordially invites you to check out the resources at these websites:

http://www.appleexperiencebook.com

 

http://www.carminegallo.com

Forbes Greatest Business Stories of All Time: A book review by Bob Morris

Forbes Greatest Business Stories of All Time
Daniel Gross
John Wiley & Sons (1997)

Note: This was among the first books I reviewed for Amazon (in 2000) and I recently re-read it while doing some research on several of the 20 companies it features. Don’t let the publication date deter you.  These stories are even more entertaining and informative now than they were then because these are perspectives on them 25 years before many of them and their leaders became almost deities in the vineyards of free enterprise.

Each chapter offers a profile of a major contributor to the evolution of American business history, beginning with one of my ancestors, Robert Morris (America’s “first real businessman”), and concluding with Bill Gates (“Microsoft’s co-founder and guiding spirit”). In between, Gross and his associates also examine other great leaders such as McCormick, Rockefeller, Morgan, Ford, Merrill, Sarnoff, Disney, Johnson, Ogilvy, Kroc, Wilson, Ash, Walton, and McGowan as well as major corporations such as American Express, Intel, Harley-Davidson, and Kohlberg Kravis Roberts & Co. The reader is told, “This book is about heroes” and it really is.

Using the most effective strategies and devices of a storyteller, the authors examine biographical information within an historical context, sustaining interest with anecdotes while providing insights as to the causes and effects of each subject’s accomplishments. For Morris, essentially the economic survival of thirteen colonies during their struggle for independence. For McCormick, the industrialization of agriculture. For Rockefeller, the creation and development of the modern corporation. For Morgan, saving a nation’s financial system. For Ford, mass-producing affordable personal transportation. For Merrill, broadening the base of stock ownership to include those, among others, for whom the Ford Motor Company manufactured automobiles. Each of the other “heroes” discussed made equally important contributions.

A brief review such as this can only suggest (albeit inadequately) the wealth of information to be found in this book. The prose has snap, crackle, and pop. The focus is crystal clear. The lessons to be learned from the careers examined are of incalculable value. Although this book will be of interest to almost anyone, it will have special importance for school, college, and university students who may sometimes wonder if there are any “secrets to success.” The answer is yes. The specifics are to be found in the lives of those who are discussed in Greatest Business Stories of All Time.

Adam Lashinsky : An interview by Bob Morris

Adam Lashinsky is a senior editor at large for FORTUNE Magazine, where he covers Silicon Valley and Wall Street. Some of his cover-story subjects have included Apple, Hewlett-Packard and Google. He has written in-depth articles on Wells Fargo, Intel, Oracle, eBay, Twitter, and the venture-capital industry, as well as on topics ranging from San Francisco politics and oil-exploration technology to the post-Katrina economic recovery of New Orleans. In addition, Lashinsky is a Fox News Channel (FNC) contributor appearing on the following business shows: ”Bulls and Bears,” ”Cashin’ In,” “Cavuto on Business,” and “Your World with Neil Cavuto.” He is also the author of Inside Apple: How America’s Most Admired – and Secretive – Company Really Works, published by Business Plus (2012).

Prior to joining FORTUNE, Lashinsky was a columnist for The San Jose Mercury News and TheStreet. Before moving to California, he was a reporter and editor for Crain’s Chicago Business. As a Henry Luce Scholar, he worked for a year in Tokyo as a reporter for the Nikkei Weekly, the English-language version of Japan’s main economic daily. He began his career in the Washington, D.C., bureau of Crain Communications. A native of Chicago, Lashinsky earned a degree in history and political science from the University of Illinois at Urbana-Champaign. He lives in San Francisco with his wife and daughter.

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing Inside Apple, a few general questions. First, who has had the greatest influence on your personal growth? Please explain.

Lashinsky: It may sound corny, but my mother and father had the greatest influence. They got me started on a good path of loving to learn and instilling confidence in me. They both had a passion for words and ideas, and they also came from the school of parenting that supports their children in whatever it was they wanted to do. I don’t think they would have been pleased if I had chosen to be a beach bum. But they likely would have supported my decision to do it.

Morris: The greatest impact of your professional development?

Lashinsky: I’ve been blessed with great mentors and bosses for my entire career, which began in the summer of 1988 when I started writing opinion pieces for The Daily Illini at the University of Illinois in Urbana, Ill. My current boss, Andy Serwer, managing editor of Fortune Magazine, has been nothing but supportive and encouraging of me and my career at every turn. He is personally responsible for my turning my attention to Apple, beginning in 2008, which has changed the course of my career.

Morris: Years ago, was there a turning-point (if not an epiphany) that set you on the career course you continue to follow?

Lashinsky: Yes. In the summer between my junior and senior years at Illinois, where I was studying history and political science, I started contributing political columns to The Daily Illini, at the encouragement of my girlfriend at the time, who worked at the paper, and also became a professional journalist. I got a regular column in the fall term and fell in love with journalism. By the spring term of my senior year I was accepting any assignment I could in order to build up clips that I could show to prospective employers. I had been bitten by the journalism bug, and I have been enjoying the consequences ever since.

