- Email: [email protected]
Books on the horizon
Business Horizons (2008) 51, 353—357
www.elsevier.com/locate/bushor
BOOKS ON THE HORIZON Mimi Dollinger
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (New York: Random House, 2007, 400 pp.) If asked to identify three technologies that dramatically changed the world in the past 50 years, you might name the laser, the computer, and the Internet. The author of this book notes that all three were ‘‘unplanned, unpredicted, and unappreciated upon their discovery, and remained unappreciated well after their initial use. [Yet they]. . . were consequential.’’ All three of them were what Nassim Taleb labels Black Swans. Taleb, the Dean’s professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts at Amherst, is also the author of the best seller Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets about the irrational movements of financial markets. He notes in his new work that his previous book had an eerie connection to another Black Swan: it envisioned a scenario where an airplane crashed into an office building, and was published one week before September 11, 2001. The Black Swan was one of the finalists for the 2007 Financial Times/ Goldman Sachs Business Book of the Year, and named a top pick by Business Week, The Economist, and other publications. It was also the top-selling nonfiction book on Amazon.com last year. The term Black Swan comes from European explorers who thought that all swans were white until they encountered a black bird when they discovered Australia. Taleb defines Black Swans as things that lie outside the world of our regular
E-mail address: [email protected]
expectations, which have extreme impact, and which humans try to portray after the fact as an event or development that was both explainable and predictable. As Taleb says, ‘‘We are explanation-seeking animals who tend to think that everything has an identifiable cause and grab the most apparent one as the explanation.’’ This, in fact, is the danger posed by Black Swans. The author argues that we are good at predicting the ordinary, but not good at predicting the irregular–— and that big events and opportunities are almost always irregular or outlandish. He writes that some kinds of experts prove that skills and experience make a difference in their jobs, such as accountants, tests pilots, and astronomers. But he warns that some so-called experts are far less useful because their training does not prepare them to do their jobs well or make accurate predictions. In this group he includes stockbrokers, college admissions officers, intelligence analysts, economists, and finance professors. It is apparent that Taleb, a former financial trader and current academic, has issues with some of his former and current colleagues. At one point he jokes that, ‘‘Half the people I know call me irreverent. . .[and] half call me fawning.’’ Taleb distrusts financial models and statistics, and rants with particular virulence against U.S. finance professors who brainwash their business school students with modern portfolio theory (MPT) based on the Gaussian distribution; he complains that MPT has neither realistic assumptions nor produces reliable results. One Black Swan example Taleb offers as proof that MPT is misleading is the crash of the Long-Term Capital Management (LTCM) hedge fund, which lost $4.6 billion in less than 4 months in 1998 following a Russian financial crisis. The fact that two of LTCM’s founding partners, Myron Scholes and Robert Merton,
0007-6813/$ — see front matter # 2008 Kelley School of Business, Indiana University. All rights reserved. doi:10.1016/j.bushor.2008.02.008
354 shared the 1997 Nobel Prize in Economics allows Taleb to grumble about one of his other favorite targets. Taleb suggests that our reliance on what he calls the mediocristan of models, along with analysis after the fact, causes us to tunnel as we look into the future, allowing us to pretend that we’re facing a Black Swan-free, business-as-usual, future. He writes that humans suffer from the triplet of opacity, meaning that we think we know more than we do, analyze events after the fact, and overvalue information from authoritative sources. Even when we acknowledge the existence of Black Swans we behave as if they are either beyond our comprehension or beyond our control; too many of us insist on being blind to them. Taleb says that he hates Black Swans because they are unfair and damaging, and that he would like to eliminate many of them, or at least diminish their impact. But he stresses that the world today is dominated by the unknown and improbable, and promises that the future will be even less predictable. He adds that he suspects, ‘‘the most successful businesses are precisely those that know how to work around inherent unpredictability and even exploit it,’’ and that entrepreneurs and other discoverers should focus on recognizing Black Swan opportunities, and rely less on topdown planning. An inveterate name-dropper and intellectual muscle flexor, Taleb insists that while he is ‘‘skeptical, nonacademic, antidogmatic and obsessively empirical’’ he is also just ‘‘a practitioner whose principal aim is not to be a sucker in things that matter.’’ So it’s refreshing when in the midst of citing pundits like mathematician Benoıˆt Mandelbrot, philosopher Karl Popper, and psychologist Danny Kahneman, Taleb also quotes a legendary American baseball expert. ‘‘It’s tough to make predictions,’’ Yogi Berra once said, ‘‘especially about the future.’’ How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else, by Michael Gates Gill (New York: Gotham Books, 2007, 272 pp.) There may have been times when you thought the coffeehouse chain Starbucks saved your life by providing either a drink laced with caffeine when your adrenaline was lagging, or a cup of herbal tea when your spirits needed to be soothed. But Michael Gates Gill believes that Starbucks literally saved his life by hiring him as an hourly employee at a time when he could barely scrape together enough cash to buy a latte. It’s a story so good Academy Award winner Tom Hanks has purchased the film rights, and reportedly plans to himself star in the movie version. This book was also selected by The Wall Street Journal as one of the best books of 2007.
