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On this chapter of our site, we're aiming to give you some rules-of-thumb to think about. Business advisors are usually long-winded, often contradictory, and, like Greek prophets, trying to be ambiguous enough so that their rhetoric fits any outcome. In this advice column for business executives, we want you to know just what we mean, even if you disagree.

29.  -new items- Short Cuts—Secret Trails to Get You Through a Broken Economy

Increasingly our world does not work. The refrigerator, which used to last 20 or 30 years, breaks down in 3. Your cellphone is so complex that you never quite know how to operate it. The over-engineered TV you purchase now, at a huge price, only works when your cable provider is shooting a very good signal into your house, which is rarely the case. Your grocery sells you meat or vegetables or fish that is of less quality (some imports are even deleterious to your health) in containers that contain 20% less than they used to—at higher prices.

This means each citizen has to become a clever Yankee inventor, finding a way to get more for his or her money, finding ways when possible to avoid the plethora of companies and institutions that deliver less product and less service for more money.

We need short cuts, simple fixes and simple methods for fighting off an economy that does not work. In this dictum we give you a few hints on how to beat the broken system. We will be adding items now and again.

a. Arnica. There are doubters as to the effectiveness of this folk cure but we can personally testify that it works. It is for swollen wounds and bruises, seemingly reducing pain rather quickly, but importantly, taking down the swelling in short order. We just had an infection on our wrist where arnica helped eradicate the bump. In June we had internal swelling in our left eye after an operation: the retina doctor was amazed about how fast it healed. We did not tell him that we were supplementing his eye drops with a coating of arnica on the external skin surrounding the eye. One can apply commercial arnica as a cream or take pills of it internally.

b. Cable Signal Strength. If your TV picture is faltering, chances are the culprit is not your TV, but your cable carrier. You can put some zip in your box in several ways. With companies such as Time Warner, you can ask them to remotely reboot your cable from the central office. Or you can unplug the modem for a minute and then restart it: this will also reboot your cable connection. We favor having a technician come out to your home (he has to have a little more knowhow than the average installer). He can check the signal level and give it a proper boost if it is out of TILT. We favor this approach. Often remote fixes only last a while and then go sour. A hands-on fix usually endures.

c. Running the Gauntlet. Getting through Transportation Security nets at airports and through immigration at international points of entry into the United States. The U.S. Government has a system called Global Entry that can speed you through immigration when coming into the U.S. and which also will speed you through security at many airports in the U.S. If you travel a lot, inside the U.S. or outside of our borders, you are foolish not to get it. There is a rather cumbersome form to fill out online. Then, by appointment, one is quickly interviewed in person in order to secure your Global Entry or Known Traveler Number. This number whizzes you through those long lines at airports.

d. Blocking Super Cookie from Verizon. Cookies are awful things planted on your computer when you access search engines, phone companies, and a host of other websites for big companies. They clearly violate your privacy and allow all sorts of snake oil salesmen to manipulate aspects of your life. If you know about them, you can get rid of a few of them. For instance, Verizon is in the process of allowing you to opt out of its particularly noxious cookie. It is the nation's largest wireless carrier, so it is no small thing to be able to bar the gates in your cellphone.

e. Universal or Region Free DVD Players. You don't know it, but your everyday DVD player may not play DVDs from other parts of the world. For instance, we frequently order DVDs from the UK, which will not play on a standard US player. It is smart and easy to get a universal player: we tend to use Sony BDP. The region-only players only exist to make you pay higher prices for dvds, further enhancing the profits of producers and distributors.

"This is achieved by way of region-locked DVD players, which will play back only DVDs encoded to their region (plus those without any region code). The American DVD Copy Control Association also requires that DVD player manufacturers incorporate the regional-playback control (RPC) system. However, region-free DVD players, which ignore region coding, are also commercially available, and many DVD players can be modified to be region-free, allowing playback of all discs."

f. Easing Your Aching Back. The physical therapist, chiropractors, and pseudo doctors have all sorts of schemes for ameliorating backaches. Fifty years ago a San Francisco general practitioner taught us how to beat bad backs easily. Lie down flat on the floor. Slowly pull your feet backwards towards your abdomen, such that your knees only are raised upwards. All the while push your back down even flatter on the floor. Then move your feet forward very slowly, keeping your back flat and as close to the floor as possible. Do this several times in each day till the back pain disappears. (03-18-15)

g. Fast Track Asia. "Since you mention Global Entry, for your readers who frequently travel to Asia, the Global Entry card also entitles you to apply for an Asia Pacific Economic Conference (APEC) Card which the US has recently become the newest member. It entitles the holder to access virtually all Asian Airports of major countries in a VIP immigration line-very handy to visitors to this part of the world. Also, a little known fact for those travellers over 65, China's VIP immigration line (reserved for diplomats and other poobahs) lets you zip through without any wait. Finally, for travelers to Hong Kong, an Octopus stored value card is a handy and very inexpensive stored value card that gets you subways, fast train to the Airport and even taxis at a very big discount. They can be purchased at the airport or any subway station." Robert Theleen, chairman of Chinavest, a merchant bank, made this short cut contribution.

h. Free TV. "Do you know how to google ROKU? It's an internet based streaming device and system that enables you to get rid of the cable and watch almost anything which occurs to you. Soon, no one will have a TV. ROKU can hook you up to NetFlix, HBO and whatever. My kids have never owned televisions and you don't need one either. You can use ROKU on a wall screen or on a computer. When we bought the Vineyard house we got rid of the phone and the satellite dish. Life's fine without them and I prefer to read anyway. A big bonus is that it makes it easier never to flick on FOX or MNSBC and you're better informed without them." This do-in-the-networks strategy comes straight from San Francisco's super detective, David Fechheimer.

i. Totally Awesome. You are thrifty and save the plastic containers you get at the grocery market to hold food at home. But the gunk from the plastic labels is impossible to remove. Until you use Awesome. It is cheap and can be found at the Dollar Store.

j. Putting Pep in Your Wireless Network. If your computer wireless network at home does not easily connect with your phone, you are not alone. Millions of people try to use the wireless feature of their smartphones—and are sorely disappointed. What you need to do is goose your network with a powerful wireless router. Do not fall for the extenders offered by your wireless carrier, which oft as not will not work. We recommend the Netgear Nighthawk AC1900 (R7000). Here is a typical review.

k. Posturizing. Recently at a Pilates session a lady who experiences continuous pain in her knee fell backwards off her seat and landed flat on her back on the floor. Her back went numb, but at the same time, within just a few hours, all the pain went out of her knee. The hard jolt to her back induced worrying numbness in both her back and foot which lingered for a couple of weeks. Strangely however her knee pain is now much less. It seems that as a result of the fall, she has had to hold her shoulders up and walk with much better posture. Her straightened position took some pressure off her knee permanently, lessening the chronic pain.

l. More Pain Relief. There seem to be simpler ways to relieve chronic, unabated, inexplicable pain. A 39 year old male of our acquaintance has had pain in his back and several other parts of his body for more than a decade. He wears elevated shoes which have provided modest relief. Doctors for years have tried to diagnose and treat his complaint. Without success. Nothing conventional medicine has to offer seems to reckon with his ailment.

One of his children suffers from severe attention deficit hyperactivity disorder. Perhaps a month ago, as an act of whimsy, he robbed his son's Ritalin jar (the common treatment for ADHD) and popped a pill himself. Within hours he was entirely free of pain. The doctors he has now theorize that much of the pain he experiences or he experienced daily is caused by severe stress arising from all the tensions generated by work and family and modern life. Ritalin permits him to zone out. This is clearly an off off-label (as the FDA would put it) use of Ritalin. But it works for him.

Go here if you would like to read his own comments about this dramatic turnaround.

28.   The Urgent Always Swallows Up the Important

“Most things which are urgent are not important,
and most things which are important are not urgent.” -- Dwight D Eisenhower

      “Media, the plural of mediocrity.” -- Jimmy Breslin

“Forgive me my nonsense, as I also forgive the nonsense of those who think they talk     sense.” -- Robert Frost

Our Plagiarism.  We stole the nice title of this letter from blogger Jennifer Ouellette.  She opines, “We are born narcissists, almost by definition, since we can only experience the world around us from our own perspective. In that sense, the world revolves around us, and no wonder the prospect of having our consciousness snuffed out unsettles us.

“There was a very good reason people balked when confronted with scientific evidence to the contrary. Accepting Copernicus meant removing man from his place at the top of the cosmological food chain. “The world had scarcely become known as round and complete in itself when it was asked to waive the tremendous privilege of being the center of the universe,” Johann Wolfgang von Goethe later wrote of the implications of a heliocentric universe to 17th century believers. 'Never, perhaps, was a greater demand made on mankind.'”

Nonetheless, even with this understanding of our insignificance, she finds life riddled with meaning: “Nor does it make me feel like nothing I do could possibly matter. Quite the opposite: everything we do matters a great deal. That’s the paradox. It makes our short time here on Earth incredibly precious, in which every moment should be savored. I tell my husband I love him every single day, because those days are finite. Fifty years will be gone in an instant from a cosmological perspective. Our choices, our actions, how we choose to behave toward our fellow travelers — random kindness to strangers — all of this becomes tremendously important when one embraces insignificance… because this life is all we have.”

Cosmic Sifting.  An intelligence that can separate the wheat from the chaff, recognizing that we and all that is about us are impregnated with insignificance, offers us sure footing and spiritual relief in an age suffused with puffery nourished by a media that breeds mediocity all about. Breslin got it right:  our media—tv, cable, internet, radio, social networks—all of it is busy making mountains out of molehills and stuffing our heads with nonsense. Educator, cabinet secretary, and policy maker John Gardner got it right when he said we have a difficult task before us in a democracy where every utterance can be given equal credence and the quest for excellence can be dimmed by a mentality that treats every bleat as a symphony 

In his first major work, Excellence: Can We Be Equal and Excellent Too?,Gardner challenges us to think, and look, and see acutely, rather than gobbling up the quaint notions espoused by the mediocre in our society: “The society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy because it is an exalted activity will have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water.” Understand that mediocrity is our lot, but occasionally it is dotted with a few gems of excellence.

Trivia Outwitted.  It is this perspective that can best help us clean the trash out of our lives, be it at home or business.  One can skim or not even read most of one’s email. We do not need a smart phone where the world of nonsense reaches us too easily. We can more or less turn the TV off, reclaiming hours for conversation, and family, and tending of the garden. We can absolutely turn the phone off between 6 and 9 o’clock when the survey companies, politicos, crass fundraisers, and other peddlers try to reach us.  When you realize that much of what goes on around you does not count, you can make sure it is no longer counted. When we can get past the small stuff, we are taking our first steps out into the universe. 

There is plenty of jibber jabber to be shut down. To wit: “Every day were assaulted with facts, pseudofacts, news feeds and jibber-jabber, coming from all directions. According to a 2011 study, on a typical day, we take in the equivalent of about 174 newspapers worth of information, five times as much as we did in 1986. As the world’s 21,274 television stations produce some 85,000 hours of original programming every day (by 2003 figures), we watch an average of five hours of television per day. For every hour of YouTube video you watch, there are 5,999 hours of new video just posted!”

