A new book comes out tomorrow entitled Why Nations Fail: The Origins of Power, Prosperity, and Poverty, by MIT professor of economics Daron Acemoglu and Harvard professor of government James A. Robinson.
In the New York Times Magazine yesterday, Adam Davidson wrote a great piece about it. I pre-ordered the book and look forward to reading, but in the meantime, the New York Times article hints at some key conclusions the authors reach. From the article:
“…the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy… when a nation’s institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help… If national institutions give even their poorest and least educated citizens some shot at improving their own lives — through property rights, a reliable judicial system or access to markets — those citizens will do what it takes to make themselves and their country richer.”
A relatively simple concept: Nations that give citizens opportunities to improve their lives—to create value for themselves—give them the incentive to create value—both for themselves and for the nation collectively.
According to the summary on the authors’ website, the book highlights examples of the theory in action around the world and throughout history, “from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa.”
So how might this theory apply to the study of how organizations can build passionate and sustainable brand communities? If we think of brands as nations, what might make them fail or see great success?
Michael Porter wrote a now-famous piece in HBR last year entitled Creating Shared Value that to me articulates the business equivalent of the principle. Here is how Wikipedia describes Porter’s concept of creating shared value:
“The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognizing and capitalizing on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.”
I think there is a strong connection here, and I would frame it as simply as this:
Brands (and nations) that exist only to extract value from their communities are, in the long run, less competitive and less sustainable than brands (and nations) that exist to create and share value with their communities.
Think about the brands you interact with on a daily basis:
– Which of them are clear value extractors (i.e. they unabashedly exist in order to extract as much money as they can)?
– Which of them are extractors in “shared-value clothing” (i.e. they hide their true selves behind a veneer of shared value)?
– Which of them truly create and share value with the communities that care about them?
If you are like me, some specific organizations immediately come to mind when you see the three categories above. Humor me for a second as I remix the quotes I shared from the New York Times article earlier, but putting them in a brand context:
“…the strength of an organization’s brand community is most closely correlated with the degree to which the average community member shares in the overall success of the organization and community… when an organization prevents the average community member from profiting from its work, no amount of PR, advertising, or charitable giving seems to help… If organizations give even their average community members some shot at becoming more successful — through providing innovative products, experiences, and connections to new people or opportunities — those community members will do what it takes to make themselves, the organization, and the overall brand community richer.”
I suspect that organizations interested in building passionate brand communities have a lot to learn from Why Nations Fail.
And I’ll let you know what I personally learn once I’ve had a chance to read it.
This week I finally got a chance to sit down and digest IBM’s latest Global CEO Study, newly published last month and entitled Capitalizing on Complexity. This marks the fourth study IBM has done (they complete them once every two years), and I’ve personally found them to be really useful for getting out of the weeds and looking at the big picture.
This report is based on the results of face-to-face meetings with over 1500 CEOs and other top leaders across 60 countries and 30+ industries. These leaders are asked all sorts of questions about their business challenges and goals, then IBM analyzes the answers and segments the respondents to isolate a group of high-performing organizations they call “standouts.” The standouts are then further analyzed to find out how they are addressing their challenges and goals differently than average organizations.
As a quick summary (but don’t just read my summary, go download the study for free), IBM found a big change this year. In the past three studies, leaders identified their biggest challenge as “coping with change.” This year, they identified a new top challenge: “complexity.”
If you’ve been reading marketing collateral or web copy from your vendors over the past year (someone must read that stuff…) this will come as no surprise to you. How many things have you read that start with something like: “In our increasingly complex world…” or “In the new deeply interconnected business landscape…” If the marketing folks are saying it, it must be true.
But I digress. Here’s IBM’s punch line:
[Read the rest of this post on opensource.com]
If you’ve ever watched a road bike race like the Tour de France, you know the peloton is the big group of riders that cluster together during the race to reduce drag. It’s a great example of collaboration in action. But let’s face it: the people in the middle of the peloton may go faster than they would otherwise, but they don’t win the race.
When it comes to creating and innovating, most companies (and employees) are in the peloton. They are doing enough to survive, but they are stuck in the pack. And if they stay in the pack too long, they lose.
Escaping the peloton is tough. Often, you see a cyclist break away, sprint for a while, only to get sucked back into the main group over time as the pressures of making a go independently prove too much.
You’ve probably felt this way at work. You come up with an amazing idea, one that will change the company forever. But little by little, people—even the well-meaning ones—chip away at its soul, until the idea goes from being amazing to, well, average. You end up being sucked back into the peloton.
After this happens one too many times, you may feel like you want to stop collaborating and try to make things happen on your own. Don’t do it. Even Lance Armstrong could rarely break away from the peloton without his teammates’ help.
Instead, here are three tips to help you escape the creativity peloton without giving up on collaboration.
[Read the rest of this post on opensource.com]
I’m not usually a germophobe, but the last few months I’ve been walking around opening doors with my elbows and washing my hands constantly. I’ve been freaked out by the constant updates on Facebook about what my friends/friends’ kids have come down with now. So far, my immune system has held up pretty well, but I always worry that H1N1 is only a doorknob away.
These are trying times for corporate immune systems too. The economic meltdown has exposed corporations to all sorts of risks they don’t deal with in the regular course of business. Many corporate immune systems have failed, putting millions of people out of work. It begs the question: how resilient is your company? And how can you make your corporate immune system stronger?
I got to thinking about this corporate immune system concept after reading the new book The Age of the Unthinkable: Why the New World Disorder Constantly Surprises Us And What We Can Do About It by Joshua Cooper Ramo. In this fantastic book, Ramo (former foreign editor of Time Magazine, now a foreign policy/strategy consultant at Kissinger Associates) offers his thoughts on what we as a society need to do to adapt to a rapidly changing world.
Ramo talks a lot about the idea of creating a stronger global immune system. Here’s what he means:
“What we need now, both for our world and in each of our lives, is a way of living that resembles nothing so much as a global immune system: always ready, capable of dealing with the unexpected, as dynamic as the world itself. An immune system can’t prevent the existence of a disease, but without one even the slightest of germs have deadly implications.”
Ramo presents this in idea in the context of how we protect ourselves from a scary world– terrorists, rogue nations, nuclear proliferation, and all that, but the concept applies well to the corporate world as well– tough competitors, fickle customers, shrinking budgets– we corporate folks have our own demons.
So how do we shore up the ol’ immune system? Ramo refers to the philosophy of building resilience or “deep security” into the organization. Continue reading
Last night, Red Hat President and CEO Jim Whitehurst gave a talk to a group made up of mostly students and faculty at the NC State School of Engineering. Nice writeup of it in the student newspaper here. His ideas were very timely for me; just the other day, I wrote a post with some tips for companies with 20th century cultures trying to make the move into the 21st century.
Jim Whitehurst is in a rather unique position because he has managed both an icon of the 20th century corporation (Delta Airlines) and what we’d like to think is a good example of the 21st century corporation here at Red Hat.
Because of his experiences, Jim is able to clearly see and articulate the differences between the old model of corporate culture, based on classic Sloan-esque management principles, and the emerging model, based in many ways on the power of participation broadly (and in our case, the open source way specifically).
One very simple point Jim made that really struck me: Companies with 20th century business models need to realize that they are already hiring 21st century employees.
People coming out of school today have grown up in an age where the ability to participate and share broadly is all they’ve known. These folks have grown up with email accounts, the Internet, Facebook, and all of the other trappings of a connected world.
So when they graduate from school and take jobs working in old-style corporate cultures, where progressive principles like transparency, collaboration, and meritocracy lose out to the old world of control, power, and hierarchy, what happens?