BOOKS ON THE HORIZON Gill’s only work experience qualifying him to serve coffee at Starbucks was a few hours once spent behind the counter at Burger King. But those hours were on-the-job research conducted while he was employed as an executive vice president and creative director at the J. Walter Thompson (JWT) advertising agency, supervising multi-million dollar marketing campaigns for companies including Burger King, Ford, and the U.S. Marine Corps. The son of a famed writer for The New Yorker magazine, Gill was raised to be what he calls a ‘‘Master of the Universe,’’ not someone who wears a uniform to serve coffee. He attended private schools and learned to play the piano on a baby grand, drank at a student bar with the poet W.H. Auden as an undergraduate at Yale, and ran with the bulls at Pamplona at the urging of Ernest Hemingway. Fired after 25 years at JWT by a coworker he had mentored, Gill operated a consulting firm with dwindling success for nine years before he found himself sitting in a street corner Starbucks, wrapped in reverie while he gazed through the window at his childhood home. He reflects that the coffeehouse manager was probably joking when she asked if he wanted a job, and admits he filled out the application only because he desperately needed the company-sponsored health insurance to cover both his newly diagnosed brain tumor and the child he fathered with his girlfriend after his wife divorced him. On one hand this is a very personal and specific story of a particular individual who claims to prefer the structure of a low-level job to the pressure of his previous corporate life. The 63-year-old Gill was obviously in the midst of a sort of breakdown when he first tied on the signature Starbucks green apron. He says it occurred to him the entry-level job might be beneath his abilities, but instead found his job to be physically, emotionally, and mentally challenging. He spent his first two months cleaning and sweeping because he was afraid to work the cash register or pull espresso drinks. On the other hand, this book is also a thoughtful observation by an experienced manager that celebrates the value and satisfaction that can be imbedded in a service job. Gill writes that he has been treated with more respect and dignity from his first day at Starbucks than he ever got in his corporate posts. Starbucks employees refer to their fellow workers as Partners. Managers never give orders; instead they invite partners to do a task or help out. Positive reinforcement, even when it may be difficult to find positive behavior in a sea of negative incidents, is stressed. Performing well on the job, even when that job is scrubbing toilets, is appreciated and recognized.
BOOKS ON THE HORIZON Gill portrays the staff at the Starbucks where he first worked as a mechanized but supportive team. Partners trained new hires with gentle encouragement. The manager juggled the schedule to accommodate employees’ childcare needs or college classes. Some partners made their first visit ever to a dentist or eye doctor with the encouragement of the store manager, funded by the company’s health insurance. Starbucks also has a tuition assistance plan, and some employees, including Gill, were encouraged to learn more about coffee through company-sponsored computer classes. The author explains that Starbucks’ commitment to respecting people extends beyond its employees. The company promotes a ‘‘work environment that values those precious moments of truly human interaction,’’ meaning that partners are encouraged to chat with customers, look them in the eye, and greet regulars by name. Customers are called guests, and interacting with those guests is known as ‘‘delivering legendary service.’’ Non-customers, even the homeless, are welcome to use the restrooms or sit at tables as long as they wish. Gill admits that confessing to old friends and former colleagues that he was working as a barista was ‘‘like the old days when the Pilgrims put sinners in the stocks at the public square as a visible example to others to watch their ways.’’ But despite the book sales and the movie deal, after four years he’s still in the same job at Starbucks, rising at 5 a.m. to open the store near his modest apartment in a New York City suburb. While the book’s subtitle alludes to the fact that working at Starbucks made Gill feel like a common man, it’s obvious from his story that Starbucks makes common employees feel like they’re considerably more than that. Smart World: Breakthrough Creativity and the New Science of Ideas, by Richard Ogle (Boston: Harvard Business School Press, 2007, 303 pp.) In September 1994 Joseph J. Esposito, president of Encyclopedia Britannica, delivered an address entitled The Publishing Challenge to the Electronic Books Conference and Exposition. Britannica, he announced, was beginning to carefully move into digital publishing, strictly as a complement to its established print product. Esposito thought his company’s cautious approach might dampen enthusiasm for the digital books and magazines that were beginning to pop up on the Internet. Four years later a Swiss banking conglomerate was able to purchase Britannica for less than half its book value. According to this author, part of the problem was that Britannica had underestimated its core market. Parents who had once purchased a