The Sixties Reprised. Those of us who lived in the Berkeley, San Francisco, Silicon Valley orbit in the 1960s may have thought that Free Speech, silicon chips, topless bars, and Beat Poetry were fruitfully upsetting the world’s apple cart. The twenty somethings of that day thought they were at the center of the universe, all the while turning the world upside down. Truth is, twas fun but not all that important.  It was so much fun then that a lighthearted editor (maybe Abe Mellinkoff) of the San Francisco Chronicle could put a banner headline on the paper one day, right on top of the first page, shouting “The Terrible Coffee in S.F.’s Restaurants” San Francisco has never been as much fun since, its commercial heart has declined, its housing is too expensive, and its newspapers now are truly a joke.  The town amounted to something when it had a sense of the absurd, and its leaders secretly knew that it was a small pretty town where pedestrians could safely cross the street and nobody really deeply thought about the universe.  A professor then remarked to us that there were some smart people at UC Berkeley and Stanford, but the trouble was that they had baked brains. It was a delightfully insignificant small spot on the globe.

Gresham’s Law.  In the present age, we are pressed to winnow out the dreck because there is so much of it. If we cannot get it under control, it becomes impossible to dream big dreams and climb tall mountains.  We’re meant to do better.  Most simply expressed, the Law that best sums up our situation says “Bad money drives out good money.”  But it also means bad ideas crowd out good ideas, sterile architecture and tar filled streets drive out beautiful hills and quiet homelives, loud mouths drown out civility, and so on. The important and the excellent only have a chance if we can put the mediocre aside, or at least laugh at it.

P.S.  The Atlantic, a publication many of us had left for dead, has revived itself marvelously, proving that there is fire in the ashes, that the dearly departed can be revived.  In a humorous video, it tries to tell us how to get control of email which infests our lives.

P.P.S.  Back when the Wall Street Journal was still a newspaper, a fine journalist named Hal Lancaster asked three of us how a brush with death (i.e., a serious illness) had changed our lives. In our own case, we said it made us much less tolerant of B…. S…. and Mickey Mouse.  Particularly in business we cast aside those who just wanted to jawbone and get nothing done.  Life had become precious and short, and we did not want to waste moments on those who were running in place. 

This reminds us of Mortality, a delightful and short account by Christopher Hitchens of his wrestle with cancer which all too soon brought him down.  We emphasize short.  Engagements with death make us into men with few words, economic in our style of communication, filling what moments we have with more meaning. (08-13-14)


27.   The Color of Money
Nicola Paone.  There’s a restaurant on 34th Street—Nicola Paone—that’s not on the lips of America, but it has a certain following.  It was the creation of an Italian troubadour of the same name (i.e., the eponym) and of uncertain talents who once wrote a song about Caesar  salad—some 17 verses long.  William Buckley, the father of the New Right and of rampant polarization in America, deems it his favorite, saying:

I can name my favorite restaurant as glibly as I can name my favorite wife, country, religion, and journal of opinion.  It is (I should like to say, “of course,” but Paone’s is not widely known) Nicola Paone; its address is 207 East 34th Street New York, and I suppose I have eaten there a hundred times in the last 10 years, which would certainly account for my being Paone’s favorite customer; but, believe me, in this courtship, I was the suitor.

The food, incidentally, is far from distinguished, but good, sensitive taste has never motivated any ideologue.  We’ve not been there for years, but when we did visit, it had a wonderful atmosphere, generating perfect comity and unforced good cheer among all those in our luncheon party.

The trick there we always thought was the endgame.  The dessert cart was very ample, and it was a sin to exit the restaurant without taking on some creamy delectable that added immeasurably to one’s midriff.  Then too, at the finish, the maitre Franco Alfonso or maybe the waiter presented the check with delicacy and a warm smile.  You felt like paying the bill and, by then, did not even remember what you had eaten.  It was simply a fine experience.

We hope it’s the same.  A well-mannered, well-dressed clientele that did not feel it had to shout to be understood.  Decorousness.

Getting the Money Right.  It’s next to amazing how often restaurants get the money wrong.  The wait staff and even management think they have done it right if they got the order straight and managed to get the entrée on the table when it is reasonably warm (or cold as the case may be).  Follow-ups after the plates are thrust on the table are random and rather mechanical; desserts are either stale or slowly prepared; wine and beer or bottled water are poured too fast with the hope then the patron will buy yet more.  And finally, the check.  It may be an ordeal to get it.  Or it may be slapped down early.  Or it may be incomprehensible.  And so on and so on.  A West Coast businessman just pointed out to us that waiters get their tip as the bill is paid: it behooves them to make paying a good experience, but they don’t.

Paying or getting paid in our society, as often as not, reminds us of The Color of Money.  You will remember that it was a 1988 Scorsese movie with Paul Newman and Tom Cruise.  It’s about hustling—gulling money out of people—at the pool table.  Ego on the loose, young Vincent Lauria (Tom C, the Scientologist) doesn’t even do that very well, because he has to show off.  This hustling is exactly what we want to avoid in business: transactions should not be tawdry, but they so often are.  And this is exactly antagonistic to the behaviors we need in an advanced, high-cost society where we have to embroider each transaction with fine values in order to separate ourselves from the commodity atmosphere of the emerging world.

Paying Right, Too.  It takes two to tango.  It’s not enough for the merchant to present his bill with panache.  The customer, the payer, has to do his part, too.  Year ago when Lone Star Industries decided to purchase a hardware/lumber chain from the Southwest, we heard tales of how James Stewart, the chain’s owner, did business.  When the bonuses were paid to his star employees, he would gather them all at a lumber lot and have a presentation ceremony.  Words of praise were not spared, and the employees were first paid with honor.  That the bonuses were small never mattered.  The events were so emotional, so evangelical, that those who were celebrated and all their fellow workers were said to have shed tears.  They were so moved.

He paid ‘em right.  And it was such a contrast to an investment bank we counseled some years later.  Without any fanfare, without any commendation, the money dribbled out.  One day we saw a few million dollars handed out in blank envelopes to the partners in one department by a clerk.  The pay pack was handsome in each case, but we do not remember seeing any smiles.  Though that investment bank was king of the hill in those days, it no longer exists today as an independent entity.  When you do things wrong, sooner or later you cease to exist.

A Boundless Opportunity.  Money is done so badly—the giving and the taking—that entrepreneurs with a nose for opportunity can drive a Mack truck through the unprotected flanks that large and small enterprises have opened up by their sloppiness in this sphere.   We recently were informed at one of our sites that Verizon was going to disconnect our phones because we had not paid our bills: its people had misapplied funds they had been sent to the wrong account, and the Verizon billing clerks could not cure the problem.  One of our staff went to a Verizon street location where it took no less than 20 minutes to pay the bill: the working poor have similar battles with the phone company every month.

All this, incidentally, would not be a problem if state regulatory commissions mandated that utilities have to accept payment by credit card over the phone.  They don’t have to. And they don’t.

Recently the Financial Times of London has been sending us a barrage of dunning notices for a subscription started two months ago.  That we had already paid the credit card invoice where their charges were reflected was of little interest to the subscription department.  They have lost the money somewhere in the bowels of the company and we continue to get their pesky bills. We have discovered over the years that more than one organization has received or paid out money—with no trail to the payer or the payee.

Banks are just the same.  A month ago a major money center bank took 2 hours of our time and 3 days of its own to do a money transfer which eventually got to New York City—by horseback we think.  Errors abound in bank operations, and the managers are none too embarrassed.  It took Bank of America two months, with a lot of prodding, to correctly record a deposit: that lost it a major corporate depositor.  In contrast, we have moved money in and out of a reasonably up-to-date brokerage house with incredible ease and have advised our clientele to put their assets there.

There’s a banker, now retired to Walla Walla onion country in the state of Washington, who told us his bank was in the ‘put and take business.’  You put money in or you take money out.  If he could do that for people, correctly and politely, he figured he would have a hell of a business.  His bank, which he sold at a huge profit, outshone all the vaunted giants in his home state of California.  For starters, he had lovely Persian carpets in his lobby, so it was a nice place for the well heeled to visit.

The Long Tail.  Chris Anderson, editor of Wired Magazine who came out of the Economist, penned an article for Wired in 2004.  Now he’s made The Long Tail into a book.  It’s a success, and it’s worth it.  It upsets all our notions about self-serving editors.  First off, we usually say editors should not be able to stuff their prose into their own magazines.  Usually such articles turn into long, boring, insignificant fare like David Remnick’s “The Wanderer,” a poorly written update in the New Yorker about Bill Clinton 2006 (September 18).

Even worse, we have always felt good taste should not permit mere articles to be turned into wordy books.  That’s a version of the academic-racket where professors turn their doctoral theses into a stream of repetitive articles and sometimes books.   There’s another variant of the same scam where profs discover a good article by somebody else and then work up a book around it.  Almost nothing new has been written about “How to Buy/Sell Professional Services” since Warren J. Wittreich scribbled some words on the subject for the March 1996 Harvard Business Review.  But B-School professors have been feeding on his thoughts ever since, turning out turgid books that expand on his ideas.

Anderson’s Long Tail is a bit original and is rather important.  We have previously commented about him in “Rum and the Fancy Food Show.”  To oversimplify, he thinks the Internet turns business upside down.  We have generally been told by business gurus to pay attention to the 20% of a market where all the money is made and to throw the rest off the back of the boat.  But the Internet changes the economics.  We can now make money, maybe more money, fooling around in the 80% territory that everybody else feels they should skip.  The Internet permits us to source and then distribute our product in new ways that changes our cost structure.  We can afford to be high-design craftsmen and focus on small niches.  Though Anderson mostly was thinking about media and entertainment when he wrote his piece, we can speculate that his thoughts apply throughout business.  In theory, we can now do artisan, craft, custom, boutique, special—and make a living.

The Custom Experience.  But that means that everything—the making of the product, the demonstration of the product, the selling of the product, the delivery of the product—has to become a special experience.  We cannot, like Brooks Brothers, pretend to be half in the genteel clothing business and then outsource our credit operations to somebody in Kansas City.  The buying and paying has to be gentlemanly as well.  One Dan Bricklin almost catches hold of this notion in his little essay “Paying for Style.”  People will pay a great deal, he theorizes, for an artistic experience or for interacting with people they care about.  Is it fair to say that they will even pay more for an experience where the paying itself is not a wretched event?  Where the money has not become discolored.  An experience is not custom unless every aspect of it strives to build a warm connection between the maker and the consumer.

26.  Don’t Talk About Yourself: You’re Not That Interesting
In the cold of winter, we all realize that we all must do something to boost sales.  Maybe we have just taken a look at our favorite charity, and realized that fundraising is not going too well.  Or, when we cast a gimlet eye on our investments and see that Wal-Mart’s stock has gone nowhere over the last 5 years, a light bulb goes off in our heads and we realize that Big Box is no longer racking up double-digit revenue gains, the basis of superior performance.  Alas, growth does not come easy any more, unless you are a low, low price Chinese manufacturer paying your employees fifty cents an hour.

Nonetheless, as we say to all our clients, we still think you can reach the next plateau.  The cavalry is on the way, and sustained revenue performance is within your grasp.  Or better yet, as Emeril, the New Orleans cook who emigrated from Massachusetts into the bayous, says, you can “kick it up a few notches.”  What slower times have taught us is that you can still treble your size, but you have to throw out your old notions of how to make a sale.  It takes a vastly different message—a real zinger—and a totally different engine (marketing method).

The old chestnut about advertising is “Only 1% of it works, and the rest is all waste.  The trouble is we don’t know which 1% will really do the trick.”  In the last few years, direct marketing experts and internet whizzes have promised they can hone in on the blessed few who will buy from us tomorrow—or at least someday.  They’re into targeting—something we espoused in the late 1980s and then put aside.  It was much ado about nothing.  It is all balderdash.  Their campaigns regularly pass by big prospects and too often focus on penny-ante, low-profit customers.  Good marketing is a little more complicated than shooting fish in a barrel.

