Transformation from good to great companies often seems revolutionary and dramatic. The transformation is indeed an accumulation of long processes.
Although the end results look dramatic, a transformation from good to great never occurs only in one heroic action. The transformation is like moving a giant, heavy flywheel consistently in a long run. This process is a build-up process, step by step, until the flywheel movement reaches a momentum and finally results in a breakthrough.
Unlike a successful one, a bad, failing transformation take a different route. It forces to take a shortcut and jump to a breakthrough. It is full of fanfare, slogan, and heroic actions, but it is not focus and consistent. The result is a failure that needs to be mitigated, but the mitigation if often again full of fanfare, slogan, and heroic actions. The cycle is called the doom loop.
The successful transformation from good to great is the research conducted by Jim Collins and colleagues. Based on the research, they write a best-seller book, Good to Great. To read the summary, please follow the following links.
Good to Great (1)
Good to Great (2)
Good to Great (3)
Good to Great (4)
Good to Great (5)
Good to Great (6)
Good to Great (7)
Saturday, March 29, 2008
Good to Great
Good to Great (7)
Great companies do not follow the suit in acquiring new technology as other do it. They only use and apply technology on top of good and healthy businesses. Technology accelerators do mean that technology should match and support the concept of a great business. In other words, we should say here that technology cannot create great businesses, but it can take the role of a catalyst or accelerator.
Good to Great (6)
The fifth factor that makes good companies transform to great companies is a culture of discipline. It entails discipline people, a discipline concept, and discipline actions. Without a culture of discipline, a company has to add an unnecessary bureaucracy. Jim Collins moreover writes that a company’s bureaucracy is needed only if it has no culture of discipline. To develop a good culture, Collins and friends underline the importance of having the right people in the first place. Because it also entails a discipline concept, a culture of discipline needs a clear and simple – hedgehog – concept.
Discipline people (not tyrant) are the ones willing to spend more time and effort to gain better results. The discipline people then are able to run the business based on a discipline concept and are able to avoid other irrelevant businesses. In running a hedgehog business and avoiding other irrelevant ones, they act with discipline in mind.
Good to Great (5)
A great company has a clear and simple business concept. The concept should be as simple as a hedgehog’s strategy to prevent attacks from its enemy, a fox. A great company’s hedgehog concept comes from the answers to three questions. (a) Is it a business in which you can be the best in the world? (b) Is it a business that makes you on fire? (c) Is it a business that makes profit? The hedgehog concept requires your business to have positive (yes!) answers to the three all together. If your business fails in answering those three questions, do not do that business. Focus!
Saturday, February 23, 2008
Good to Great (4)
Great companies always face reality, however fierce. This is the third factor: confront the brutal fact. Just honest facing and accepting the fierce reality, great companies are usually able to see the solution easily. Well, to disclose the brutal facts, great companies’ level 5 leaders create open and transparent culture. They guarantee that all employees will be heard. The practices of level 5 leaders in this matter are (a) start with questions, not the answers; (b) create and facilitate dialogs and discussions, not dictating solutions; and (c) analyze and seek the problems, but not blaming people or finger-pointing.
For open interactions to occur, level 5 leaders limit their charisma so that employees are expected to have no hesitation to communicate with them. One last thing, motivating employees to accept and face brutal facts is only wasting time. That is why level 5 leaders are very concerned in getting the right people in the bus (see the second factor of good to great companies) from the beginning.
Thursday, February 14, 2008
Good to Great (3)
The second factor of good-to-great company transformation is the “who” factor. A level 5 leader starts the transformation by looking for the right persons to accompany him at the executive level. Together they determine the company’s direction, strategy, and system. This is called “first who… then what” by Jim Collins. Consistent with this principle, the level 5 leader is then very decisive in getting the right persons in the bus and getting the wrong persons off the bus. However very decisive, the level 5 leader does this “getting in and getting off” in quite a sensitive and careful way. He is not a tyrant, though very committed to the “first who… then what” principle.
In managing people, a level 5 leader practices the following habits. First, he will not recruit a person if in doubt of his competence, although still monitoring him for a while. Second, if change has to be made, he acts immediately without delay. Third, he puts his best man in the most potential initiatives, not in positions with problems.
Decision-making lead by a level 5 leader can be full of discussions and debates. Nevertheless, after a decision is made, all adhere to it. Probably surprising is the fact that management compensation is not that important because the right persons are self-motivated. They do not need an excessive motivation measure. Last but not least, probably equally surprising is the fact that the right people are not determined by certain knowledge, background, and expertise, but more by character.