355 print encyclopedia to help their kids in school were now investing in personal computers; once they purchased a computer, they wanted a reference source that would run on that computer. It didn’t help that most of the computers sold were already loaded with Microsoft software, including that company’s encyclopedia Encarta. But part of the problem was also Britannica’s inability to make an innovative leap, to harness its corporate imagination to creatively maintain its market dominance. The author of this book doesn’t waste time reiterating the frequently voiced argument that a creative economy will dominate the future. Instead Richard Ogle, a consultant who has advised businesses including Simon and Schuster, Pfizer, and Kaiser Permanente on breakthrough creativity, discusses how companies can successfully plan those imaginative leaps. Key to Ogle’s approach is a concept that creative thinking often occurs in ‘‘idea-spaces of an extended mind’’ outside the human brain. In other words, it’s not our mind-in-the-head (MITH) processes alone that help us make the jump to innovative solutions and products. Because people respond to patterns we recognize, we can access the intelligence that is imbedded in external idea-spaces, and apply that format to something completely different. Ogle’s examples of this include the way Francis Crick applied the physical model techniques he learned as a physicist to his biology-based search for the structure of DNA with James Watson, and the way British artist J.M.W. Turner used his impressionist seascape paintings to reflect the influence of what was then the new science of electromagnetism in the nineteenth century. Perhaps this book’s most entertaining example of the way connections can be made in idea-spaces is the story behind the creation of the Barbie doll. Despite what her Mattel employees told her, company co-founder Ruth Handler noticed her young daughter was more interested in playing with fashion-oriented paper dolls than she was in cuddling three-dimensional baby dolls. While on vacation in Europe, Handler spotted a Lilli doll, which was actually a kind of mascot figure with a mature persona that was popular there with adult males. Ogle speculates that Handler was inspired by the myth of the Greek goddess Aphrodite when she directed the Mattel production staff to create an American version that would be marketed to children. This new kind of doll could be changed into different fashion outfits, posed rather than coddled, and emanated both power and sex appeal from her adult image. Despite the initial reluctance of some retailers to stock a doll adorned with both eye
356 shadow and breasts, Barbie made a creative leap into what eventually became $3 billion in sales per year. Ogle condenses his theory of the creative process into nine laws. Derived from network science, which he describes as a branch of complexity theory that seeks to establish the universal laws and principles of networks, Ogle claims these laws explain how humans experience imagination, insight and intuition, and how we marshal those forces to make innovative leaps. Basically his laws boil down to a theory that entities are fit if they are able to establish meaningful links to important external groups, such as customers, investors, or key suppliers, and that the very nature of their fitness enables them to build stronger links or spontaneously establish links to more groups, which in turn makes the entities even more fit. Fitness also enables individuals or companies to be sensitive to hotspots, which can be defined as powerful ideas or trends that have the ability to influence unrelated functions in an innovative way. For example, Ogle explains that the significant innovation wasn’t simply that Johann Gutenberg invented moveable type; his creative breakthrough came about because he grew up in a European town visited by many religious pilgrims, because his father was a metal smith involved in the minting of metal commemorates for those pilgrims, because Gutenberg lived at a time when the Catholic Church was very interested in standardizing liturgical texts, and because the literacy promoted by printed grammars and Bibles was welcomed by the capitalist class who could fund Gutenberg’s press. Unfortunately there are times when Ogle’s text here is bogged down with his own jargon, or when it’s stretched too thin to make a solid point. His examples are generally better than the rhetoric they’re supposed to amplify. But his basic premise that innovators must make creative external connections outside their familiar environment is invigorating. ‘‘The gift of imagination,’’ this author reminds us Einstein once declared, ‘‘has meant more to me than my talent for absorbing absolute knowledge.’’ ZOOM: The Global Race to Fuel the Car of the Future, by Iain Carson and Vijay V. Vaitheeswaran (New York: Twelve, 2007, 352 pp.) Imagine a television reality show that isn’t about being stranded in the wilderness, or singing offkey, or learning the real estate business from a guy with a bad comb-over. This time, envision unscripted entertainment about a cross-country car race. It won’t be like any other auto race you’ve seen on