As we said in “Sales: Branding Again,” the best kind of marketing does not search out and destroy your potential customer, but, instead, lures him to your doorstep.  What you want to do is to put together a garden of scents that will draw people to you, as bees to pollen.

In fact, there’s a recent book from an old advertising hand that claims we must tap into the five senses of our customers in order to mate them to our brand.  In this super-digital era, we are already saturated with a blur of sights and a whirr of sounds from hucksters.  We must get past this.  Mr. Martin Lindstrom suggests that we had better get at the nose, and the touch, and the taste in order to form an impregnable bond with our customers.

We’d add one more thought.  In defiance of all the laws of hucksterdom, we would suggest that if you want to be in the high-margin product business you had also better make a lasting appeal to the intelligence.  That, incidentally, is especially true of internet marketing.  Generally, even with segmentation and all the other corny devices dredged up by marketing mavens, internet ads and internet mail appeal to brutal instincts and to the dumb side of human nature.  If you can do away with the schlock, you can turn on your audience and keep it coming back for more.  It’s blasphemy, but we contend that you can bank on the intelligence of your customers.

When you strip off the Emperor’s New Clothes, you discover that companies and bloggists alike fill their sites with triviata the world does not want to know about.  In one way or another 99.44% of all websites are print catalogs stuffed onto the internet.  Everything suffers in translation.  Catalogs, in any event, don’t explore the tremendous possibilities of the internet.  The miracle of Amazon is that it realizes that it is not in the catalog business, and it tries, within limits, to provide you with an online-buying happening.  The duty of the webmaker is to provide visitors with a fulsome experience that is also filled with substance.  The internet is intrinsically a much more interactive world than anything that has come before, and one’s website must embrace that energy.

Lately we have discovered one Christian Michael Sarkar, who has taken this lesson to heart.  His Double Loop Marketing aids intelligent companies to use brainwaves to sell their wares and services to the many knowledge professionals who have real disposable income in the great out there.  You can read about his Double Loop services at his informative blog.  In fact, Sarkar thinks “Shooting Birds and Catching Fish” is a perfect explanation of what Double Loop is all about. His marketing process, when linked with very substantive content, can increase your pool of qualified prospects by more than 300%.

Generally your customer appeals in this over-messaged world should not talk about yourself.  Run-of-the-mill ads prompt your customer’s unconscious to say, “I’ve heard it all before.  There’s nothing new here, and it’s boring besides.”

Instead you should pick a heavy-duty subject to talk about that stirs you and ignites your buying audience because it’s compelling and it provides information smart people find useful.  You want to provide them with a bible full of wisdom that, by implication, says you are worthwhile.  Soon enough they will buy your products and services.  For example, you just might think garden-implement maker Corona produces first class clippers and shears because it gives thorough, useful pruning instructions on its website.  And you would be right.  If you are Volvo, you should provide every tidbit about safety you can muster, as your buying audience becomes ever more conscious of a world at risk.

Up to now, company advertising has relied on brute force, loud noises, and mammoth budgets to ring the cash register and clock revenues.  This no longer is acceptable.  We have entered an era of scarcity where we must do a lot with a little.  To that end, we must substitute smarts for money and manpower.  Jujitsu-marketing permits bantam competitors to upset all the heavyweights.  It uses the force of good ideas and customer intensity to make the sale.  We have been able to help a lot of Davids slay a score of Goliaths with this approach.

Increasingly we notice that out-of-the-ordinary sports managers such as Billy Beane at the Oakland Athletics have employed avant garde tactics that should provide a lesson for any executive.  Oddly enough, the sports business has been developing some leading edge processes that mainstream enterprises would be wise to ape.  See our “Sportsmanship.”

In recruiting, at least, Beane has substituted analysis for intuition and produced wins with what appear to be average players.  The challenge is the same in marketing—to produce home runs even without powerful brand names or stupendous market shares in your stable.  Like our American forbears, we are looking for a “Shot That Will Be Heard Round the World” that does not entail a Pentagon-size budget.  (12/21/05)

25.  Don't Step in the Same River Twice
A Slough of Despond.  If you do step in the same river twice, you are probably putting your foot into a black hole of stagnation, something equivalent to the Love Canal.  And you will come down with all sorts of skin diseases.  Most likely, we should have given this advice in our last dictum on health, called “Dying with Your Boots On,” since so much of the good life springs from staying out of foul places.  That includes polluted rivers and desperate, depressed states of mind. 

Actually, our title is a permutation of Heraclitus’s famous quote: “You could not step twice into the same river; for other waters are ever flowing on to you.”  So don’t try to go into the same river or over the same ground twice.  It makes you boring, and it’s usually impossible anyway. (See www.quotationspage.com/quote/24078.html.)  Time and human experience will not allow us to scramble back into some earlier point in the continuum.    

The First Existentialist.  Heraclitus, by the way, was the first existentialist, even if his nineteenth- and twentieth-century emulators thought they were inventing something new.  If you plough through the spectrum of Greek philosophers, you will find that they pretty well covered the waterfront and that every modern strand of philosophy was anticipated by the boys in Athens and surrounding city states.  We’ve just been adding refinements to their architecture ever since.  In modern times, our task is to remix the ancient philosophical ingredients to deal with an altered world. 

The Company Philosopher.  Years ago, a retiring chief executive told us what the boss can and can not delegate.  Most everything can be given away to subordinates.  But, he said, strategy, the grooming of key top managers, and communication with significant corporate audiences must be controlled in detail by the CEO.  Implicit in this view is that the chief executive is, above all, the company’s chief philosopher and that he must infect both his company and his marketplaces with a coherent body of thought about his company’s reason for being as an antidote to our conceptually muddled times.  The new CEO needs more grounding in the rudiments of philosophy, the like of which they never teach you at business school.  We ourselves have pretty well bought into this way of thinking, and have been at pains to get our clientele to give away many of the chores that don’t pertain to the 3 areas he chose for personal attention.   

The Meaningful Company.  More difficult, perhaps, is the decision as to what a company has to do inhouse and what it can “outsource,” which is the euphemism used for the last 20 years by those who want to buy everything on the cheap on the outside with the ultimate goal of becoming a “virtual” corporation, ideally with one employee.  What can you do outside your walls and not lose your meaning and vitality?  As we have hinted already, this decision requires philosophical clarity that goes beyond mere commercial horsesense. 

Core Competencies.  Circa 1990, Gary Hamel and C.K. Prahalad essayed about “core competencies.”  These are the key strengths of a company which you enhance and do nothing to impair.  In theory, a CEO should ensure that he doesn’t give away any function that would vitiate them.  But that’s theory.  (See http://en.wikipedia.
org/wiki/Core_competency.)  What’s happened since, of course, is that companies have been lopping off cost after cost to stay afloat and to temporarily bolster their stock prices and executive compensation.  The bosses have generally figured out how to narrowly redefine “core competencies” to permit cutting to the core and beyond. So much for 1990s end-of-the-century thinking.   

We suspect companies are giving away the store, as they cut costs and narrow their focus.  The alarm bells went off when we spied a recent issue of Business Week (March 21, 2005), the cover of which blurted out “Outsourcing Innovation.”  An editorial at the back of the magazine—this must be the magazine’s most unread section—warns:  “Globalization is moving so fast that now even the knowledge economy is being redistributed around the world.  A whole new set of winners and losers will appear in the years ahead.  Corporations and the nation have work to do if they are not going to be left behind.”  You don’t have to read this rambling article, however, to know we have stepped in a cesspool or some equine elimination.  Anything about “innovation” is about as core as you can get, and you don’t outsource it. The thinning down that’s been going on has surely become suicidal, corporate anorexia packaged as a glorious makeover.   

Outsource Yesterday, Clutch Tomorrow to Your Breast.  If “core competencies” is, in fact, a squishy concept that morphs on demand, we must work a little harder to say what goes, what stays.  We would counsel any company anywhere to throw today and yesterday off the back of the boat, allowing subcontractors galore a crack at doing known, routine, yes-we-know-how-to-do-that tasks.   But tomorrow is never delegated.  And, by tomorrow, we mean “invention” and “branding,” about which we have said so much in previous letters. 

Invention.  It’s innovation, and R & D, and a lot of things.  Essentially it is the process of coming up with (a) new products and services, (b) new ways and processes of doing everything we do, and (c) new definitions of our company that lop off what’s become vestigial and add capacities that will make us flourish.  Invention is everything we aren’t but want to be, don’t know how to be, and plays to our innate sense that “there’s gotta be a better way.”   

We now live in an age of conspicuous conservatism in which, ironically enough, we are unwinding institutions and ingrained patterns, all in the name of recapturing some mythical past.  This conservative epoch is an age of consolidation (of yesterday), and, as such, it does not foster much in the way of invention.  Schumpter would call this a period of “creative destruction,” although those of a conservative frame of mind would like to think they are preserving, not destroying.  For more on Schumpter, see our Big Ideas, http://en.wikipedia.org/wiki/Joseph_Schumpeter , and  www.pbs.org/wgbh/

All The Rage.  In business and government today, “creative destruction” is foot loose and fancy free, but it is mowing down companies, institutions, cultures, and traditions at a dizzying rate. AT&T, Union Carbide, International Harvester, the old Bank of America, and a host of other giants are no more.  This disintegration is preparing the stage for tomorrow.  But for those who can look beyond it, to 2020 or so, the task is not to destroy, but to invent.  It is this spirit of invention that we hope Sir Howard Stringer will not diminish at Sony, the maker, for instance, of one of the very few laptops in the world which does not crash and burn with frightful regularity.  As he bangs heads together and cuts costs, he could lose sight of the company’s creative destiny, an unfortunate metamorphosis that has long since happened at Hewlett-Packard, once one of America’s premier inventive companies. 

UnWired World.  Lest you think there is nothing under the sun that still needs inventing, simply turn on your cell phone.  Good basic cell phone service does not exist in the United States, and several countries have stolen a march on us on both the content and capability fronts.  Your phone is too hard to use (mimicking the same user unfriendliness we attribute to computers), offers spotty service with horrendous gaps in reception as you move around these United States, and costs approximately twice what it should if  market forces were really working.  The Federal Communications Commission has never given the long-proven concept of  “universal phone service” a thought when it comes to mobile phones.  There is nothing about which our readership complains more than cell phones, not even their crummy cable services.  Widespread mobile is only 25 years old, and it needs to be entirely re-invented, from top to bottom.  Despite all out cell phones and laptops, we’re still not that well linked together.   

Branding.  Hundreds have written us to echo our warning that America’s companies are debranding themselves and their products at a rapid rate—with perilous consequence.  (See “Debranding”; “The World According to Dunk” in Metro, July 2000; and  “Unbranding Next?  The Rise of the Unlikely.”)  Branding—the communication of your essence to everyone from your employees to your customers and even to your competitors—is part and parcel of the organic development of any company.  Neglect it, and you will perish.  If a tree falls in the forest, and nobody hears it, it never fell.  If a company does great things, but nobody knows its name, then it does not exist.  Invention and branding are states of mind that overcome corporate inertia and drive momentum into the enterprise. 

There was an odd contradiction about branding, as practiced in the twentieth century and throughout the whole history of mass manufacturing.  Companies with brands—from Proctor and Gamble to General Motors—wanted to pretend they were turning out something wonderful for you and you alone even though that something was meant to be exactly alike millions of other xerox copies they were churning out for the marketplace.  But no two things are exactly alike.  In fact, we learned from Heraclitus that we can’t step in the same river twice, so let’s not pretend your soap bar or my jalopy are the same.  Somehow the twentieth-century product was suppose to be special, yet it was intended to be like millions of others, and yet no two things are alike anyway. 