Morris: To what extent has your formal education in history and political science proven invaluable to what you have achieved thus far?

Lashinsky: History in particular gave me a good grounding in analytical thinking and gave me an ability to put important events in perspective. Whether or not the courses I took have benefited me directly, I can draw a straight line from my love of history to my interest in journalism as a career.

Morris: What are the most common misconceptions about the Silicon Valley culture? What, in fact, is true?

Lashinsky: It’s a misperception that everyone is stinking rich. Plenty of entrepreneurs fail. It’s true that failure is celebrated—or at least not stigmatized—in Silicon Valley. People truly take risks here, and that is exciting.

Morris: Of all that has changed in the business world during (let’s say) the last decade, which single development – in your opinion – has had the greatest impact? Please explain?

Lashinsky: Undoubtedly the Internet has constituted the biggest change. When I started in journalism we didn’t have email. We didn’t check Web sites. We didn’t have smartphones. Our entire mode of communicating has changed. And I’m not exactly ancient.

Morris: In your opinion, is launching a new company today more difficult, less difficult, or about the same as it was ten years ago? Please explain.

Lashinsky: Easier. But the precise dates you choose are relevant. It was extremely easy to start a company before 2001 because there was so much capital, and then difficult from 2001 to 2005 or so. But things are generally easier today because some of the building blocks of starting a company—computing power, storage capacity, software—have gotten anywhere from cheap to free.

Morris: Of all the U.S. presidents, which do you think was best qualified to be CEO of a “Fortune 50” company in the 21st century? Why?

Lashinsky: This question defies rational analysis, so instead I’ll go with a gut instinct and say Abraham Lincoln. Here’s why: Nothing in his background suggested he would be a great president, yet he was. He had a certain something, a magic, an instinct for what needed to be done. The great CEOs have this, and all the rest are less than great.

Morris: From your perspective as a journalist, what do you think will happen to (a) daily newspapers and (b) bound volumes?

Lashinsky: Newspapers eventually will go away. Which isn’t to say news will go away. We’ll have a painful and sad transition to whatever the digital product will look like—and then we’ll forget that we lamented their demise. If by bound volumes you mean books, I think essentially the same thing will happen, though books will survive longer because certain subjects—art, coffee table, kids—will lend themselves longer to the physical product.

Morris: What do you think will be the single greatest challenge that CEOs will face in (let’s say) the next 3-5 years? Any advice?

Lashinsky: Globalization means the importance of geographies changes more quickly than before. Just because a massive investment in China makes sense today doesn’t mean it will in five years. Advice: Subscribe to Fortune Magazine. We’ll do our best to keep you ahead of the curve.

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To read the complete interview, please click here.

Adam invites you to check out the resources at these websites:

http://adamlashinsky.net

http://www.amazon.com/inside-apple

http://www.facebook.com/adamlashinsky

https://twitter.com/#!/adamlashinsky
]

Great by Choice: A book review by Bob Morris

Great by Choice: Uncertainty, Chaos, and Luck – Why Some Companies Thrive Despite Them All
Jim Collins and Morten T. Hansen
Harper Business/A HarperCollins Imprint (2011)

Additional and even more valuable revelations about “the principles that distinguish great organizations from good ones”

For as long as I can remember, Jim Collins has been a research-driven business thinker. In each of his prior books, he and his associates (usually Morten Hansen among them) share what was revealed during many years of research to learn the answer to an especially important question. For Built to Last, it was “Why are some companies able to achieve and sustain success through multiple generations of leaders, across decades and even centuries?”; in Good to Great, “Why do some companies make the leap from good to great… and others don’t?”; then in How the Mighty Fall, “How and why do some once great companies fall and other companies never give in to the same challenges, problems, and setbacks?”; and now in Great by Choice, “Why do some companies thrive in uncertainty, even chaos, and others do not?”

Collins, Hansen, and their colleagues conducted a nine-year study (2002-2011) and share what they learned. Here are the findings that caught my eye:

1. For reasons best revealed within the book’s narrative, in context, some companies and leaders thrive in chaos. Those on whom the book focuses have out-performed their industry’s index by at least 10 times and (key point) under the same extreme conditions with which others in the same industry must also contend.

2. Characterized as “10X” companies, those selected were paired in a “near-perfect match” — for purposes of both comparison and contrast – with companies during “eras of dynastic performance that ended in 2002, not the companies as they are today. It’s entirely possible that by the time you read these words, one or two of the companies on the list [i.e. Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, and Stryker] has stumbled, falling from greatness.”

3. The research invalidates well-entrenched myths (see Pages 9-10) with regard to the 10X companies and their leaders. For example, “the evidence does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons [during the same timeframe]; and in some cases, the 10X cases were less innovative.”

4. Leaders of 10X companies display three core behaviors that, in combination, distinguish them from the leaders of less successful comparison companies. They also call to mind the behaviors of Level 5 leadership, examined in detail in Good to Great. Specifically, 10Xers exemplify fanatic discipline (“utterly relentless, monomaniacal, unbending in their focus on their quests”), empirical creativity (reliance on “direct observation, practical experimentation, and direct engagement with tangible evidence”), and productive paranoia (channeling their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety”).

