Feb 21, 2014

THE INTELLIGENT INVESTOR

The ABCs of Investors’ DNA

JASON ZWEIG

Some people become value investors. Some might be born that way.

Consider Benjamin Graham, Warren Buffett’s mentor and the author of “Security Analysis” and “The Intelligent Investor.”

Graham’s widowed mother was a small-time speculator; she was wiped out during the Panic of 1907, when he was 13 years old. Read more of this post

Make a Crisis Last: How to convert extraordinary behaviors into ordinary parts of your culture.

Posted: February 17, 2014

Jon Katzenbach is a senior executive advisor with Booz & Company based in New York, and co-leads the firm’s Katzenbach Center.

Make a Crisis Last

When a machine jammed at an Alcoa plant in Arizona, a young, overzealous worker who was eager to keep his job stepped over the safety line to repair it. But disastrously, after he unjammed the machine, a large swinging arm was released that struck and killed him. Read more of this post

Rita Gunther McGrath on the End of Competitive Advantage; The Columbia Business School professor says the era of sustainable competitive advantage is being replaced an age of flexibility. Are you ready?

Published: February 17, 2014 / Spring 2014 / Issue 74

Rita Gunther McGrath on the End of Competitive Advantage

The Columbia Business School professor says the era of sustainable competitive advantage is being replaced an age of flexibility. Are you ready?

by Theodore Kinni

Rita Gunther McGrath thinks it’s time for most companies to give up their quest to attain strategy’s holy grail: sustainable competitive advantage. Neither theory nor practice of strategy has kept pace with the realities of today’s relatively boundaryless and barrier-free markets, says the associate professor at the Columbia University Graduate School of Business. As a result, the traditional approach of building a business around a competitive advantage and then hunkering down to defend it and milk it for profits no longer makes sense. Read more of this post

Creaky Trains Made of Bamboo Still Rule the Rails in Cambodia

Creaky Trains Made of Bamboo Still Rule the Rails in Cambodia

They Carry People, Logs, Booze, Coconuts; Like a Ride on a ‘Bat,’ Says One Mom

JESSE PESTA

Feb. 19, 2014 10:30 p.m. ET

Cambodia’s homemade trains, made by hand of wood and bamboo and known locally as “norrys,” shuttle passengers across the countryside on the remnants of a defunct rail system. WSJ’s Jesse Pesta reports from Battambang, Cambodia. Read more of this post

A Formal Theory of Strategy Eric Van den Steen Harvard Business School – Competition & Strategy Unit December 14, 2013 Harvard Business School Strategy Unit Working Paper No. 14-058 Abstract: What makes a decision strategic? When is strategy most important? This paper studies the structure and value of strategy (in its everyday sense), starting from a (functional) definition of strategy as ‘the smallest set of (core) choices to optimally guide the other choices.’ This definition captures the idea of strategy as the core of a – potentially flexible and adaptive – intended course of action. It coincides with the equilibrium outcome of a ‘strategy formulation game’ where a person can – at a cost – look ahead, investigate, and announce a small set of choices to the rest of the organization. Starting from that definition, the paper studies what makes a decision ‘strategic’ and what makes strategy important, considering commitment, irreversibility, and persistence of a choice; the presence of uncertainty (and the type of uncertainty); the number and strength of interactions and the centrality of a choice; its level and importance; the need for specific capabilities; and competition and dynamics. It shows, for example, that irreversibility does not make a decision more strategic but makes strategy more valuable, that long-range strategies will be more concise, why a choice what not to do can be very strategic, and that a strategy ‘bet’ can be valuable. It shows how strategy creates endogenously a hierarchy among decisions. And it also shows how understanding the structure of strategy may enable a strategist to develop the optimal strategy in a very parsimonious way.