Vive La Difference.  True Branding would celebrate the difference between my car and yours, my steak tartare and yours.  It is the enemy of carbon copies.  And, if implemented, it is the friend of advanced economies which cannot compete with the manufacturing costs of the developing world, but which can add economic value through relentless individuality.   

That is, economics and technology now permit us to produce absolute one-offs, of which there are no copies.  One of a kinds.  That exaggerate the differences between my experiences and yours.  Brands of one.   

We know of a Buick Roadmaster 1996 that is like no other.  In fact, General Motors cars generally are not very much alike, because its managers generally foul up the details, and so there is tremendous variance between each vehicle.   

But this 96 (the last year GM built Roadmasters) has character that ranges well beyond GM’s freaky variation. Intentional differences.  It bears a moniker, and we know its number—60082—and that it was completed at the Arlington Texas Plant on March 4, 1996.  Amongst the workers who had a hand in it were Tim “Catfish” Bailey, “Ack” Darby, and Loy “Goose” Preston.  The car has Chevy Impala wheels, providing a much smoother ride, even though the Buick people were not up to making this simple, sensible change.  Other adaptations are coming—a better computer chip inside, different detailing on the outside—since continuous improvement can flourish in an age where it’s possible to have one of a kind.  It makes sense to encourage intentional differences, and parts of the auto industry are already moving in that direction. 

Branding, we would claim, has never been so important, especially to high cost economies.  But it’s much changed in an age where the customer can more truly begin to have the product his way and when the customer either does not believe or does not even hear the claims companies make in old-fashioned advertising and outmoded merchandising.  In fact, the customer of companies of the future truly participates in creating and re-creating the brand.  A different kind of branding is now imperative. 

P.S.  As we have mentioned in several letters, many smaller, out-of-the-way countries are inventing and nurturing genuinely new ideas, because they are not undergoing the consolidation and “creative destruction” endemic in the major economies of the world.  They do not have as much that needs to be wiped away.  For more on inventive countries, see “Falling off the Map” and “In Search of Governing Ideas.”

24Dying with Your Boots on
We’re more than a little foolish to publish a list of rules that supposedly can make you healthier.  Just like all doctors, we only half follow our own rules, and we are probably only 3/4 healthy.  And what are rules worth anyway?  Ben Franklin once set out a bunch of admonitions—ten or so—that, if followed, would make him a virtuous fellow.  He worked on one, two, and three at first.  When he had those down, he went on to deal with the rest.  But, but as he got to eight, nine, and ten, he noticed he was beginning to fall down on one, two, and three.  So, do the best you can.  That’s what we are doing. 

Just like our health, this is a work in progress.  We have fiddled with these health tips for a couple of years, and we will make all sorts of changes when you send in your thoughts.  But the list has gotten a little better, since we have come to realize that it’s no darn good if it seems to be full of vinegar and castor oil.   

At first we came up with 10 do’s and don’ts.  A few doctors looked it over and said it seemed okay.  But lists are something that chaps like Martin Luther pin on doors.  We knew something was missing.  We had to get to the “happy” part. 

That is, health lists and most health journalism, incidentally, are grim reading and made for very robotic people.  Health and happiness must be linked. We simply should not have heart operations if we are to turn into vegetables afterward.  A compassionate oncologist we know in England won’t prescribe treatments for his working-class patients that are too expensive or will make it impossible for them to work.  Any health regime must enable life, not lobotomize the treated.  Too much of a lot of so-called health things, particularly pharmaceuticals and surgery, are often useless and afford us little joy.  Don’t, in other words, become the prisoner of a lot of rules or of the health police.  We’re not on earth for survival, but for exhilaration, a good laugh, and an occasional beer.  

Well, here’s what we think today: 

  1. Find the real risks.  There’s a good chance you’re worrying about the wrong things.  In fact, as musician Bobby McFerrin suggests, “Don’t Worry, Be Happy.”  Years ago a doctor, who knew we traveled a lot, told us we’d never die of cancer or heart disease.  Instead, he said, we’d fail to wear our seatbelt and get snuffed out by an auto accident.  Or we’d walk around in the wrong part of some city and get bopped on the head by some hoodlums.  Our biggest health problems grow out of our life styles and that’s what we have to watch. 

  2. Cut back on your addictions.  We suspect you don’t drink, gamble in Las Vegas, take drugs, or visit with ladies (or men) of the evening.  But we’re pretty sure you are digitally addicted.  You are consistently on your cell phone (threatening other drivers with your driving or bothering other diners with your restaurant conversations), have a TV buzzing in the background at home, and patch right into your laptop when you board an airplane.  A consumer society is very addictive, and many of us are caught up in all sorts of compulsive behaviors.  Find out the odd things you have to give up. 

  3. Eat better.  That largely means more fruit, fish, and vegetables.  And less of about everything else.  More than half the country is now obese: diabetes, high blood pressure and many other such things would fade if we could manage more mouth control. 

  4. Exercise every day for an hour or even five minutes.  Twenty minutes of heart stuff (treadmill, running, walking, etc).  And forty minutes of weight stuff (machines, light weights, whatever).  If you run, take interruptions, since we are beginning to learn that running with frequent breaks is a whole lot better for you. 

  5. Sleep.  The experts seem to say 7 hours, though we can’t tell if they’re talking from knowledge or suspicion.  If you are older, you probably don’t make it through the night.  Take naps (of no more than 1/2 hour duration) as did Napoleon, Churchill, Edison and many other less impressive fellows. 

  6. Get shots.  Influenza, Diabetes, Hepatitis (two varieties), and whatever you find you need where you live.  If you travel, add a few more immunizations, depending on the conditions in the country you are visiting. 

  7. Do the obvious medical things but try to contain the docs.  That means an annual physical, annual dentist, and annual eye appointment.  Accent the obvious cancer tests for breast, testicular cancer, colon, and skin (if you are fair or had a lot of sun overexposure as a kid).  At the same time, remember that about 1/3 of the medical treatment given in this country is probably unwarranted, a result of too much supply and too much fancy equipment.. 

  8. If you can, pay attention to where you live.  That sun in Australia or the Southwest is hellatious, so wear a hat.  Pollution has shifted to the South and Southwest: if you can’t leave, install some filters and work for pollution controls. 

  9. Lay back more often.  Everybody in our society is overscheduled and too prone too compete.  Think about what you can skip.  See where you can avoid stacking yourself up against somebody.  If you are triple Type A, try yoga. 

  10. If you can, avoid hospitals, driving in commuter or heavy traffic, night clubs, all drugs (even the legal kind).  They kill. 

  11. Work on a healthy community.  The interesting thing about health, well- demonstrated in parts of Finland, is that better health rubs off on everyone if the whole community is trying to live a reasonable life.  It’s hard to get thin if all about you are tubbies.  Skyrocketing diabetes rates would plummet if everybody was getting junk out of the diet.  Vote for public, preventive health: cutbacks in public health around the world are leading to sicker people. 

  12. Find some spiritual dimension.  Depression is growing in developed societies, and we have no institutional answers for it.  One absolutely needs to find ways of getting the weight off one’s shoulders. It is not provable, but nurses and doctors have noticed better outcomes in difficult situations when patients have a faith to help support them.  Societies reporting high rates of happiness (Nigeria, no less) are quite religiously oriented. 

  13. Never retire.  It’s a strange custom, dating back to Bismarck or some fluke of our railroad history, that got us retiring at age 65.  If Richard Reeve, paralyzed from the neck down, could keep hyper interested and physically active, you can keep going.  Retired people sit down and then they die.  Get yourself a second or third career, and your mind and body will work better, no matter how badly you have abused yourself.

23Big Beliefs Make Big Men
Great Expectations.  “There is a mysterious cycle in human events.  To some generations much is given.  Of other generations, much is expected.  This generation of Americans has a rendezvous with destiny.” 

These words from Franklin Delano Roosevelt’s re-nomination acceptance speech at the Philadelphia Democratic Convention on June 27, 1936 probably best dramatize what he really did as president.  Here he was asking Americans to ward off dictators abroad and monopolists at home in the name of democracy and freedom.  But most of all, we think, he was once again helping battered Americans regain confidence in themselves and igniting their belief in their future.  Big beliefs make big men; big men galvanize belief.  (See full text at www.presidency.ucsb.edu/site/docs/pppus.php?admin=032&year

The “Rendezvous” phase dated back at least to William McKinley, who was part and parcel of the 19th century and Manifest Destiny, but it was FDR who really brought it to life.  Since then, LBJ, Ronald Reagan, both the Clintons, George the Younger Bush, Jacques Chirac, and others have tried to capture the same words as their own, hoping some of the patrician Roosevelt’s greatness would rub off on them.  

To get a nation, an institution, or a company to believe in itself--that is the task of a leader.  Asking for a “rendezvous,” the leader is not merely calling for a brush with destiny, but is invoking a full-blown tryst, a bonding with tomorrow.  He is asking his followers to seize the future.   

Executive Development.  For half a century, American business has been spending a carload of money on executive education, but nobody quite knows what the outcome should be.  In our own eyes, FDR got it right.  At least in our management practice, executive development is designed to build each executive’s self confidence as well as his belief in his appointed mission on earth. 

That, as Mark McCormack would have said, is not “what they teach you at the Harvard Business School.”  (See What They Don’t Teach You at Harvard Business School).  Business schools, after all, are simply overpriced vocational schools for future business bureaucrats that acquaint teacher and student alike with arcane technique but not with the metaphors to handle uncertain tomorrows. 

The Will to Believe.  Numerous Americans are now having a hard time believing in themselves or the future.  9/11 upset the psyche of Americans more profoundly than either our friends or enemies abroad understand.  It has been followed by an unending string of severe job layoffs at America’s major corporations that show no sign of letting up.  These are troubled times, not so unlike the 1930s.   

Senior executives, no matter their degree of bluster, have shown increasing insecurity for a much longer period of time.  The long restructuring of our economy, not yet complete, started in the 1970s, and they still cannot foresee the outcome or divine what strategy to adopt for their own enterprises.  This has only compounded the stress they have felt as they climb the corporate ladder where they have found oxygen in short supply and the perch uncertain.   

In this tremulous atmosphere, executives must achieve the “Will to Believe.”  This is the title of one essay by William James, who was a father of American Pragmatism, this country’s unique contribution to world philosophy.  Here he argues for faith in the absence of clear evidence to support it,  and elsewhere he goes on to claim that the power of belief is critical for advantageously dealing with a future that is malleable and plastic, capable of being shaped by men of conviction.  James, incidentally, was a troubled, insecure spirit in his own right who worked his way forward through affirmative philosophy and psychology.  Executives, we would claim, are not capable of leadership until they attain a similar degree of assured belief. 

Real Role.  The wacky, outré, gay wit Quentin Crisp said that we call young actors adventurous and experimental because they try on all sorts of roles that are largely ill suited to their own personas.  Finally, later in life, they discover their one true role which they play brilliantly, no matter the part in which they are cast.  Then we call them accomplished.  It is the same in life he thought:  each of us spends decades discovering our one true role.   

That’s the other main educational task for senior executives.  They must comprehend the role they really should be playing. 

