Posts tagged business

A lovely and challenging essay from Makoto Fujimura on trout fishing, love, beauty—and business.

re: beauty, business, fishing, traces of god, wealth

Andy:

[If Paul] is right [in 1 Corinthians 13], then all things or systems that work against the principle of love will fail eventually. Sacrificial love, in other words, is the only sustainable operating force in the universe. We can complain that we simply cannot accept the assumptions proposed here; but Christians should not be able to operate, if we do indeed believe these principles, in some halfway land, on one hand claiming to believe the ordinances, but also functionally accepting the worldly systems at work as the only reality.

The medium of beauty in a business world is the workers that make the businesses run. It’s not the stock options or profit. They comprise far more capacity, and far deeper longing and invigorated promise for future generations than the system gives them credit for. So the question is not whether they are paid enough, or given enough work: the question is, does the workplace enlarge humanity, or endanger humanity.

Thus, we need to see the market not just as a tool to make money, but a complex labyrinth with a generative creative order. In such an ecosystem, we need to consider investments as a form of stewardship. Conversely, we may redefine investments as a way to create and sustain beauty, rather than gain power for ourselves. And true beauty, at her truest aim, is a humble stream that flows through the heart of a city, re-humanizing its inhabitants, and allowing them to breathe in what would otherwise be unbearable air.

It's always a little uncomfortable calling others to join you in doing the impossible (or the not-yet-possible) ... but sometimes humility can be self-fulfilling.

re: business, horizons of the possible, planning

Nate:

Don’t be humble, either. This was one of my early mistakes. I was well aware that I was going to be subjected to this sort of skepticism. As a result, my initial projections were extremely conservative. Bad idea. In my first few meetings, I got the same reaction: People loved the concept, but were surprised at how little money we were going to generate. Despite the fact that our idea had potential, I’d attempted to temper expectations. Turns out, I’d tried so hard to avoid looking unrealistic that I ended up looking unimpressive. There was a middle ground I was missing. Don’t go overboard, but don’t sell yourself short.

In fact, this is the reason many people advocate integrating a situational analysis into your projections. Take three scenarios—not great, good, awesome—and show how they affect your profits and the amount of good your company can do. Make it as easy as possible to understand. “If we get this many customers, here’s what happens.” It takes a bit more research and a bit more time, but it’ll show that you’re planning ahead for contingencies—something any potential investor will appreciate.

Does investing our own (fruitful) labor into a cultural artifact's creation cause us to overvalue said artifact, as these business-school-types argue? Or is it rather that the investment of a fresh egg or a few turns of an allen wrench counteracts a tendency to undervalue—and underappreciate—the labor of others?

re: business, diy, food and drink, furniture, ikea, work

Nate:

When instant cake mixes were introduced, in the 1950s, housewives were initially resistant: The mixes were too easy, suggesting that their labor was undervalued. When manufacturers changed the recipe to require the addition of an egg, adoption rose dramatically. Ironically, increasing the labor involved – making the task more arduous – led to greater liking….

When people construct products themselves, from bookshelves to Build-a-Bears, they come to overvalue their (often poorly made) creations. We call this phenomenon the IKEA effect, in honor of the wildly successful Swedish manufacturer whose products typically arrive with some assembly required.

In one of our studies we asked people to fold origami and then to bid on their own creations along with other people’s. They were consistently willing to pay more for their own origami. In fact, they were so enamored of their amateurish creations that they valued them as highly as origami made by experts.

We also investigated the limits of the IKEA effect, showing that labor leads to higher valuation only when the labor is fruitful…

This is from a follow-up to Michael Luo's November 30 article about the racial disparity in unemployment among college graduates. In recent weeks I've been watching the Roots miniseries for the first time, and thinking a lot about naming in particular. The multiple scenes where Kunta Kinte struggles to keep his own name and identity make the sometimes-more-subtle question of who gets called what when and by whom impossible to ignore and, in the light of both past and present, troubling (if fascinating) to consider.

re: business, horizons of the possible., names, race, recession

Nate:

Nevertheless, the strategy of hiding race — in particular changing names — can be soul-piercing. It prompted one African-American reader of the article to write that he was reminded of the searing scene in the groundbreaking TV miniseries “Roots” when the runaway slave Kunta Kinte is whipped until he declares that his name is Toby, the name given to him by his master.