5. In the Epilogue, Collins and his associates acknowledge their sense that “a dangerous disease” is infecting today’s culture, one that incorrectly suggests that greatness “owes more to circumstance, even luck, than to action and discipline.” Yes, they agree, good or bad luck plays a role for everyone, including 10Xers and Level Fivers. However, they offer an eloquent reassurance that many of us need to hear: “The greatest leaders we’ve studied throughout all our research cared as much about values as victory, as much about purpose as profit. As much about being useful as being successful. Their drive and stamina are ultimately internal, rising from where deep inside.”

Organizations do not make choices, their leaders do, and the fate of each of those organizations depends on the quality of the choices its leaders make, especially amidst uncertainty, chaos, and luck…three realities that even the best leaders can only manage rather than control. That is the challenge but also the opportunity to which the book’s title refers. The single most important difference between the 10X companies that Collins and Hansen discuss and those with which they are compared/contrasted is that those who lead them make better choices as they build and then sustain a culture within which everyone else does.

Richard Rumelt’s reflections on Apple and Steve Jobs

Here is a recent post by Richard Rumelt. He is the author of one of two books to be discussed at the next FFBS session, Good Strategy/Bad Strategy: The Difference and Why It Matters and the Harry and Elsa Kunin Professor of Business and Society at the UCLA Anderson School of Management. I urge you to read the book, rather than try to “fool people” that you have, and visit his website. To do so, please click here.

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When Steve Jobs stepped down from the CEO position at Apple, many people began to reflect on the nature of his contributions.

Under his leadership, Apple has become one of the most successful American companies of all time. Along with Intel, Microsoft, and Google, it has shaped much of what people experience as the new digital economy.

Steve Jobs contribution to Apple has been profound. Steve Jobs is not an engineer himself, yet he has guided Apple into being one of the great engineering companies, in the true sense of what it means to “engineer.” Apple did not invent personal computers, or the mouse and windows interface, nor did it invent digital music players, smartphones, or tablets. What it has done is to engineer products in these categories that are uniquely beautiful, efficient, easy to operate, and a joy to own and use.

This kind of design excellence is very difficult to achieve. It depends on a great many elements all working together and all working at a very high level. Like the excellence of a great film or work of music, the whole can be quickly ruined by a single false note. Steve Jobs’ special genius has been in holding to this very high standard and imposing it on the very talented engineers he has recruited to Apple. Competitors have raced to be first to market or to include the most features in their products, but have built products which are clunky and awkward in comparison to Apple’s.

To fully understand Apple, it is vital to look at the difference between its kind of excellence and cutting edge visionary technology. Back in 1993, CEO John Scully had Apple introduce a tablet called the “Newton.” It was visionary and advanced, attempting to recognize handwriting. Unfortunately, you cannot reliably do that, just as you cannot reliably implement voice recognition. When he returned to Apple in 1997, Steve Jobs killed the Newton. The secret of Apple’s excellence is not in living on the unworkable bleeding edge, but in doing exceptionally well that which can be done well with present technology.

Many people and companies want to emulate Apple and study what the company has done. I believe that in trying to learn from Steve Jobs and Apple it is very useful to pay attention to what he did not do. In compiling this short list, I have used ideas and phrases in common use by managers and business consultants:

• He did not “drive business success by a relentless focus on performance metrics.” Success came to Apple by having successful products and strategies, not by chasing metrics.

• He did not “motivate high performance by tying incentives to key strategic success factors.” Apple did not run a decentralized system based on pressuring individuals to deliver targeted business results.

• He did not have a strategy “built through participation by all levels to achieve a consensus which resolves key differences in perspectives and values.” Strategy at Apple is essentially driven from the top.

• He did not waste time on the delicate distinctions among “missions,” “visions,” and “strategies.”

• He did not use acquisitions to hit “strategic growth goals.” Growth was the outcome of successful product development and accompanying business strategies.

• He did not seek to engineer higher margins by chasing rust-belt concepts of “economies of scale.” He left such antics to HP.

Emulating Apple is not easy, but it is not impossible either. We are all surrounded by so-called high-tech products that promise much more than they deliver. I am writing this article on a Dell Inspiron 2305 that is a lovely all-in-one computer but which has a stereo sound system that cannot be heard three feet away. I expected my wife’s HTC Incredible 2 Android phone would provide a seamless interface to Google documents, but there is no such capability. RIM has built its market position on professional grade email, yet is trying to sell a tablet without email capability. Just two weeks ago I returned an HP 4500 Office Jet printer because its drivers refused to install on my Windows 7 64-bit system (a problem reported by many others over two years.)

The secret to emulating Apple lies in its efficiency at excellent design. Indeed, Apple has awakened many people to the value and joy of excellence in design. Not just the prettiness of the box, not just the simplicity of the interface, but the whole sense that a product is the best it can be, for the moment, at what it does.

Also, to see some of my comments in print and video at Apple Changed the Way the World Communicates, please click here.