One of our clients spent his whole life as an accomplished engineer at one of America’s largest corporations.  We worked with him and watched his slow transformation as he worked his way towards retirement.  What happened is that he became an outplacement counselor for senior Fortune 500 executives, a 180-degree career switch where he performed gloriously.   

It had always been evident to us that Ed was intended for other things.  A French TV producer, now a New York restaurateur, had done a feature on him for French TV.  It was evident to the talented Parisian and his audience that this absolutely charming, mannerly, totally kind man should be dealing with people and not equations.  If we are truly to pursue our destiny, such dramatic changes are in store for us.  The writer Arthur Koestler dramatically threw over successful careers two or three times, which not only brought out his talent but saved him from being a victim of the Holocaust.  One can read about this in his marvelous two-volume autobiography Arrow in the Blue and Invisible Writing.  All our lives, said Crisp, we are discovering what our true role is.   

Fanatic About Change.  Lately we have been studying serial entrepreneurs largely to find out why they do what they do.  Time and again, we discover that these fascinating folks pursue something new because they can’t bear it that the world is doing things in such a bumbling way.  They are irked beyond belief that hospitals kill so many of their patients; that surgical tools, designed around 1915, don’t really do the job, that the window crank mechanisms inside car doors are so complex that they are doomed to fail; that Microsoft software is certain to crash.  They know it can be done better and know they can do it.  In other words, they believe they can change the world, and there’s no stopping them.  We suspect executive education should convince its pupils to find something they really want to change. 

What is Destiny?  We have said that the goal of executive education is to teach future leaders that they and those that they inspire have a Rendezvous with Destiny.   

But what is destiny?  It’s a culmination beyond the ordinary and the pedestrian.  The very concept of destiny argues that there is a god or gods, because it is an outcome and magic event ordained somewhere in the heavens.  Destiny is the handiwork of the gods. 

Several of the more fundamentalist religious sects around the world would say that Western societies have trivialized life, falling totally under the domination of the passions of man, avoiding the dominion of the gods.  If this is true, it presents a monumental problem for countries that are overwhelmingly secular.  Is he who is not pointed at metaphysical truths a slave to mediocrity?  Probably there is no rendezvous with destiny for those whose feet are stuck in mortal clay.  Is this why the postwar generation of leaders in politics and business has never quite achieved greatness?  

We are not saying, of course, that conventional religion lies at the heart of greatness.  Rather we would assert that people of destiny sense that most awesome events in the universe only regard mankind as a footnote.  John Roebling, tireless worker and creator of the Brooklyn Bridge, only allowed himself one diversion--the study of the philosopher Hegel, who had been a mentor in his youth.  We would venture to say that his appreciation of Hegel’s dialectic equipped him to tackle monumental projects about which the rest of us can only dream.  Hegel, incidentally, had encouraged him to come to America.  Some of this unfolds in the historian David McCullough’s best work, The Great Bridge, which depicts the breadth of Roebling’s undertaking.  It remade New York City, just as Tip O’Neill’s Big Dig (www.bigdig.com) is redoing Boston.  

Curiously enough, Tony Blair of Great Britain and Juichiro Koizumi of Japan, who have shifted government away from faction towards some of the broader concerns of their societies, may have reclaimed that higher ground where destiny can come out of hiding.  Ironically enough, they were perceived as standard political hacks by the pundits when they first came on the scene, all proving we never know who will be destiny’s children. 

P.S.  Keeping Up.  Today’s too busy executives have an ever more difficult time keeping up with changes in business thinking.  Several services now provide them with extracts on breaking thought.  One, www.meansbusiness.com, is particularly geared to corporations which are trying to carry on in-house corporate education for executives. 

22. Don't Worry about the Copperheads: The Big Bear Will Get You First
Friend Bill of Madison County taught us about the copperheads.  As poisonous snakes go, they're not that venomous.  But the black or brown bear.  Now that's serious business.  It will leave you feeling the worse for wear.

In everyday commerce, it seems to be our destiny to pay attention to a few snakes slithering through the weeds.  Meanwhile, we miss the big hazard or the big opportunity, more often than not, because we fall in love with the sideshow.  For leaders, the main issue, perhaps the only issue, is to discover the big one and to get the troops totally focused on it. 

For some 10 years the overwhelming problem for major businesses in this country has been flat or declining markets.  Supply-side economics have produced too much product and too few customers.  Every time you turn around another market hits the skids, even if just yesterday it was growing like topsy turvy.  Most dramatic over the last year has been the dead-end hit by telecommunication carriers and equipment companies.  Suppliers who had been in the fast lane for years suddenly started showing red ink.  This devastation and lack of demand has hit all markets as we sail into the new millennium.

Peter Drucker has noted that in the face of business calamity we have been replacing chief executives at a mad rate, and most of the replacements do as badly as their predecessors.  We have not seen such a high management failure rate since the Civil War, when Lincoln had to fire a host of field commanders until he could find one who would fight.  Drucker thinks our business structures are outdated, and chief executives are still caught up in an old model that isn't working.

That may be true.  But we attribute the failure rate to a tired agenda.  For 20 years, CEOs and their consultants have been hacking away at costs.  That played pretty well until the mid 1990s.  But then it was time for CEOs to get back to revenues, selling things, new markets.  Even so, today you find CEOs cutting and chopping, paring their now-virtual companies down to nothing.  It's time to do business again.  Having missed the big one (finding new markets) in 1990, a host of major companies risk extinction today.  They are at risk because they did not turn to the main opportunity circa 1990.

We can ask why principal leaders didn't see and pursue the big one.  Often it's a lack of imagination.  One of our partners talks about former Governor Edwards of Louisiana, who was once matched against a car dealer.  He damned the man with faint praise.  He said, "Well, if I were going to buy a Ford, I'll surely buy it from him, because he's a good man.  But if I were going to buy 2 Fords, now that's another matter."  The dealer could measure up to little league baseball, but not to the major leagues.

Much the same can be said for one of our United States that was once the bright star of its region.  It has now slid a long ways, currently experiencing negative growth.  The politicians and business potentates have all sorts of excuses and all sorts of forces to blame.  But the truth is that a business oligarchy of very small men coupled with diminished political leadership has left the state in the hole.  Artificial monopolies and restrictive legislation have driven costs too high.  Anemic leadership has not filled empty plants and barren fields with new enterprise.  A venture capitalist in this state has said to use, "We always do two baggers, never a home run."  Nobody has had their eye on the big one, and now the whole state is at risk.

Complexity, incidentally, is the enemy of focus, of effectiveness, of strategic grandeur.  The planning documents of more than one corporation are so infernally complicated that they never get enacted and fail to unify the employees behind a compelling idea.  Years ago Norman Augustine, once of the Defense Department and later head of Martin Merietta, authored Augustine's Laws, the key one being that as more and more electronics were added to a plane, costs grew exponentially and breakdowns mounted at a worse rate.  Six ideas are equivalent to having no idea: complexity brings us to a standstill, not only with airplanes but with whole enterprises.

A few years ago Tony L. White took over PerkinElmer Inc., a flagging instruments company.  Somewhere along the line he said, in effect, "Let's get rid of the old instruments and get in the genome business which our instruments help explore."  This was big and daring and clear.  Now he heads Applera Corporation, the PerkinElmer name and all its instruments long-since gone.  What he did was seize the obvious, using the technology from its Applied BioSystems subsidiary to spring into the world of the genome, and now into drugs.  He has moved from copperheads and to bears. 

Which is to say: Become a big bear, so no bear will get you.  You will get there, if you are looking for something big, and you can say where you are headed on the back of a napkin at lunch with a felt marker.

21. Stealing from Stanley
If you are to succeed, you must realize that you will have time to invent very little, so you had better steal, occasionally with credit, a lot of good ideas.  We recommend, for instance, Marcus's Laws on Principles Not Taught in Business Schools.  See Quest for the Best, p. 220.  Our favorite is, "Never underestimate the value of luck, but remember that luck comes to those searching for something."

20. The Emperor’s New Clothes, or Seeing the Blindingly Obvious
When we were all growing up, we could read essays and stories that were fun and without highfalutin social value.  More than one schoolbook collection of tales included “The Emperor’s New Clothes.”  A silver-tongued tailor spun robes for the king out of nothing more than words.  Putting on this garment, the emperor stepped out amongst his courtiers and then his subjects.  There were nothing but oohs and ahs, admiration for the king’s raiment coming from all the populace -- till a young child shouted, “He hasn’t got any clothes on.”

This is what we need from our Boards of Directors: to say, “he hasn’t got any clothes on.”  The nuanced conversations of corporate life often permit harebrained schemes to flourish.  Everybody says this or that idea is wonderful, when there is no there, there.  What Boards have to do is spot the emperor without clothes.

What kind of people are good at detecting horse manure?  What will help them see the light before a crisis occurs?  Where are companies must likely to go astray?  How do you look for the obvious?

l.  Ex-presidents make good board members.  To help and instruct a chief executive, the Board needs to be dominated by chief executives.  But those who are running companies now are too busy and too self-absorbed to be useful.  A CEO just retired has become wise enough to be valuable; four years into retirement, he will have lost his edge.  But the right man or woman, just off the hot seat, talks from real experience and will not indulge in irrelevant observations often spouted by lesser directors.  John Welch is a useful director right now -- for about 4 more years.  Keep at bay the bankers, venture capitalists, Senators, technological whizzes, and average academics -- unless they really have truly diverse backgrounds.

2.  A tribe is about the right size.  A tribe is 12 or 13 people.  After that your board loses the ability to act like a guerilla band, to communicate by gesture and informality.  Board communication is bad anyway, and companies have to create many devices to get people to chat beyond the once-a-month or once-a-quarter meetings.  Committees don’t work -- communities do, and that’s what a board must be.

3.  The job is risk management.  What we want out of boards is risk management, but not paranoia.  We need an intelligent and collective reading of the risks a company faces, and some intelligent planning to deal with those risks.  We mean “risk” to be taken broadly -- not just immediate financial threats -- but strategic problems such as declining markets for buggy whip companies as horsedrawn carriages go out of fashion.  Because directors fret over their own liabilities and because of the ever-present shareholder lawsuits, the directors will often focus on the mundane.  Do scenario planning, Shell Oil style, to get the conversation directed at mega-risks.   Shell, you will remember, was the only major oil company ready for the first oil crisis, because it had done the imagineering necessary to get ready for awkward events.

4.  The big risks have already happened.  Just a few years ago, the World Trade Center was bombed: it was sure to happen again.  North Carolina had horrible floods a couple of years ago: they will probably come again in the next 3 years.  Airplanes have been under attack by crazies for 20 years: we will see more of this.  Directors should know that recent major crises will probably reprise.  Once-in-a-lifetime events will re-occur before the decade is over.

5.  The worst disasters will occur in a highly profitable, unwatched sector of the business.  Years ago, Marsh & McLennan, the world’s largest insurance broker, traditionally a profit machine, took an earnings blow because its excess cash flow was poorly invested in overnight markets that were risky, all done by an improperly supervised overeager treasury employee.  Most recently, American Express has hit the skids, because its Minneapolis money managers got it terribly over-committed to junk debt.   These financial service companies -- transaction-oriented -- both were surprisingly inept at managing their cash.  But, to be fair, this “shoemaker’s children” phenomenon happens again and again.  Today’s diverse, complex enterprises are generally overlooking a key part of their core business.  It is their Achilles heel, Trojan horse, or whatever.  Directors must look at the core and find the flaw that will savage the organization.