Black job seekers said the purpose of hiding racial markers extended beyond simply getting in the door for an interview. It was also part of making sure they appeared palatable to hiring managers once race was seen. Activism in black organizations, even majoring in African-American studies can be signals to employers. Removing such details is all part of what Ms. Orr described as “calming down on the blackness.”

In “Covering: the Hidden Assault on Our Civil Rights,” Kenji Yoshino, a law professor at New York University, wrote about this phenomenon not just among blacks but also other minority groups. “My notion of covering is really about the idea that people can have stigmatized identities that either they can’t or won’t hide but nevertheless experience a huge amount of pressure to downplay those identities,” he said. Mr. Yoshino says that progress in hiring has meant that “the line originally was between whites and nonwhites, favoring whites; now it’s whites and nonwhites who are willing to act white.”

A fascinating brief history of the cubicle—and a great reminder that even well-intentioned culture making goes oft astray. The "father of the cubicle" intended to provide a more spacious workplace, but his invention ended up contributing to—in his words—"monolithic insanity." With a little help from the tax code. Oops.

re: business, changing the world, furniture, offices, unintended consequences

Andy:

Another critical factor in the cubicle’s rapid ascent was Uncle Sam. During the 1960s, to stimulate business spending, the Treasury created new rules for depreciating assets. The changes specified clearer ranges for depreciation and established a shorter life for furniture and equipment, vs. longer ranges assigned to buildings or leasehold improvements. (Today companies can depreciate office furniture in seven years, whereas permanent structures—that is, offices with walls—are assigned a 39.5-year rate.)

The upshot: A company could recover its costs quicker if it purchased cubes. When clients told Herman Miller of that unexpected benefit, it became a new selling point for the Action Office. After only two years on the market, sales soared. Competitors took notice.

That’s when Propst’s original vision began to fade. “They kept shrinking the Action Office until it became a cubicle,” says Schwartz, now 80. As Steelcase, Knoll, and Haworth brought their versions to market, they figured out that what businesses wanted wasn’t to give employees a holistic experience. The customers wanted a cheap way to pack workers in.

Propst’s workstations were designed to be flexible, but in practice they were seldom altered or moved at all. Lined up in identical rows, they became the dystopian world that three academics described as “bright satanic offices” in a 1998 book, Workplaces of the Future.

Designer Douglas Ball, for instance, remembers the first installation of cubicles he created for a Canadian company in 1972. “I thought I’d be excited, but I came out depressed,” says Ball, now 70. “It was Dilbertville. I’d failed to visualize what it would look like when there were so many of them.”

Absolutely fantastic review of the parallel trends in corporate and megachurch architecture, from Spurgeon's Crystal (preaching) Palace to the present. I found the comparison between Saddleback Church's campus and Google's headquarters especially intriguing . . . a reminder that all churches are themselves cultural artifacts, created within the horizons of possibility that a culture creates. But is it just my imagination or does American church architecture almost exclusively adopt, rather than encourage, architectural innovation? Mel McGowan, call your office!

re: architecture, business, churches, corporations

Andy:

The correspondences between the Googleplex and Saddleback are remarkable: Rigid building models were broken down into amorphous, disaggregated masses, screened from their parking lots by trees and artificial hills; both campuses include plush lounges, landscaped paths, beach-volleyball courts, and cafés (with “outdoor seating for sunshine daydreaming,” Google’s website boasts). The architecture is meant to persuade church members or secular employees—especially younger people—to spend their most productive time there. As Google CEO Eric Schmidt has said, “knowledge workers believe they are paid to be effective, not to work 9 to 5.”

It’s no coincidence that Saddleback mirrors the top office environments of its day. Warren was a good friend of [Peter] Drucker’s (the consultant died in 2005), and the books he has written for pastors quote Drucker liberally. Drucker, in turn, was so impressed with the business acumen of evangelical leaders that in 1998 he declared the megachurch “surely the most important social phenomenon in American society in the last 30 years.”