BOOKS ON THE HORIZON TV. Instead, it will be what the authors of this book describe as ‘‘a sort of clean-energy Cannonball Run.’’ The cars entered in the race won’t be powered by gasoline, at least not entirely. Instead they’ll be racing on ethanol, biodiesel, electric batteries, or hydrogen fuel cells, or some combination involving at least one of those. In order to qualify, each car will have demonstrated it can achieve the equivalent of 100 miles per gallon (MPG) or better while staying below strict emissions caps, and the designers will have to prove that it is possible to commercially produce and market their vehicle. This kind of race is tentatively scheduled for 2009—2010, sponsored by the X Prize Foundation, the same organization that awarded $10 million in 2004 to Burt Rutan and his team for flying the first private aircraft into space twice in two weeks. Contestants will be competing for a $10 million award in this race, too, but the real prize–—fueled by the television audience’s ability to follow the race in prime time, and then call in to vote for the car they like best–—will be a drama that may finally convince the American public that alternative fuel cars are both viable and attractive. Iain Carson, an editor at The Economist, and Vijay Vaitheeswaran, a journalist who covers environmental issues for the same publication, write in their introduction that America and the world are at an energy crossroads where the decisions we make now about automobiles and oil will profoundly affect our environmental and economic future. They describe a grassroots movement of people who want to reduce our dependence on foreign oil for a variety of reasons, including political and security concerns. They insist that we need to expand that movement to millions of ordinary Americans in order to force the U.S. government to mandate effective change. This wisecracking yet seemingly wise treatise was one of the finalists for the 2007 Financial Times/ Goldman Sachs Business Book of the Year. While this is a book about cars, the authors admit that the real problem is oil. The U.S. consumes 25% of the world’s daily production of oil, and almost 50% of its daily production of gasoline, but has less than 3% of the proven reserves. Government subsidies to U.S. oil companies help lower prices, but also mask the problem. Industry analysts predict that oil supplies will seriously start to decline by 2020 or 2030, and today even functioning fields are experiencing drops in reservoir pressure. Developing economies like China and India are now competitors for the world’s oil supply; China switched from oil exporter to importer during the 1990s, and today is the world’s second largest consumer of petroleum products. Current oil production is subject to both natural disasters and terrorist attacks. Relying upon foreign
BOOKS ON THE HORIZON oil also means importers are making themselves vulnerable to the whims of what the authors label as ‘‘a few autocratic and erratic petro-regimes.’’ Because we are limited in our control over what they call the juice, the authors suggest we need to concentrate on making changes in our jalopies. What we’re driving now is fairly inefficient; energy pundit Amory Lovins estimates that only 1% of the energy in a gallon of gas is actually used to move a vehicle forward. But thanks to high gas prices and the CAFE (Corporate Average Fuel Economy) law, average fuel efficiency in the U.S. did increase over 40% between 1978 and 1987, while U.S. net oil imports fell by nearly half during roughly the same period. Some of the precursors to the car of the future are already on the road. Five million flex-fuel cars that can run on either gasoline or ethanol are on U.S. highways now, and Ford, Chrysler, and GM have pledged to double their 1 million-vehicles annual production of these cars by 2010. The winning car in a 2006 Le Mans endurance style race in Florida was
357 powered by a cleaner form of diesel made from natural gas, a source of energy that is much more abundant than oil. Carson and Vaitheeswaran devote considerable space here to applauding the efforts of Toyota. That company’s Prius hybrid is too limited to be a true car of the future, but what Toyota is learning about lighter batteries and compact electronics from that model will undoubtedly be rolled into their eventual hydrogen fuel cell vehicle. The real horsepower under the hood of this book is the way the authors have gathered lots of information about alternative fuel and revolutionary auto design, along with insights into the problems of big oil and automakers, and then packaged it in a format that’s compelling to read. The places where they sprinkle in a little humor are a bonus. One of their best lines is a quotation that observes, ‘‘The Stone Age did not end for lack of stone, and the Oil Age could well end long before the world runs out of oil.’’ A reader doesn’t have to be an environmentalist or an automotive engineer to appreciate that the speaker was a former Saudi oil minister.