A Formal Theory of Strategy

Eric Van den Steen 

Harvard Business School – Competition & Strategy Unit
December 14, 2013
Harvard Business School Strategy Unit Working Paper No. 14-058

Abstract: 
What makes a decision strategic? When is strategy most important? This paper studies the structure and value of strategy (in its everyday sense), starting from a (functional) definition of strategy as ‘the smallest set of (core) choices to optimally guide the other choices.’ This definition captures the idea of strategy as the core of a – potentially flexible and adaptive – intended course of action. It coincides with the equilibrium outcome of a ‘strategy formulation game’ where a person can – at a cost – look ahead, investigate, and announce a small set of choices to the rest of the organization.
Starting from that definition, the paper studies what makes a decision ‘strategic’ and what makes strategy important, considering commitment, irreversibility, and persistence of a choice; the presence of uncertainty (and the type of uncertainty); the number and strength of interactions and the centrality of a choice; its level and importance; the need for specific capabilities; and competition and dynamics. It shows, for example, that irreversibility does not make a decision more strategic but makes strategy more valuable, that long-range strategies will be more concise, why a choice what not to do can be very strategic, and that a strategy ‘bet’ can be valuable. It shows how strategy creates endogenously a hierarchy among decisions. And it also shows how understanding the structure of strategy may enable a strategist to develop the optimal strategy in a very parsimonious way.

Bringing New Apps to Market: How Five Innovators Outshone the Competition

Bringing New Apps to Market: How Five Innovators Outshone the Competition

Feb 19, 2014

While the public’s desire for specialized applications for their mobile devices continues to grow, questions of scale and long-term viability remain.

To that end, the University of Pennsylvania’s Center for Technology Transfer initiated AppitUP, a contest for Penn-related individuals and teams to create innovative applications, with the opportunity to have software development firms help them get those apps out on the market. Read more of this post

Think Your Product Is Too Boring for Word of Mouth Marketing? Think Again

Think Your Product Is Too Boring for Word of Mouth Marketing? Think Again

Feb 17, 2014

Word of mouth has become the Holy Grail for today’s marketers. Word-of-mouth marketing, also called word-of-mouth advertising or WOM, is 10 times more effective than traditional advertising, according to Jonah Berger, a Wharton marketing professor. “A great deal of research has demonstrated that word of mouth affects choice, diffusion [the process by which a group of people adopts a product] and sales,” writes Berger. Read more of this post

Lessons From Inside The $800 Million Girl Scout Cookie Selling Empire

LESSONS FROM INSIDE THE $800 MILLION GIRL SCOUT COOKIE SELLING EMPIRE

IT’S NOT ALL CAMPFIRE SONGS AND GOOD DEEDS. GIRL SCOUT COOKIE SALES ARE BIG BUSINESS, TO THE TUNE OF NEARLY $800 MILLION LAST YEAR. HERE ARE THE BUSINESS SKILLS THE FUTURE LEADERS ARE BUILDING.

BY LINDSAY LAVINE

They are everywhere this time of year, and for most people they are an irresistible product they always come back to: Girl Scout cookies.

For 97 years, Girl Scouts across America have participated in the cookie sales program, which has raised nearly $800 million each of the last two years. Read more of this post

What Lego has in common with Apple; The blockbuster box office results for The Lego Movie underscore the Danish construction-toy company’s success. And it shares a key quality with Apple — one that more companies should emulate.

What Lego has in common with Apple

February 18, 2014: 12:32 PM ET

The blockbuster box office results for The Lego Movie underscore the Danish construction-toy company’s success. And it shares a key quality with Apple — one that more companies should emulate. Read more of this post

The Right Way to Answer “What’s Your Greatest Weakness?”