This is an anonymized excerpt from a chat two good friends of mine found themselves having the other night, which touches on the utter importance of local cultures, and the mysterious matter of what makes the difference between those that are helpful and those that aren't. R. is a native Kansan physician, educated on the coasts but now working at a clinic in a sub-1000-population town in her home state; D. is a law student. (See also Atul Gawande's inevitably fascinating New Yorker piece about how differences in local medical culture make healthcare in some places less effective and much more costly.)

re: business, community, cultural worlds, health, medicine

Nate:

D: So the problem isn’t small-town Kansas—it’s a toxic mixture of small-town Kansas plus adolescence?

R: I think so. I like the small-town Kansas where we are now but, believe it or not, small-town Kansas is very heterogeneous. The town where we live now and where I grew up have a lot of significant differences in culture.

D: Tell me more…

R: Mainly it has to do with how people treat each other and how people approach problems. Here, problems are meant to be solved and people have a lot of respect for one another. We have “community conversations” when there’s something that impacts the whole town, and everyone who wants to speak can have their say. Where I grew up, on the other hand, people say all manner of things about other people, and if there’s a problem that affects the town everyone just complains to everyone else. The population even since I left has declined really sharply and everyone just says, “Oh, poor us, look at our dying town, who will save it?” Whereas here they formed an economic development commission and went out looking for new businesses to bring to the community. Some problems are similar, but by and large I think this is a positive place to grow up, and the graduating seniors we know well have said so too.

The other great example of small-town heterogeneity is to look at the counties to the north and south of us. To the north we have County A, where people routinely farm well into their 80’s, have active sex lives into their 90’s, and there has not been a teen pregnancy in almost 10 years. These are the ruddy-cheeked insanely healthy country folk you may have read about. To the south, then, we have County B, where everyone over 40 has diabetes, the obesity rate seems like it’s about 90%, STI’s are rampant and there are currently 8 pregnant girls in the high school. What’s the difference? I have been trying to figure this out. The medical care is exactly the same (it’s our group). The physical infrastructure is not that different. But culturally, people in County B have this victimizing, back-biting mentality.

D: It’s that stark a difference, huh? That’s astonishing.

R: It really and truly is.

Somehow in my teens and twenties I harbored a distinct prejudice against the kind of people who were successful in business. But in my thirties, I began to discover all the gifts methodical, focused, "slightly boring" people bring to the creation and cultivation of culture that artists, writers, and other such fascinating creatures do not. The body politic—not to mention the Body of Christ—needs us all.

re: business, literature, politics

Andy:

[P]eople in the literary, academic and media worlds rarely understand business. It is nearly impossible to think of a novel that accurately portrays business success. That’s because the virtues that writers tend to admire — those involving self-expression and self-exploration — are not the ones that lead to corporate excellence.

For the same reason, business and politics do not blend well. Business leaders tend to perform poorly in Washington, while political leaders possess precisely those talents — charisma, charm, personal skills — that are of such limited value when it comes to corporate execution.

Fortunately, America is a big place. Literary culture has thrived in Boston, New York and on campuses. Political culture has thrived in Washington. Until recently, corporate culture has been free to thrive in such unlikely places as Bentonville, Omaha and Redmond.

A lovely reminder, courtesy of Mother's Day and John Maeda, that cultural creativity is about more than just the product itself—which is why so many successful culture making endeavors are partnerships (and, as in this case, family affairs).

re: 3 12 120, business, family

Andy:

When I was a child and worked in our family business, a tiny tofu store in the International District of Seattle, I recall that although my father’s silently arduous, craftsman approach to tofu was what drew customers from far abouts, it was my mother’s warm Hawaiian personality (she was born and raised in Oahu) that seemed to keep the customers drawn close to our little, and literal, “hole in the wall” shop. By growing up and watching the two of them work together, I learned the basics of business — a superior product delivered with superior customer service. Were it not for my mother, I’d probably have never discovered a way out of my paternally-inspired introverted ways of the silent craftsman; it was my mother that showed me that talking about what you do with a sense of humor and plenty of irreverence was just as important as the tofu that my father made.