www.elsevier.com/locate/bushor
BOOKS ON THE HORIZON Mimi Dollinger
The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb (New York: Random House, 2007, 400 pp.) If asked to identify three technologies that dramatically changed the world in the past 50 years, you might name the laser, the computer, and the Internet. The author of this book notes that all three were ‘‘unplanned, unpredicted, and unappreciated upon their discovery, and remained unappreciated well after their initial use. [Yet they]. . . were consequential.’’ All three of them were what Nassim Taleb labels Black Swans. Taleb, the Dean’s professor in the Sciences of Uncertainty at the Isenberg School of Management at the University of Massachusetts at Amherst, is also the author of the best seller Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets about the irrational movements of financial markets. He notes in his new work that his previous book had an eerie connection to another Black Swan: it envisioned a scenario where an airplane crashed into an office building, and was published one week before September 11, 2001. The Black Swan was one of the finalists for the 2007 Financial Times/ Goldman Sachs Business Book of the Year, and named a top pick by Business Week, The Economist, and other publications. It was also the top-selling nonfiction book on Amazon.com last year. The term Black Swan comes from European explorers who thought that all swans were white until they encountered a black bird when they discovered Australia. Taleb defines Black Swans as things that lie outside the world of our regular
E-mail address: [email protected]
expectations, which have extreme impact, and which humans try to portray after the fact as an event or development that was both explainable and predictable. As Taleb says, ‘‘We are explanation-seeking animals who tend to think that everything has an identifiable cause and grab the most apparent one as the explanation.’’ This, in fact, is the danger posed by Black Swans. The author argues that we are good at predicting the ordinary, but not good at predicting the irregular–— and that big events and opportunities are almost always irregular or outlandish. He writes that some kinds of experts prove that skills and experience make a difference in their jobs, such as accountants, tests pilots, and astronomers. But he warns that some so-called experts are far less useful because their training does not prepare them to do their jobs well or make accurate predictions. In this group he includes stockbrokers, college admissions officers, intelligence analysts, economists, and finance professors. It is apparent that Taleb, a former financial trader and current academic, has issues with some of his former and current colleagues. At one point he jokes that, ‘‘Half the people I know call me irreverent. . .[and] half call me fawning.’’ Taleb distrusts financial models and statistics, and rants with particular virulence against U.S. finance professors who brainwash their business school students with modern portfolio theory (MPT) based on the Gaussian distribution; he complains that MPT has neither realistic assumptions nor produces reliable results. One Black Swan example Taleb offers as proof that MPT is misleading is the crash of the Long-Term Capital Management (LTCM) hedge fund, which lost $4.6 billion in less than 4 months in 1998 following a Russian financial crisis. The fact that two of LTCM’s founding partners, Myron Scholes and Robert Merton,
0007-6813/$ — see front matter # 2008 Kelley School of Business, Indiana University. All rights reserved. doi:10.1016/j.bushor.2008.02.008
354 shared the 1997 Nobel Prize in Economics allows Taleb to grumble about one of his other favorite targets. Taleb suggests that our reliance on what he calls the mediocristan of models, along with analysis after the fact, causes us to tunnel as we look into the future, allowing us to pretend that we’re facing a Black Swan-free, business-as-usual, future. He writes that humans suffer from the triplet of opacity, meaning that we think we know more than we do, analyze events after the fact, and overvalue information from authoritative sources. Even when we acknowledge the existence of Black Swans we behave as if they are either beyond our comprehension or beyond our control; too many of us insist on being blind to them. Taleb says that he hates Black Swans because they are unfair and damaging, and that he would like to eliminate many of them, or at least diminish their impact. But he stresses that the world today is dominated by the unknown and improbable, and promises that the future will be even less predictable. He adds that he suspects, ‘‘the most successful businesses are precisely those that know how to work around inherent unpredictability and even exploit it,’’ and that entrepreneurs and other discoverers should focus on recognizing Black Swan opportunities, and rely less on topdown planning. An inveterate name-dropper and intellectual muscle flexor, Taleb insists that while he is ‘‘skeptical, nonacademic, antidogmatic and obsessively empirical’’ he is also just ‘‘a practitioner whose principal aim is not to be a sucker in things that matter.’’ So it’s refreshing when in the midst of citing pundits like mathematician Benoıˆt Mandelbrot, philosopher Karl Popper, and psychologist Danny Kahneman, Taleb also quotes a legendary American baseball expert. ‘‘It’s tough to make predictions,’’ Yogi Berra once said, ‘‘especially about the future.’’ How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else, by Michael Gates Gill (New York: Gotham Books, 2007, 272 pp.) There may have been times when you thought the coffeehouse chain Starbucks saved your life by providing either a drink laced with caffeine when your adrenaline was lagging, or a cup of herbal tea when your spirits needed to be soothed. But Michael Gates Gill believes that Starbucks literally saved his life by hiring him as an hourly employee at a time when he could barely scrape together enough cash to buy a latte. It’s a story so good Academy Award winner Tom Hanks has purchased the film rights, and reportedly plans to himself star in the movie version. This book was also selected by The Wall Street Journal as one of the best books of 2007.