The Right Way to Answer “What’s Your Greatest Weakness?”

by David Reese  |   11:00 AM January 17, 2014

Thomas Jefferson once said that “honesty is the first chapter in the book of wisdom”. Though truth-telling abounds in grade school platitudes, it seems scarcer the older we get. But this decline in honesty — let’s call it dishonesty — isn’t necessarily innate. Dishonesty can be taught. In my experience, I’ve noticed that, of all culprits, college career centers are exceptional traffickers of such miseducation. In the process, they’re hurting their brightest students’ chances of making it in the world of startups by convincing them to give dishonest answers to tough interview questions. Read more of this post

How to keep the ‘family’ in the family business; Fewer than 15% of family owned companies will still be held by the same family beyond the third generation. Here are some tips that might help your family survive the transition

How to keep the ‘family’ in the family business

Drew Hasselback | February 18, 2014 7:00 AM ET
I have written about prepping for business succession in the past. Other FP Entrepreneur columnists have addressed the topic, too.

Those columns discussed succession in general. But what about succession in a family business? Less than 15% of family owned companies will still be held by the same family beyond the third generation, according to one study. The family dynamic amplifies some of the emotional issues that arise in succession talks, and it erodes some of the caution that might otherwise be present in situations where business owners aren’t related. Read more of this post

Working cheek by jowl with your family can be fraught with difficulty. Now there is a growing body of evidence to show that the family business environment can also be a big enabler of addiction problems in the heirs to the business

KICKING THE HABIT

ARTICLE | 18 FEBRUARY, 2014 12:53 PM | BY TESS DE LA MARE

There is no such thing as a stereotypical addict. Extreme wealth and an unhealthy penchant for narcotics have long been bedfellows, as proved by the slew of celebrities that check into rehab each year, but then again, addiction and poverty aren’t strangers either. It is almost impossible to run a line of best fit through the characteristics and backgrounds of addicts. But all that said, there is worrying evidence to show the rate of drug or alcohol dependency in family businesses is much higher than in their non-family counterparts. Read more of this post

Group therapy for business founders

February 18, 2014 4:05 pm

Group therapy for business founders

By Andrew Bounds and Jonathan Moules

In the back room of a brewery in the northwest of England, the boss of a family-owned manufacturer is discussing India. He explains to the assembled group – which is made up of owner-managers just like him – that his attempt to set up a factory in India has so far only led to frustration.

With properties hard to find and a local agent dragging its feet, he asks the others if he should find another partner. “How can you build trust over a distance?” he asks. Read more of this post

We need backers who watch and wait; I admire those entrepreneurs who have the indefatigable energy to stick with a radical project through thick and thin. They must possess both a sense of urgency and superhuman persistence

February 18, 2014 3:50 pm

We need backers who watch and wait

By Luke Johnson

Lots of young founders expect lightning progress and startling pay-offs within a short timeframe

Anyone who knows me is aware that I’m an impatient fellow. But the odd thing is that I’ve chosen a career where patience is essential.

I buy part of a company, nurture it and wait. At heart, capitalism is essentially the deferral of rewards. Instead of working and receiving a monthly salary, investors in private companies risk their funds and hope for a capital gain, perhaps half a decade hence. Usually such companies are expanding and need to reinvest their earnings. They cannot even pay an income to the owners in the meantime. Read more of this post

Attempts to count a nation’s assets date back to the Bible. But the Enlightenment saw the first efforts to do so in a precise way

Book Review: ‘The Leading Indicators,’ by Zachary Karabell

Attempts to count a nation’s assets date back to the Bible. But the Enlightenment saw the first efforts to do so in a precise way.