6.  Weak boards destroy perfectly good chief executives.  Chief executives pick weak “yes-men” to people their boards.  This works out well enough in good times, but horribly in bad times.  The “rubber stamps” run out of ink in a pinch.  That is, the weak board members lose their nerve in bad times, and they will turn on the beleaguered CEO.  Stronger board members, even if a bit vocal at times, will stay the course with a CEO who has simply run into misfortune.,

7.  Beware of tap dancers.  The Conference Board’s 2001 Annual Report contains an essay by Jim Collins entitled “The Misguided Mix-Up of Celebrity and Leadership.”  It argues for self-effacing but very directed CEOs, versus the showboats.  The implication, at least, is very pointed for boards dealing with succession issues.  That is, it hints at what kind of directors or chief executives boards should want.   In fact, these are strategic times when there is little upside, and a lot of downside, to opportunism.  We need a bit less sizzle, and a lot more beef in our steaks.  It is time to look for gravitas in our leaders.  Can a board designate or CEO-candidate stop looking in the mirror long enough to look 10 moves ahead?

8.  Why corporations?   Every claptrap commentator happily says corporations exist to create “shareholder value.”  This is utter rubbish.  Right from the start, joint-stock corporations were creatures of the state, given special privileges with the understanding that they would enhance the glory and wealth of the state and the society that created them.  Boards should know they exist to expand the health and prosperity of their nation -- and all nations.  Shareholder value is a wonderful byproduct of the purposeful corporation, but it is not the main goal.  As it happens, companies with a larger mission probably do better and live longer.

9.  Use the garbagemen.  Years ago some very talented West Coast painters of our acquaintance would invite the garbageman in to get a frank appraisal of their works in progress.  To get an honest opinion from somebody who knows his own mind.  A good board will find lots of garbagemen to enliven their dialogues.  Garbagemen will strip off the emperor’s new clothes.  The market research people call this using a “delta.”   Anyway, you have to tap into plain-speakers and plain thinkers to guide a company well.

19. "What we're saying today is that you're either part of the solution or you're part of the problem."
We first heard this refrain from Eldridge Cleaver in 1968 in times that really were more pubescent than revolutionary.  Despite all the heated rhetoric, not all that much changed back then.  As Dr. Bruno Bettleheim hinted, the sixties were more of a confusing quest for personal identity than a battle to re-order society.

But Cleaver's words are still dead on, having more application in the present day than in the years of Camelot and LBJ.  The times now, they are a-changin', and you are either helping your fellow man get with the program, or you are condemning us to yesterday.  To help, you absolutely have to have a wildly different mindset.

In our Annual Report on Annual Reports 2001, we discuss the rapid turnover of chief executives of America's major corporations.  But, we note, the new boys on the block are still pursuing a tired, outdated agenda of cost-cutting, consolidation, and centralization.  In other words, they are still in the useless restructuring, short-term profit mode of the 20 years.  You know.  EVA, MVA, and don't invest in anything unless it is a sure thing with a 3-year payoff.

In our reports 2000 and 2001, we suggest that the current orientation should be growth and globalization achieved through alliance-building.  This means new products, whole new definitions of what a product is, more headquarters located where economies are actually growing, and an end to go-it-alone attitudes.  Solitary splendor just won't cut it; interdependence is in.   This is not comfortable territory for leaders in any of our estates -- business, government, academia, or media.

How then do we get out managers to become leaders?  By the way, leaders are relentless fellows who plant both feet in the future and then trick everybody else into coming along with them.  Managers implement yesterday.  Leaders welcome tomorrow.

This suggests, first, re-reading William James and the rest of the American pragmatists.  Pragmatism was America's one unique contribution to philosophy.  The American pragmatists were in love with the future.

But such a re-reading will not take men and women stuck in the 20th century into the cosmos of the 21st.  It is our experience that effecting change -- particularly a change in consciousness or mindset -- requires a profound emotional event.

The events of September 11th have already altered the way the people of the West look at the world.  Malcolm X's visit to Egypt rocked his view of the races, allowing him to see that virtue was not a black and white matter, but a function of morality and enlightenment.  We read of others transformed by nervous breakdowns, religious awakening, or some whack across the forehead by a mental 2x4.

The majority of leaders do not, however, come into being because of charismatic experience.  A great many, it appears, do develop because of something akin to Stockholm Syndrome. 

The Syndrome, you will remember, stemmed from close experiences of the 3rd kind between captive and captor in Sweden.  In some accounts, bank robbers became uncommonly close to customers and employees at branches being robbed.  In another tale, hostages of an embassy bonded with Japanese Red Army members who had seized them.  The consciousness of people under extreme pressure changed as they formed unlikely links in dire circumstances. 

As we chat with executives on the run, we find that they change markedly through the workings of a Socratic dialogue that is interspersed with their rapid-fire activities.  Dialogue on the run.  Contemplation at 165 mph.  A provocative roller-coaster ride.

The temptation is to look inward and backward.  The goal is to lunge forward and outwards.

18. Seven Not Eleven--But Seven That You Can Spell
About ten years ago, at a lunch with the managing partner of a major accounting firm, I mentioned to my host that we at William Dunk Partners spend horrible amounts of time decoding, with our clients, what seven numbers they should use to run their businesses.  He said, "I wish I knew what our seven are."  Needless to say, we did not advise him to try competing with us.

Point One.  You can only watch seven.  The mind cannot get its tentacles around more indicators.  You are just fooling yourself if you think you can systematically monitor and understand the implications of more numbers.

This idea carries over into strategy as well.  You can only manage seven initiatives.  When you try to run more, they run away with you.  You start reacting to events instead of guiding them.  With seven or less, you can actually drive your company somewhere.

Politics aside, this is the central dilemma for Vice President Gore.   He tries to be on top of everything, which is equivalent to being on top of nothing.   This, indeed, was the great discovery of William James and the American Pragmatists.  To do meaningful things, you have to take on the universe piecemeal.   Otherwise, thought and action get fuzzy.  Piecemeal, action-oriented thiking is, incidentally, America's great contribution to philosophy.

Point Two.  But you must pick the right seven.  And they are not self evident, unlike the self-evident truths cited by our forefathers.

Going back to the accountants, we have discovered in the last ten years that public accounting numbers tell you practically nothing about the health of a business organization.  Up through the 1900's, accounting focused on the needs of management, but now accountants really generate numbers for investors and other external publics.

In fact, most of the numbers we use to truly understand a business are not really in the accounting lexicon.  In a knowledge business, we have to study the recruitment, development, and retention of knowledge workers.  Small businesses have to watch net-working capital, an adjusted working capital figure which embraces predictive figures, particularly on the cost side of the ledger.  To understand where a business will be in three months, we must chart some sales activity minutia usually ignored by high-level marketing and general managers.  Finally, we really have not found useful ways to measure R&D effectiveness, although that is the key issue for business in our transition economy.

What should your seven numbers address?  Probably three will touch on current operations.  Two will try to predict where you will be in six months.   One will measure your strategic progress.  And one, importantly, will deal with risk management. Well, we said the seven will not be easy to decide.

But the chore is to find seven simple indicators that everybody can understand.  Apparently Will Rogers had it right.  According to Randy Poe, Rogers said, "Nothing you can't spell will ever work."  The way to deal with complexity is to measure seven simple things that you can spell.

17.  MTV Plus Cops and Robbers
When two guys out for lunch put together Miami Vice, they wrote the idea on the back of a napkin: "MTV plus cops and robbers."

We always argue for short and sweet plans--the shorter the better--because, because, because.

Because complicated things never work for long.  And complex things run people, instead of people running them.

But--today--there's a more important reason to keep it simple.  We have had fifteen years of incrementalism in business and politics.   We need big things now.

Big things don't come from long, detailed plans.  They come from big ideas set out in ten words or less.  If "vice" can be put together with five words, surely we can do "virtue" in ten.

16.  If the Doc Can't Get It Straight, He Will Make You Crooked
I first cottoned onto this idea ten years ago on a visit to a Houston oncologist.   I spent half-an-hour telling him the gory and cheery details of my medical history.   He recapped it all brilliantly in an eight-minute summary.  Without a doubt, he's the sharpest doctor I have ever visited.

There you have it.  If you visit a doctor of any stripe who can elicit and sum up your medical history, you have a winner.  If you get one who goofs--and many do--take a walk.

To understand the relationship of medical histories and the physician's effectiveness, see "Patients are Discovering 'My Doctor, the Author,'" New York Times, August 22, 2000, D7, where Abraham Verghese, author of My Own Country: A Doctor's Story, spells it out:

To me, they're a seamless enterprise.  I'm really struck by how much of what I learned in medical school has helped me to be a writer, and how much of what I learn as a writer helps my thinking as a physician.  They are very parallel disciplines.  When you take a patient's clinical history, what is that but a story?  What makes a good doctor is that he or she takes the story down well, sees the links and makes the connections toward a diagnosis.  That's also what writing is about.

One other caveat.  You should prefer a doctor who does volunteer clinic work with the poor.  This means that he or she sees a full range of disease conditions, knowing anything and everything that can go wrong.  Years ago, several great New York specialists would go up to Harlem Hospital for clinical experience, helping a lot, but learning more.  In the same manner, a Naval dentist says he saw diseases in the mouths of Vietnamese soldiers during the 70s that never made it into the books.

15.  If You Believe in Yesterday, Your Stock Will Not Act Like Tomorrow
Why isn't your stock going higher?  Because you believe too much in yesterday.  Here are a few of the outdated myths that cloud our vision and cripple our tongues, leading worthy CEOs leading valuable franchises to get no respect.

Likewise, many enterprises have plateaued out, because they are stuck in yesterday's mud.  They need to get beyond EVA and MVA to TVA--Tomorrow Value Added.

1. Stocks Are Bought Not Sold. Once upon a time we said industrial products were bought not sold. Now we have brushed that aside. Because of some nonsense called "efficient market theory," we have come to think a mysterious god of fair-pricing rules the marketplace. And yet arbitrageurs continue to make a wonderful living because financial markets are so inefficient, and companies without assets, earnings, or transparent financial statements enjoy remarkable valuations.

2. Wall Street Gets Your Stock Sold. And yet it's an open secret for IPO candidates that the chief executive--not the investment banker--sells the deal. While Wall Street contributes to the price of stocks, it has lost much of its market power. Ask Donald Marron, the extraordinarily able chairman of Paine Webber, who sold his company to DBS because he couldn't put any oomph in his stock price. Companies cannot delegate their stock prices.

3. The Internet and the Worldwide Databases Tell It All. The feeling is that everything is out on the Internet, so a company's communications really add nothing to the investment process. As it happens, all the information is scattered about and much of it is inaccurate. Corporations need to provide a central, deep clearinghouse on themselves to dominate the information stream and to drive out all the bad stuff that is nesting in worldwide databases. Just read Yahoo's chatboards about your company, and you will realize you need to provide overwhelming, comprehensive data and interpretation about your company.

4. The Annual Report is Dead. Then why do John Welch and Warren Buffett--respectively, the best CEO and the best investor of the last 25 years--lavish so much attention on their reports. Do they think they're wasting time?

5. The Internet and the News Services are Reaching Everybody We Have to Touch. That's a lazy man's answer. In fact, they do a pretty good job of reaching a narrow band of financial institutions. They miss global financial centers, much of the financial media, individual investors, a multitude of investment advisors, etc. Distribution of corporate data must be very widespread and very provocative.

6. The Individual Investor Does Not Count. Ten years ago that was true. Now the individual is important again and has become the catalyst for stocks during many trading weeks.