BOOKS ON THE HORIZON Gill’s only work experience qualifying him to serve coffee at Starbucks was a few hours once spent behind the counter at Burger King. But those hours were on-the-job research conducted while he was employed as an executive vice president and creative director at the J. Walter Thompson (JWT) advertising agency, supervising multi-million dollar marketing campaigns for companies including Burger King, Ford, and the U.S. Marine Corps. The son of a famed writer for The New Yorker magazine, Gill was raised to be what he calls a ‘‘Master of the Universe,’’ not someone who wears a uniform to serve coffee. He attended private schools and learned to play the piano on a baby grand, drank at a student bar with the poet W.H. Auden as an undergraduate at Yale, and ran with the bulls at Pamplona at the urging of Ernest Hemingway. Fired after 25 years at JWT by a coworker he had mentored, Gill operated a consulting firm with dwindling success for nine years before he found himself sitting in a street corner Starbucks, wrapped in reverie while he gazed through the window at his childhood home. He reflects that the coffeehouse manager was probably joking when she asked if he wanted a job, and admits he filled out the application only because he desperately needed the company-sponsored health insurance to cover both his newly diagnosed brain tumor and the child he fathered with his girlfriend after his wife divorced him. On one hand this is a very personal and specific story of a particular individual who claims to prefer the structure of a low-level job to the pressure of his previous corporate life. The 63-year-old Gill was obviously in the midst of a sort of breakdown when he first tied on the signature Starbucks green apron. He says it occurred to him the entry-level job might be beneath his abilities, but instead found his job to be physically, emotionally, and mentally challenging. He spent his first two months cleaning and sweeping because he was afraid to work the cash register or pull espresso drinks. On the other hand, this book is also a thoughtful observation by an experienced manager that celebrates the value and satisfaction that can be imbedded in a service job. Gill writes that he has been treated with more respect and dignity from his first day at Starbucks than he ever got in his corporate posts. Starbucks employees refer to their fellow workers as Partners. Managers never give orders; instead they invite partners to do a task or help out. Positive reinforcement, even when it may be difficult to find positive behavior in a sea of negative incidents, is stressed. Performing well on the job, even when that job is scrubbing toilets, is appreciated and recognized.
BOOKS ON THE HORIZON Gill portrays the staff at the Starbucks where he first worked as a mechanized but supportive team. Partners trained new hires with gentle encouragement. The manager juggled the schedule to accommodate employees’ childcare needs or college classes. Some partners made their first visit ever to a dentist or eye doctor with the encouragement of the store manager, funded by the company’s health insurance. Starbucks also has a tuition assistance plan, and some employees, including Gill, were encouraged to learn more about coffee through company-sponsored computer classes. The author explains that Starbucks’ commitment to respecting people extends beyond its employees. The company promotes a ‘‘work environment that values those precious moments of truly human interaction,’’ meaning that partners are encouraged to chat with customers, look them in the eye, and greet regulars by name. Customers are called guests, and interacting with those guests is known as ‘‘delivering legendary service.’’ Non-customers, even the homeless, are welcome to use the restrooms or sit at tables as long as they wish. Gill admits that confessing to old friends and former colleagues that he was working as a barista was ‘‘like the old days when the Pilgrims put sinners in the stocks at the public square as a visible example to others to watch their ways.’’ But despite the book sales and the movie deal, after four years he’s still in the same job at Starbucks, rising at 5 a.m. to open the store near his modest apartment in a New York City suburb. While the book’s subtitle alludes to the fact that working at Starbucks made Gill feel like a common man, it’s obvious from his story that Starbucks makes common employees feel like they’re considerably more than that. Smart World: Breakthrough Creativity and the New Science of Ideas, by Richard Ogle (Boston: Harvard Business School Press, 2007, 303 pp.) In September 1994 Joseph J. Esposito, president of Encyclopedia Britannica, delivered an address entitled The Publishing Challenge to the Electronic Books Conference and Exposition. Britannica, he announced, was beginning to carefully move into digital publishing, strictly as a complement to its established print product. Esposito thought his company’s cautious approach might dampen enthusiasm for the digital books and magazines that were beginning to pop up on the Internet. Four years later a Swiss banking conglomerate was able to purchase Britannica for less than half its book value. According to this author, part of the problem was that Britannica had underestimated its core market. Parents who had once purchased a