Fascinating trivia (and not-so-trivia) about one of the iconic advertisers of my video-camera-obsessed early adolescence.

re: business, horizons of the possible, judaism, sabbath

Nate:

I have often gone into B&H to purchase a specific product, only to be talked into something cheaper. For example, once I went in to buy a field video monitor to use for some interviews I was conducting. I expected to pay $600 until the salesperson said, “Why don’t you just get one of these cheap consumer portable DVD players? They have video inputs, they work just as well, and they’re under $100.” This was no accident. “The entire premise of our store is based upon your ability to come in, touch, feel, experiment, ask, and discuss your needs without sales pressure,” B&H’s website says.

But wait: The conveyer belts, the prices, the smart salespeople, the fact that they recommend cheaper products almost as a rule—none of these is actually the most amazing thing about B&H. Really, the most amazing thing is that because the owners of B&H are Orthodox Jews—Hasidim, in fact—the store closes every Friday afternoon for the Jewish Sabbath, and on Jewish holidays. Moreover, B&H’s website, which reportedly accounts for 70 percent of sales, shuts down, too. Bhphotovideo.com is, to my knowledge, the only major online retailer that closes for 25 hours every weekend.

Provocative and, my gut instinct tells me, basically correct.

re: advertising, business, horizons of the possible, internet

Andy:

My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again. . . .

It is frequently argued that the advertising industry will provide sufficient innovation to replace the loss of traditional ads on traditional mass media. Again, my basic premise rejects this, suggesting that simple commercial messages, pushed through whatever medium, in order to reach a potential customer who is in the middle of doing something else, will fail. It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information. We will see the information we want, when we want it, from sources that we trust more than paid advertising. We will find out what we need to know, when we want to make a commercial transaction of any kind. The conventional wisdom is that this is exactly what paid search helps us to do, but all too often they are nothing more than a form of misdirection . . . [later defined as] diverting customers to companies that they do not wish to find, simply because the customer’s preferred company underbid.

A troubling conundrum: Is it really possible that the better Pixar becomes, the less box office and merchandising potential its films have? However, I think the deeper story here is the pressure that comes from a public liquidity event. Pixar's profitability is a "problem" mostly because of the valuation Disney placed on Pixar when purchasing it for $9B. Selling out is not always bad, but be careful whom you sell out to, and for how much.

re: business, film, pixar, pop culture

Andy:

Adjusted for inflation, Pixar’s films have generated a combined $2.65 billion at North American theaters, a spectacular showing. “Finding Nemo” in 2003 was the high point, selling $405.6 million in tickets.

Pixar’s last two films, “Wall-E” and “Ratatouille,” have been the studio’s two worst performers, delivering sales of $224 million and $216 million respectively, according to Box Office Mojo, a tracking service. Attendance for Pixar films has also dropped sharply over the years, suggesting that ticket price inflation helped prop up overall sales for “Wall-E” and “Ratatouille.”

Retailers, meanwhile, see slim merchandising possibilities for “Up.” Indeed, the film seems likely to generate less licensing revenue than “Ratatouille,” until now the weakest Pixar entry in this area. (“Cars” wears the merchandising crown, with sales of more than $5 billion.) . . .

Perhaps Wall Street would not care so much if Pixar seemed to care a little more. The co-director of “Up,” Pete Docter — who also directed “Monsters Inc.” — said in a recent question and answer session with reporters that the film’s commercial prospects never crossed his mind. “We make these films for ourselves,” he said. “We’re kind of selfish that way.”

John Lasseter, a co-founder of Pixar and now Disney’s chief creative officer, routinely says in interviews that marketability is not a factor in decisions about what projects to pursue. Instead of ideas that feel contemporary, he aims for stories that are rooted in the ages.

“Quality is the best business plan” is one of Mr. Lasseter’s favorite lines.

A typically insightful, indispensable essay by Clay Shirky.

re: business, horizons of the possible, internet, publishing, unintended consequences

Andy:

“If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

With the old economics destroyed, organizational forms perfected for industrial production have to be replaced with structures optimized for digital data. It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.