7. Ultimately Value Drives the Price of Stocks. Well, yes and no. It depends what you mean by value. Increasingly, we are affording less value to tangible assets and more to a complex set of intangibles vaguely called intellectual property--including patents, strategic alliances, core processes, brands, and service capabilities. Our assets and our tangible products are treated by investors as rapidly depreciating commodities. The problem and opportunity for companies is to codify and measure intangible values--tasks for which our auditors are ill-prepared.

8. Investors Value You on What You Deliver Today. Not the bright ones. Either they pay up for what you have delivered over the last 5 years ("the value boys") or they reward what you'll deliver for the next 5 years ("the growth boys"). Tactical communications--focused in the year just past or the year upcoming--create very little investor value for corporations.

9. Investor Conference Calls Help Sustain Stock Price. No, they help sellside analysts do their updates. The data given does not create buying decisions: it sometimes creates a "sell" decision. Some companies, in fact, circumvent a lot of the excruciating activity associated with such calls by publishing better long-term data. With recent SEC tendencies, companies will gradually be forced to open calls to journalists and other interested parties, further eroding their investor value. You must resort to detailed electronic profiling.

10. The Financial Markets Value a Combination of Return on Capital and Growth in Invested Capital. In theory. But, because the chaps who run markets get paid for creating transactions, they value your company's perceived transactions. Your value often arises from the perceived transactions you will create. Ford Motor is trading on that, demanding quid pros for the amount of the transactions it creates annually. This is the interesting dilemma--for the corporation to recapture more of the transaction costs that it is now sending to its various agents in various marketplaces.

14.  Diminishing Returns
One of the deep pleasures and pains of my consulting career has been advising management consulting firms, big and small.  Often they're peopled by brilliant and sometimes creative intelligences who should be able to pursue the good, the true, and the valuable.  But bright people--without moral training, psychological catharsis, practical exposure, and strategic orientation--cancel each other out.  Then they don't amount to a hill of beans. 

We were reminded of this most recently in an article by George Johnson, entitled "The Jaguar and the Fox," in The Atlantic Monthly, July 2000, pp. 82-90.  It is about the utterly brilliant physicists Murray Gell-Man and Richard Feynman.  Gell-Man, favored by the author of this article, was clearly the more strategic thinker.  Feynman--the fun guy and the intuitive tactician--achieved far more fame.

They were friends who succumbed eventually to competition and jealousy.  And here's the main point.  "The friction between them prevented the kind of alliance that might have led to even greater discoveries--great enough, perhaps, to satisfy these impossible men."

Indeed, this is the question in modern society.  Do we have the power to set ego aside when we are working with fellow beings of magnificent dimensions?  It's easy to be gracious with lesser folk, but it's hard to be open to strong-minded colleagues.

13.  Let a Few Weeds Grow
Years ago, I had the pleasant experience of dealing with an English professor named William Wimsatt, who was in a class by himself in the field of criticism.  Never since have I read or heard of any critical mind in the field of literature who was his equal.

A tall, gangly fellow, always lugging a briefcase, Wimsatt had a continuing argument with a merry little bubble of a chap named Dick Banks, who was a publicist at the university and who typed faster than you or me--with two fingers.   Banks, on the side, was a father-figure to a multitude of budding poets.  Wimsatt only wanted the best of things published.  Banks wanted it all published, because he said we were never sure what was best.

Then, I stood with Wimsatt.  Now, I'm with Banks.   Rarely do the powers-that-be pick out the best or the most important.  And, by the way, Banks was a clear writer and a competent poet, while, oddly enough, Wimsatt was a master of absolutely awful, dense prose.  See William Wimsatt:

As often as not the system we create to guarantee excellence and strength produces the humdrum.  I am reminded of that in reading the New York Times, the nation's second-best newspaper, everyday.  Surely the paper prides itself on its political, economic, and business coverage--all of which is less than meets the eye.  It is at the margins, beyond the reach of the editorial  system, where the newspaper excels, largely in its oddball cultural features.  On May 29, a book review of Biography of a Germ by Arno Karlen (the Lyme Disease story), turns out to be relevant, important, and well-written.  A London piece, "Finding a Real Job for Philosophy," about Alain de Botton, the author of The Consolations of Philosophy, speaks to a readership polarized and atomized in a society without a larger purpose.   It is in these little stories, not on the top of the mind of the publisher or the managing editor, where something extra shines through.  These are weeds, if you like, in the Times.

Let a few weeds grow.  Metaphorically, they may turn out to be the ingredients of a cheap, natural pharmaceutical beyond the notice of research scientists.

A defense electronics company I have followed for years never amounted to very much before it strayed into producing components for the cellular-phone industry.  All venture capitalists I counsel know that each enterprise in which they invest will become totally different in two years if the enterprise is to succeed. And, of course, who would have thought that GE's credit operation--GE Capital --would be the absolute core of America's premiere industrial enterprise circa 2000.

Letting the weeds grow is probably what innovation is all about.  At their greatest moments, 3M and Hewlett-Packard were probably the biggest weed patches around.  So our test as managers is to keep enterprises totally focused, while undoubtedly fostering massive amounts of distraction.

12.  Every Avis Needs Its Hertz: Or, Why We Need Enemies
Some twenty years ago, when I advised Avis Rent-A-Car, I learned how badly Avis needed its Hertz.   Hertz, forever it seems, has been Number One in the rent-a-car business, with Avis second. As Avis crowed in its ads at the time, "We're Number Two, so we try harder."  And they did.  Most tangibly at that time with better computer reservation systems. 

And with somewhat more agile leadership.  Colin Marshall -- later of British Airways fame -- was the president.    Before him, Robert Townsend, author of Up the Organization, was the leader of Avis.   Interesting it is that none of us can remember who has ever headed Hertz.

When we know our enemy -- in business or politics or education -- it energizes us to win and prevail.  It makes us discover a decisive difference -- in strategy, values, process, and people.

It even tells us whom we have to emulate and which knowledge we have to steal.  If you prowled New York in the 1950s and 1960s, you discovered that the Japanese knew they had to steal, emulate, and beat us at the economic game.  And they were hard at it there, absorbing, for instance, the principles of our most brilliant business school gurus -- Drucker, Juran, Deming, etc., then at New York University.  When they no longer had much to learn from us, they lost their enemy and began to falter.

Oh how we have fallen now that we have won the Cold War, and the Soviet Menace seems to have disappeared.  We don't know who the enemy is from day-to-day; almost any nation seems to fill the bill at any given moment.  Without a clear enemy, almost every American of any political stripe feels our moral fiber is disintegrating.  Each American likes, supports, but deplores a president who is a bright opportunist, pandering to his and our momentary desires, while visibly undermining our stature and effectiveness abroad.  The nation has a full stomach, a more dangerous world than when the Soviets reigned, and no clear goal to keep the nation vital.   Mr. Clinton must look in the mirror, and after the manner of Pogo, reflect, "I have met the enemy, and he is me."  The enthusiasm for Senator McCain points to an electorate who would like to be fighting a real battle with a substantial enemy.

A Georgetown professor, when asked who is winning in the tussle over Elian Gonzalez, "Democrats or Republicans," said, "Neither.   Castro is winning." Whether we deal with Cuba, Serbia, Iraq, Russia, China, etc., etc., we snatch defeat from the jaws of victory because we can't focus on the enemy.   We fritter away our attention on tangents and dodges.

Sun Tzu, a legendary Chinese general c. 500 B.C., originated the philosophy of victory through knowing your enemy in The Art of War; his strategies have been adapted to a range of modern purposes, including business and marketing.  Peruse this classic of Chinese literature online. 

11.  The CEO's Office: You Are Where You Are
In Spring 1988, in our publication First and Last, we talked about the chief executive's office at great length.  Here are some tips we gave CEOs trying to get it right, which are still very current, although we don't know whether Gold Fields still has its premier space at 230 Park.  Even in this virtual age, place still has a lot to do with how we think and act.  William Whyte and a bunch of Swedish planners told us years ago that our day-to-day context radically affects our chances for success and happiness.  Here are our thoughts.

10.  Paying to Lose
At least half of all incentive plans motivate bad performance.  In First and Last (Summer 1989), we wrote about incentives in an article entitled "Carrots and Sticks: Incentives That Work."  But we also talked about all the ways companies incentivize employees not to win in "The Bottom Line: How to Take the Incentive Out of Your Incentive Plan."  Here are the top ten:

1. Restrict the real loot to a few top managers or hotshot salesmen.  Your other employees know these players don't have a monopoly on brains, talent, hard work or performance.  This results in rollercoaster corporate performace.  Wall Street firms demonstrate this tendency in spades.
2. Fail to set tough numbers and tight objectives for your top five guys.   Then they will develop equally silly, make-believe objectives for their subordinates.
3. Send your employees off in six directions.  Lots of plans have lots of objectives with approximately equal weightings.  The goal is to state one key objective that accounts for 50 to 70 percent of an individual's extra compensation in any one year.
4. Pass out rewards when the company is losing a potload of money.  There's only one bottom line; everybody must relate to it.
5. Over-reward gunslingers; over-reward organization men.  The trick is to force everybody to be heroes and team-players at the same time.
6. Give out dinky incentives.  If people make it, they have to make lots (30 percent or more).  And if they don't, they have to lose big.
7. Measure your top managers by one-year objectives alone.  Short horizons get short-term results only.  You have to get long numbers in front of key managers, making sure they stay in their jobs long enough to enjoy the fruits and the pain of making long-term goals happen.
8. Put good guys in a rut.  Overstay old objectives.  Every few years you have to shake up the lives of your good people.  This means a major change of objectives when possible.  Good people can go stale doing the same things too long, even if they're making lots of dough.
9. Delegate the job of setting objectives and incentives. You know what has to get done and what your key people need to do.  Your bureaucrats should not define jobs or incentives.
10. Bungle the compensation of key players. Typically R&D guys are poorly rewarded.  Even worse, Johnny-come-latelies are overpaid relative to experienced hands.  A line head at a Japanese company may have worked in that unit for 20 years; his counterpart in the U.S. may have worked in his unit (or industry) for 3 to 4 years.   If you pay up for the experience curve, you will simply perform better than your competitors.

9. The Urgent Always Swallows the Important
Over the years we have advised many of the nation's leading consulting firms. In each we've run into the consulting paradox.  Their lead partners inevitably are superb tacticians and lousy strategists.  They're good at navigating around a lot of potholes, but they will rarely get us rolling on the main highway.

In a recent review of William Murray's Janet, My Mother, and Me (Simon & Schuster, 2000), a critic notes Janet Flanner's regret that she "had thrown away her talent through her devotion to churning out the Paris Letter year after year" for The New Yorker.  Always competent, these columns still probably did not represent the best Janet Flanner had to give. 

The movie Wonder Boys stars Michael Douglas as a writing professor in Pittsburgh who cannot get his second novel out the doors, even though he faithfully beats out a thousand pages on his treasured Model A typewriter.  He's too caught up in pedestrian relationships and academic quicksand to create the next big one.  (Click here to read a review at Reel.com.)

Mired in trivia nationally, we lack a foreign policy and find that we are exposed dangerously as a nation in ways not seen since the Cuban Missile Crisis of the Kennedy years.  Healthcare threatens to consume 25% of our GNP, and we get a bit sicker.  And out politicians debate about Bob Jones University, Catholicism, and Buddhist Temples.

Why does the urgent, and often the trivial, dominate the important?  Why do we do business and life on the run -- by improvisation?   Certainly there are a thousand causes. Personal technology from cell phones to PCs gives us no time to think; my old friend Jim, a stockbroker no less, keeps phones out of his car so he can think a bit as he works his way down the peninsula.