355 print encyclopedia to help their kids in school were now investing in personal computers; once they purchased a computer, they wanted a reference source that would run on that computer. It didn’t help that most of the computers sold were already loaded with Microsoft software, including that company’s encyclopedia Encarta. But part of the problem was also Britannica’s inability to make an innovative leap, to harness its corporate imagination to creatively maintain its market dominance. The author of this book doesn’t waste time reiterating the frequently voiced argument that a creative economy will dominate the future. Instead Richard Ogle, a consultant who has advised businesses including Simon and Schuster, Pfizer, and Kaiser Permanente on breakthrough creativity, discusses how companies can successfully plan those imaginative leaps. Key to Ogle’s approach is a concept that creative thinking often occurs in ‘‘idea-spaces of an extended mind’’ outside the human brain. In other words, it’s not our mind-in-the-head (MITH) processes alone that help us make the jump to innovative solutions and products. Because people respond to patterns we recognize, we can access the intelligence that is imbedded in external idea-spaces, and apply that format to something completely different. Ogle’s examples of this include the way Francis Crick applied the physical model techniques he learned as a physicist to his biology-based search for the structure of DNA with James Watson, and the way British artist J.M.W. Turner used his impressionist seascape paintings to reflect the influence of what was then the new science of electromagnetism in the nineteenth century. Perhaps this book’s most entertaining example of the way connections can be made in idea-spaces is the story behind the creation of the Barbie doll. Despite what her Mattel employees told her, company co-founder Ruth Handler noticed her young daughter was more interested in playing with fashion-oriented paper dolls than she was in cuddling three-dimensional baby dolls. While on vacation in Europe, Handler spotted a Lilli doll, which was actually a kind of mascot figure with a mature persona that was popular there with adult males. Ogle speculates that Handler was inspired by the myth of the Greek goddess Aphrodite when she directed the Mattel production staff to create an American version that would be marketed to children. This new kind of doll could be changed into different fashion outfits, posed rather than coddled, and emanated both power and sex appeal from her adult image. Despite the initial reluctance of some retailers to stock a doll adorned with both eye
356 shadow and breasts, Barbie made a creative leap into what eventually became $3 billion in sales per year. Ogle condenses his theory of the creative process into nine laws. Derived from network science, which he describes as a branch of complexity theory that seeks to establish the universal laws and principles of networks, Ogle claims these laws explain how humans experience imagination, insight and intuition, and how we marshal those forces to make innovative leaps. Basically his laws boil down to a theory that entities are fit if they are able to establish meaningful links to important external groups, such as customers, investors, or key suppliers, and that the very nature of their fitness enables them to build stronger links or spontaneously establish links to more groups, which in turn makes the entities even more fit. Fitness also enables individuals or companies to be sensitive to hotspots, which can be defined as powerful ideas or trends that have the ability to influence unrelated functions in an innovative way. For example, Ogle explains that the significant innovation wasn’t simply that Johann Gutenberg invented moveable type; his creative breakthrough came about because he grew up in a European town visited by many religious pilgrims, because his father was a metal smith involved in the minting of metal commemorates for those pilgrims, because Gutenberg lived at a time when the Catholic Church was very interested in standardizing liturgical texts, and because the literacy promoted by printed grammars and Bibles was welcomed by the capitalist class who could fund Gutenberg’s press. Unfortunately there are times when Ogle’s text here is bogged down with his own jargon, or when it’s stretched too thin to make a solid point. His examples are generally better than the rhetoric they’re supposed to amplify. But his basic premise that innovators must make creative external connections outside their familiar environment is invigorating. ‘‘The gift of imagination,’’ this author reminds us Einstein once declared, ‘‘has meant more to me than my talent for absorbing absolute knowledge.’’ ZOOM: The Global Race to Fuel the Car of the Future, by Iain Carson and Vijay V. Vaitheeswaran (New York: Twelve, 2007, 352 pp.) Imagine a television reality show that isn’t about being stranded in the wilderness, or singing offkey, or learning the real estate business from a guy with a bad comb-over. This time, envision unscripted entertainment about a cross-country car race. It won’t be like any other auto race you’ve seen on