JOSEPH STERNBERG

Feb. 18, 2014 6:45 p.m. ET

China is in an economic swoon at the moment, if you believe some recent readings suggesting that industrial activity is slowing. Investors in Japan were spooked last month by a record trade deficit in 2013. Closer to home, economists debate quarterly GDP numbers in the U.S. to determine how the current recovery compares with those in the past. Read more of this post

Strategy and the Strategist: How it Matters Who Develops the Strategy

Strategy and the Strategist: How it Matters Who Develops the Strategy

Eric Van den Steen 

Harvard Business School – Competition & Strategy Unit
December 14, 2013
Harvard Business School Strategy Unit Working Paper No. 14-057

Abstract: 
This paper studies how strategy – formally defined as ‘the smallest set of (core) choices to optimally guide the other choices’ – relates to the strategist, for example, whether an optimal strategy should depend on who is CEO. The paper first studies why different people may systematically consider different decisions ‘strategic’ – with marketing people developing a marketing-centric strategy and favoring the marketing side of business – and derives two rational mechanisms for this outcome, one confidence-based and the other implementation-based. It then studies why it matters that it is the CEO and important decision makers (rather than an outsider) who formulate the strategy and shows that outsider-strategists often face a tradeoff between the quality of a strategy and its likelihood of implementation, whereas the CEO’s involvement helps implementation because it generates commitment, thus linking strategy formulation and implementation. In some sense, the paper thus explains why strategy is the quintessential responsibility of the CEO. Moreover, it shows that the optimal strategy should depend on who is CEO. It then turns that question around and studies strategy as a tool for exerting leadership, asking when the set of strategic decisions are exactly the decisions a CEO should control to give effective guidance. It finally shows how a CEO’s vision, in the sense of a strong belief, about strategic decisions makes it more likely that the CEO will propose a strategy and that that strategy will be implemented. But strong vision about the wrong decisions, such as subordinate or others’ decisions, may be detrimental to strategy and its implementation.

The Other Factor that Makes an Idea Spread

The Other Factor that Makes an Idea Spread

by Julianne Wurm  |   11:00 AM February 17, 2014

How do ideas spread? Previous research has focused on what happens to the sharers of an idea: what emotions they feel, what types of content inspire them to share (practical, funny, “sticky” and so on). And it is true that from memetics to mirror neurons to social contagion, it is likely that for any given idea, multiple factors are involved.  And yet the role of content seems to get all of the focus.  There are scores of books written about how to make your content “go viral” or “become contagious” and take on a life of its own. We seem to overlook — or at least undervalue — the role of the person delivering the idea: the carrier. Read more of this post

32 American Presidents Share Their Best Life Advice

32 American Presidents Share Their Best Life Advice

LYDIA DALLETT STRATEGY  FEB. 17, 2014, 11:25 AM

Some of them hated it. Some of them loved it. All of them learned from it.

Since George Washington’s inauguration, 44 men have occupied the White House to perform one of the most difficult jobs in the world. Some defined their terms with great accomplishments or grave misjudgments; others barely made a mark on history. Yet all strove to fulfill their mandate to the best of their abilities and live up to the incredible expectations placed upon them. Read more of this post

An investment banker at JP Morgan jumped to his death from the roof of the bank’s headquarters in HK’s Central yesterday

Investment banker jumps to death from JP Morgan’s headquarters in Central

Tuesday, 18 February, 2014, 4:49pm

George Chen, Clifford Lo and Jeanny Yu

An investment banker at JP Morgan jumped to his death from the roof of the bank’s headquarters in Central yesterday.

Witnesses said the man went to the roof of the 30-storey Chater House in the heart of Hong Kong’s central business district and, despite attempts to talk him down, jumped to his death.

Out of respect for those involved, we cannot yet comment further. Our thoughts and sympathy are with the family that’s involved at this difficult time Read more of this post

Lee Hsien Loong on What Singapore Can – and Can’t – Teach China; Prime minister discusses the city-state’s efforts to fight graft, build institutions and set economic policy – and the ways it is and isn’t an example for China

02.17.2014 14:57

Lee Hsien Loong on What Singapore Can – and Can’t – Teach China

Prime minister discusses the city-state’s efforts to fight graft, build institutions and set economic policy – and the ways it is and isn’t an example for China

By staff reporters Hu Shuli and Zhang Hong

(Singapore) – As one of the Four Asian Tigers, Singapore is known for its strong economy and orderly society. The city-state, with its population of 5.3 million people, is listed by the World Bank as No. 4 in the world in terms of per capita income. As a regional business hub, it is lauded for its sound business reputation and the transparency of its government. Read more of this post

Do you have the “good” kind of perfectionism? The right kind of perfectionism drives you toward success; the wrong kind shackles you with self-doubt. To spot the difference, we’ll need to investigate the blemishes in both

DO YOU HAVE THE “GOOD” KIND OF PERFECTIONISM?