Likewise, everybody in the family, now with two wage-earners, is nearly twice as busy and enjoying it half as much.  Schoolchildren are much over-scheduled, every course crammed with unfocused content, electives such as music elevated to the status of core subjects, and sports taken so seriously that we find children having lots of remedial work done at the bone doctors.  We make sure that there is no time to focus.

My own answer to the question somewhat begs the question.   In my own view, mediocre leaders in business and society propel us to focus on the trivial.  In business, at least, we find that there's a domino effect where small thoughts beget small actions.  It's hard to get to the main point when, all about you, the focus is on the next presentation for a board meeting, a cosmetic recapitalization for Wall Street, or a merger with an entirely irrelevant business.   So we say, "The Urgent Always Swallows the Important," when the leaders are so much smaller than the tasks they face.

8. Turning A Sow's Ear Into A Silk Purse, Lemons Into Lemonade, and Other Acts of Alchemy

In 1921, Arthur D. Little--the very bright Boston technology firm--did just that.  Its scientists took a pig's ear and made it into a very cunning silk purse--this feat being recounted in a simple, extraordinarily effective little promotion booklet with the title dealing with the pig and the purse.  I am not sure A. D. L. has done anything since as cosmic, and I can assure you that it has never done another brochure with as much horsepower (or sow-power).  Its tribe of scribes have since fallen into that quasi-academic posturing that all the renowned consulting firms employ to recycle old concepts in new clothing.

Sow's ear . . . silk purse.    This is what innovation and corporate branding are all about.  Chaps, who like to tinker, take everyday materials, add several heaping spoonfuls of imagination, slip in a few drams of elbow grease, and turn the whole potage into something wondrous, useful, and excellent.  Eureka!

Today, of course, this movie is usually running in reverse.  A whole drawerful of silk purses are melting down into sows' ears.  We visit a Brooks Brothers where the clothing may not be cut to fit, a Presidency that has become so common as to lose all pretense of greatness, a phone or utility system that has grown hopelessly complex and where the breakdowns multiply day by day.   Today more brands are degenerating than are being created.  Call it debranding, which is sort of like deconstruction.  Brand extinction.

Which brings us to the "lemon" part of this discussion.  If you're good today, you will be attacked.  The press and the pundits, already debranded, will spend more time picking apart the best and the brightest than they will devote to jousting with the mediocre.  Any wart will be magnified.  Sooner or later, you will misstep.  It's only a matter of time.  And the legions of middlemen will rush to pull you down into their morass.  Brand extinction.

This is all the more reason to pay attention to your brand--you as a person or you as a company.  Make sure you are so connected with quality that it is hard to drag you down.  Create a body of good feeling about yourself that lingers when the barbs are cast at you.  Admit to failings, since the mistake of most brandmakers is to pretend they're perfect.  Imperfection-admitted-to perfects the brand.

If--silk purse style--you can paint a simple picture of how you are trying to make the lives of people a whole lot better, the community will ignore all the slings and arrows directed at you.  That's how to turn lemons into lemonade.

I can think of 1,000 examples of where a wonderful brand wrapped in quality protected itself from the attack dogs.   Certainly this was true of Oglivy and Mather, once the blueblood of advertising agencies.  Advertising, especially during the last 30 or 40 years, has never been held in high regard by academics and opinion makers, certainly not by journalists who are so universally dependent on it for their livelihoods.  But Oglivy wore more Teflon clothing than the rest of the agencies combined, because it comported itself differently, writing better, higher-minded copy, calling its best and brightest staffers "princes" and making clients of many of the best global brands to include Shell and American Express.  Unlike its compatriots, it nurtured its own brand.

This then is a tale about building a brand and keeping it.  Do something wonderful.  Keep on doing it.   Admit you have warts before the nay-sayers can make much of them.  This is a way to be very special in an era when brands are eroding and reputations have been flattened.

7.  The Shot That's Heard Around the World: Getting Your Emails Read, Heard, and Felt

Some rules for E-mail bulletin effectiveness with large audiences.  Most are borrowed from Jack O'Dwyer's Newsletter, August 4, 1999.

  • Keep all email bulletins and news releases very short, and include a direct link to a site offering more information on the topic.  Also include the Internet address of the site to allow the user to visit it without being dependent on your linkage.

  • Never use an attachment to provide text.  Attachments are an invitation to delete an E-mail.

  • Remember that E-mail addresses tend to change fairly rapidly.  Be prepared to continually update the group list, i. e. to delete any addresses that are no longer active and to add new ones.

  • To avoid revealing your entire list, use blind copy distribution.

  • Do not depend entirely on use of E-mail for dissemination of any kind of news.  Also use fax and hardcopy distribution with key recipients.

  • Remember to provide contact phone and/or fax numbers.  Ensure that the client receives a copy of the E-mail so they may be prepared for inquiries.

  • Find out which recipients actually read their email.  Reach other people by other means.

  • Provide as many useful links as you possibly can, especially to unusual sources of information.

  • If not sending a bulletin or news release, still include a headline that says it all. 

6.  Use the Geese to Weed the Strawberries
Years ago, I learned from my father that you could use geese to weed the strawberries.  As it happens, they don't like strawberries.  This is the best way to get a job done.  A solution so elegant that you can sit on your front porch and contemplate the verities, while the geese gander. 

Can you stay out of the weeds?  Our key observation for years has been that businessmen and businesswomen at every level in every walk of life are too busy doing all the wrong things.  Things that don't count or could get done some other way.

This is true, obviously, for all the rest of the institutions in our society.   Nowhere can we see this more clearly than in the schools that imprison our children today.  The kids are overscheduled; the curriculum is overstuffed, and the courses are trivialized.  The athletics have turned outrageously competitive.  Routine skills are not learned.  Children are simultaneously tired and over-stressed.   Mountains of homework are created, but learning falters.  Last year at least 3 major newspapers had thoughtful articles about excesses in the school system that discourage learning and crush the kids.

I am reminded of the wise old coot from Pennsylvania who said, "Everybody is complaining about deadlock.  Deadlock between the Republicans and the Democrats."  Voice rising, he crowed, "What's wrong with deadlocks?   It means they can't write more of their dumb laws.  It stops lots of the other foolishness."  He will surely be providing us with an "ode to deadlock" in future years. 

Right now, the key task for all of us is to discover what we should stop doing.  Never has less been more in so many ways.  We are simply suffering from overload.  In other words, there's a lot of spiritual weeding to get done, but you can leave the garden variety to the geese.

5.   Quality is About Having Character, Not Being a Character
This is the age of media stars, and we will always be drawn to them until the lights go out.  But you should position a business around its values, not its personalities.  As we advise a growing number of companies which are selling substance and not sheen, we are at pains to help them set their product offerings apart from the herd.  For companies that make something, the critical difference, interestingly, is superb service.  For professional service companies that sell nothing but service, trustworthiness lies at the heart of the matter, a fiduciary acceptance of total responsibility for a client's welfare.  The hightest concept of service, well beyond Sigma 6, drives quality.  Quality is having character enough to render the highest service, not the appearance of service.  I think this is what Patagonia, Farrar Straus and Giroux, J. P.  Morgan, Cravath, Swaine and Moore, and, to a small extent, Tiffany and Company try to capture in their websites.  They want to convey character.  To see our comments about their websites, click here.

4.  Greenhouse Tactics
In big companies, even midsized companies, everything conspires to stamp out new ideas, especially big ideas.  Just like the human body whose immune system is set up to kill the new germ in town, corporations often strangle new, profitable, thoughts. So how does a CEO of a major enterprise nurture the seeds that will grow into billion-dollar businesses.  Here are a few of the criteria we prepared for a consulting firm in the 1990s which understood that rapid-fire innovation would be the key to turn-of-the-century survival of America's major businesses.  Hence the need for an incubator or greenhouse, totally isolated from the host corporation, to nurture something different that will thrive in the new dynamics of the next century.  But the CEO needs to follow the greenhouse rules:

  • Can you support smart, stubborn, passionate mavericks?

  • Will you give low salaries with outrageous stock compensation?

  • Will you house the operation in cheap, out-of-the-way quarters?

  • Will you give the operation its own P&L?

  • Will you keep all your helpers (e. g. group heads, CFOs, legal counsel) out of it?

  • Will you starve it for resources but give it unbelievable freedom?

  • Will it have its own identity, right down to its own logo?

  • Will it be exempt from having to use company resources?

  • Can you allow it to have people bigger than you and your colleagues on its staff?

  • Can its products and strategy conflict with the direction the whole company is taking?

3.   Buy Low, Sell High, Collect Early, and Pay Late
Richard Levin, professor emeritus at University of North Carolina's business school, wrote this finance text for Prentice Hall back in 1983. He figured a witty title might sell a few extra copies.  We think "Collect Early and Pay Late" would have done the trick even better.  In any event, if you understand the title, you can pretty much skip the finance course.  You usually "buy low" by paying early.   By stealing this dictum from Levin, we, of course, will "pay never," which is yet another way to go.

2.  Speechmaking Advice to Business Executives
There are speeches, and there are speeches.  The problem is to make waves, not ripples:

  • Pick three topics (not one) that you're going to stick with because you are interested in them, and because they make sense for you and your company.

  • Fit the topics into a larger communications strategy.   What are you most trying to say about your company and its market(s) over the long term?

  • Use a speechwriter, often outside the company.  By and large, corporate personnel write better for publication than they do for oral presentation.  In speeches, you're selling forests, not trees, and you need a forester to do the writing.

  • Figure out how you're going to re-circulate the speech.   Most of its value arises after the actual presentation.

  • By and large, audiences don't want to hear much about your company, despite your fascination with the subject.  Make self-serving stuff brief, painless, and amusing.

  • By and large, audiences do want to hear about themselves.  Refer to their trades(s) and to their personalities. 

  • Try to have a Q-and-A period.  CEOs usually do better at Q-and-As than they do in the speeches themselves.

  • The thrust of most speeches should be relentlessly futuristic--not historical.  Audiences want to know what you and they should do about tomorrow. 

  • The script you hand out does not have to be the speech you give.  The speech can be shorter, more anecdotal, wittier.  The manuscript can be weightier with backup statistics, etc.  One is to hear, one is to read.

1. Dunk's Dictums - Where They Started
Randall Poe first used the term "Dunk's Dictums" for an article called "Managing Management Consultants" in Across the Board, October 1995, pp. 16-20. It's part of our prescription for CEOs and others who want to make sure management consultants stay on the reservation and deliver real value. Companies often ask how to manage their consultants and other advisors.  Here's how:

  • Make profit the first, not the last, word. Make your consultant push hard on the profit levers. Assignments must move the top line or the bottom line. Pursue only big opportunities.

  • Don't hire a consultant unless he or she has a powerful champion in your organization. The CEO, or another executive with unquestioned authority, must presell the consultant's credibility.

  • Don't move forward until expectations are spelled out with great precision. This could take several months.

  • Don't let new initiatives get strangled by old business habits. Better to start over in entirely new quarters with 50 percent new people than to get blindsided by yesterday's practices.

  • Fat consulting cats seldom build strong, lean companies. Pick very lean fellows. And always hire the horses, not the farm.

  • Don't measure the skills of consultants. Measure their character. Never hire a consultant you can't stand, even if he or she is very good. Life's way too short.

  • Don't even think of hiring a consultant if you are no good at accepting advice.

  • Each good consulting firm does one thing well. Make sure that what yours does is what you need.

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