BOOKS ON THE HORIZON TV. Instead, it will be what the authors of this book describe as ‘‘a sort of clean-energy Cannonball Run.’’ The cars entered in the race won’t be powered by gasoline, at least not entirely. Instead they’ll be racing on ethanol, biodiesel, electric batteries, or hydrogen fuel cells, or some combination involving at least one of those. In order to qualify, each car will have demonstrated it can achieve the equivalent of 100 miles per gallon (MPG) or better while staying below strict emissions caps, and the designers will have to prove that it is possible to commercially produce and market their vehicle. This kind of race is tentatively scheduled for 2009—2010, sponsored by the X Prize Foundation, the same organization that awarded $10 million in 2004 to Burt Rutan and his team for flying the first private aircraft into space twice in two weeks. Contestants will be competing for a $10 million award in this race, too, but the real prize–—fueled by the television audience’s ability to follow the race in prime time, and then call in to vote for the car they like best–—will be a drama that may finally convince the American public that alternative fuel cars are both viable and attractive. Iain Carson, an editor at The Economist, and Vijay Vaitheeswaran, a journalist who covers environmental issues for the same publication, write in their introduction that America and the world are at an energy crossroads where the decisions we make now about automobiles and oil will profoundly affect our environmental and economic future. They describe a grassroots movement of people who want to reduce our dependence on foreign oil for a variety of reasons, including political and security concerns. They insist that we need to expand that movement to millions of ordinary Americans in order to force the U.S. government to mandate effective change. This wisecracking yet seemingly wise treatise was one of the finalists for the 2007 Financial Times/ Goldman Sachs Business Book of the Year. While this is a book about cars, the authors admit that the real problem is oil. The U.S. consumes 25% of the world’s daily production of oil, and almost 50% of its daily production of gasoline, but has less than 3% of the proven reserves. Government subsidies to U.S. oil companies help lower prices, but also mask the problem. Industry analysts predict that oil supplies will seriously start to decline by 2020 or 2030, and today even functioning fields are experiencing drops in reservoir pressure. Developing economies like China and India are now competitors for the world’s oil supply; China switched from oil exporter to importer during the 1990s, and today is the world’s second largest consumer of petroleum products. Current oil production is subject to both natural disasters and terrorist attacks. Relying upon foreign
BOOKS ON THE HORIZON oil also means importers are making themselves vulnerable to the whims of what the authors label as ‘‘a few autocratic and erratic petro-regimes.’’ Because we are limited in our control over what they call the juice, the authors suggest we need to concentrate on making changes in our jalopies. What we’re driving now is fairly inefficient; energy pundit Amory Lovins estimates that only 1% of the energy in a gallon of gas is actually used to move a vehicle forward. But thanks to high gas prices and the CAFE (Corporate Average Fuel Economy) law, average fuel efficiency in the U.S. did increase over 40% between 1978 and 1987, while U.S. net oil imports fell by nearly half during roughly the same period. Some of the precursors to the car of the future are already on the road. Five million flex-fuel cars that can run on either gasoline or ethanol are on U.S. highways now, and Ford, Chrysler, and GM have pledged to double their 1 million-vehicles annual production of these cars by 2010. The winning car in a 2006 Le Mans endurance style race in Florida was
357 powered by a cleaner form of diesel made from natural gas, a source of energy that is much more abundant than oil. Carson and Vaitheeswaran devote considerable space here to applauding the efforts of Toyota. That company’s Prius hybrid is too limited to be a true car of the future, but what Toyota is learning about lighter batteries and compact electronics from that model will undoubtedly be rolled into their eventual hydrogen fuel cell vehicle. The real horsepower under the hood of this book is the way the authors have gathered lots of information about alternative fuel and revolutionary auto design, along with insights into the problems of big oil and automakers, and then packaged it in a format that’s compelling to read. The places where they sprinkle in a little humor are a bonus. One of their best lines is a quotation that observes, ‘‘The Stone Age did not end for lack of stone, and the Oil Age could well end long before the world runs out of oil.’’ A reader doesn’t have to be an environmentalist or an automotive engineer to appreciate that the speaker was a former Saudi oil minister.