THE RIGHT KIND OF PERFECTIONISM DRIVES YOU TOWARD SUCCESS; THE WRONG KIND SHACKLES YOU WITH SELF-DOUBT. HERE’S HOW TO SPOT THE DIFFERENCE.

BY DRAKE BAER

The right kind of perfectionism drives you toward success; the wrong kind shackles you with self-doubt. To spot the difference, we’ll need to investigate the blemishes in both.

Psychologists call the productivity-stifling kind of perfectionism evaluative concern perfectionism: it has self-consciousness at its center, marked by a profound concern for how others see you. As psych writer Alex Fradera reports, this leads to high levels of hassle and distress in people’s lives–and the use of avoidance as a way of dealing with problems. Because the evaluative perfectionist is so concerned with making mistakes in someone else’s eyes, they put off any tasks that might make those mistakes possible. Read more of this post

The Critical Few: Components of a Truly Effective Culture; Forget the monolithic change management programs and focus on the elements of your culture that drive performance

February 11, 2014 / Spring 2014 / Issue 74

The Critical Few: Components of a Truly Effective Culture

Forget the monolithic change management programs and focus on the elements of your culture that drive performance.

by Jon Katzenbach, Rutger von Post, and James Thomas

Sometimes corporate culture manifests itself in a make-your-own-taco party in the office kitchenette. Sometimes you can see it when an outdated phone bank is converted into an on-site ice cream shop. And sometimes it’s on display when senior leaders pick up paintbrushes to turn formerly bland office walls into electric blue work spaces. These are examples of the “Culture Blitz” at work at Southwest Airlines Company, where a 40-year culture is still going strong and is further invigorated by traveling teams who volunteer every year to visit hundreds of employees to show their appreciation. And it’s infectious. Read more of this post

The prodigal son parable provides an apt lesson as we strive to craft modern social policies

The Prodigal Sons

FEB. 17, 2014

David Brooks

We take as our text today the parable of the prodigal sons. As I hope you know, the story is about a father with two sons. The younger son took his share of the inheritance early and blew it on prostitutes and riotous living. When the money was gone, he returned home.

His father ran out and embraced him. The delighted father offered the boy his finest robe and threw a feast in his honor. The older son, the responsible one, was appalled. He stood outside the feast, crying in effect, “Look! All these years I’ve been working hard and obeying you faithfully, and you never gave me special treatment such as this!” Read more of this post

Three Decisions that Defined George Washington’s Leadership Legacy

Three Decisions that Defined George Washington’s Leadership Legacy

by Nick Tasler  |   9:00 AM February 17, 2014

A cynic might conclude that George Washington, the first president of the United States, owes his legacy to his towering physical stature and other superficial characteristics. The man looks like a leader, and perhaps that made him a convenient figurehead on which we  hang idealized virtues. But the cynic would be mistaken. Here are three counter-intuitive decisions Washington made that show what an exceptional leader he truly was.

1. General Washington decided not to impose a battlefield strategy on his field commanders. The general consensus among historians is that Washington was a mediocre military strategist at best.  However, a recent study in the Academy of Management Journal cast some doubt on that consensus. Read more of this post

Scaling up excellence requires idiosyncratic talent: Hayagreeva Rao, Professor

Scaling up excellence requires idiosyncratic talent: Hayagreeva Rao, Professor

Priyanka Sangani, ET Bureau Feb 14, 2014, 04.49AM IST

In 2006, Professor Hayagreeva (Huggy) Rao and Robert Sutton were teaching a short course on ‘Customer Focussed Innovation’ at Stanford University. Rao, the Atholl McBean Professor of Organizational Behaviour and Human Resources, Stanford University says that one recurring question was on how to scale up the pockets of excellence in an organization. Read more of this post

Li Ka-Shing teaches you how to buy a car & house in 5 years; Hong Kong billionaire Li Ka-Shing shares some of his money wisdom, outlining an inspirational five-year plan to improve one’s lot in life

Li Ka-Shing teaches you how to buy a car & house in 5 years

Hong Kong billionaire Li Ka-Shing shares some of his money wisdom, outlining an inspirational five-year plan to improve one’s lot in life

This article is translated from the original Chinese by Edmund Ng at CeoConnectz.

Suppose your monthly income is only RMB 2,000, you can live well. I can help you put money into five sets of funds. The first $600, second $400, third $300, fourth $200, fifth $500.

The first set of funds is used for living expenses. It’s a simple way of living and you can only be assigned to less than twenty dollars a day. A daily breakfast of vermicelli, an egg and a cup of milk. For lunch just have a simple set lunch, a snack and a fruit. For dinner go to your kitchen and cook your own meals that consist of two vegetables dishes and a glass of milk before bedtime. For one month the food cost is probably $500-$600. When you are young, the body will not have too many problems for a few years with this way of living. Read more of this post

Can Reader’s Digest return to its glory days with Frisky 50s? New owner Mike Luckwell spells out plan to expand 76-year-old UK publication into new fields after buying it for a nominal sum

Can Reader’s Digest return to its glory days with Frisky 50s?

New owner Mike Luckwell spells out plan to expand 76-year-old UK publication into new fields after buying it for a nominal sum

Reader’s Digest was first published in 1938 in the UK

By James Titcomb

3:54PM GMT 17 Feb 2014

In an episode of the 1960s period drama Mad Men, an advertising executive puffs on his cigarette and curses a crackdown on tobacco marketing. Read more of this post

A Great Teammate Is a Great Listener

A Great Teammate Is a Great Listener

FEB. 15, 2014

By ADAM BRYANT

This interview with John W. Rogers Jr., chairman, chief executive and chief investment officer of Ariel Investments, based in Chicago, was conducted and condensed by Adam Bryant.

Q. Were you in leadership roles early on?

A. Sports were a big part of my life. I was the captain of the basketball team in high school, and captain of the basketball team at Princeton. I had some informal roles, too. I was a vendor at Wrigley Field and White Sox Park from the age of 16 to 22. I sold Cokes, beer, peanuts and popcorn. Ultimately, I got a lot of my friends to come along and work as vendors. Read more of this post

Fear kills more dreams than failure: Nickelodeon’s Mark Cheng

Fear kills more dreams than failure: Nickelodeon’s Mark Cheng

By Terence Ng

Cheng talks abt his passion for film-making, web designing being more ‘stable’, journey to Nickelodeon, and how to make it big in the US…

For many Asians, whether from the startup scene or otherwise, the US market represents the final frontier — a goal that if achieved will be the crowning glory of one’s career. One need only look at how many Asian entertainers — for example, Jackie Chan and Gong Li — had their careers supercharged when they managed to break successfully into the American market.

Mark Cheng, Executive Producer at Nickelodeon, a US media company owned by Viacom, details his experiences as an immigrant to the States, and shares how Asians can achieve success in a big market as the US. Read more of this post

Lessons on how to talk like TED

February 17, 2014 4:34 pm

Lessons on how to talk like TED

By Sam Leith

What is it about TED talks that has made them so successful, and what can the business speaker learn from them? A new book marking their 30th year, Talk Like TED: The 9 Public-Speaking Secrets of the World’s Top Minds by Carmine Gallo, promises to tell us. Read more of this post