Tuesday, February 12, 2008
Good to Great (2)
A level 5 leader is a person already exceeds four levels of competence, i.e individually capable (level 1), contributing member (level 2), effective manager (level 3), and visionary leader (level 4). At the beginning of their research, Jim Collins and team tried to denounce the leader role in transforming a company from good to great. Nonetheless, the research shows the opposite. In the critical transition period, the great companies indeed were lead by level five leaders whose characteristics are:
With regard to the third and fourth characteristics above, a level 5 leader always acknowledges fortune and help of others as the reason for the company greatness.
In my next post, we will discuss the second factor… First Who… Then What.
Good to Great (1)
One of my favorite books is Jim Collins’ Good to Great, an international best seller. Jim Collins and his team wrote the book based on a very serious research. The research was conducted on eleven companies (1965-1995) that in fifteen years (1980-1995) accumulated return at least three times each industry’s average, after for fifteen years before (1965-1980) were only average companies or worse. The eleven companies are compared to competitors that were only average or worse. The research was also equipped with observations to a few companies that once were great but could not last. According to Jim Collins and team, the factors for a company transformation from good to great are:
What does each factor mean? Wait for my next post.
Saturday, February 9, 2008
The Tipping Point
Best seller The Tipping Point is one of my favorite books. I try to summarize the book into a less than twenty-page reading. Hope you enjoy this. If you like it and think others may get benefits from this summary, you may let your friends know about it. However, if you don't like it, please give your comments and let me know.
After Super Tuesday you may need to read something outside the politic arena. To read the summary, please follow the links (so far I have summarized all but the endnotes; although the endnotes is an interesting part, I would not post its summary here; if you really like to read it, just leave your comment or email me):
The Tipping Point 1 - Introduction and Chapter 1
The Tipping Point 2 - Chapter 2
The Tipping Point 3 - Chapter 3
The Tipping Point 4 - Chapter 4
The Tipping Point 5 - Chapter 5
The Tipping Point 6 - Chapter 6
The Tipping Point 7 - Chapter 7
The Tipping Point 8 - Chapter 8
The Tipping Point 8
Chapter VIII: Conclusion – Focus, Test, and Believe
Georgia Sadler, a public health nurse, tried to promote the awareness of the danger of breast cancer and diabetes in San Diego. First, she tried to arrange seminars in black churches, but the attendance was very discouraging. Then she thought that she had to give her message a different context, as well as a different kind of messengers – a little bit connectors, a little bit salesmen, and a little bit mavens. Afterward, she decided to spread the words from beauty salons where stylists and their customers often spent hours together, in long-term relationships. After training a bunch of stylists, devising an appropriate system, and executing the communication program in beauty salons for a while, she knew that it worked.
Like other cases in this book, Sadler’s case also showed similar characteristics. Her effort was modest – little. She changed the context, the messengers, and the message itself. She started with the connectors, the salesmen, and the mavens, since no one else matters in starting an epidemic. She also focused on critical places, i.e. the beauty salons. With regard to message itself, she devised supporting materials most fit in beauty salons. The message is printed in a large size; the sheets were laminated in order to face salons’ busy life. The message was also conveyed to the targeted women in a form of conversations between stylists and their customers.
Because of the modesty of the epidemic cases presented in this book, we can say the tipping point is all about band-aid solutions. Yes, it is. Although we all have a good tendency to solve problems in a comprehensive, ideal, and long-term way, we should admit that band-aid solutions enable people to continue their various activities, unless without band-aid they should stop. To solve problems in life, the combination of comprehensive solutions and band-aid solutions is a must because an indiscriminate implementation of only one solution is often not possible.
However modest the way of tipping point seems to be, we should aware three things to make its implementation effective. First, we should change our paradigm that dramatic effects are only possible. Traditionally we cannot understand that if we fold a sheet of paper fifty times, the folded sheet can reach the sun. Second, we should deliberately test our intuition to reveal unobvious evidences and consequences. Look again at the cases presented in this book, especially Sesame Street and Blue Clues. Third, we should admit that change is possible. While traditionally we assume that people are autonomous and self-directed, we should concede that actually human’s behavior is very susceptible to a little change in the environment and others’ action.
Now, look around you. You may think that it is useless even to try a change because it is impossible. Your place (your home, your RT, your RW, your office, your community, your city, your country – Y Pan) seems implacable and hopeless. The truth is… IT IS NOT! WE HAVE A CHANCE!
The Tipping Point 7
Chapter VII: Case Study – Suicide, Smoking, and the Search for Unsticky Cigarette
In 1960 suicide in Micronesia was an unknown phenomenon, while at the end of 1980’s Micronesia’s suicide rate was highest in the world, seven times higher than that of US. The suicides were mainly committed by teenage males and triggered by trivia, domestic problems such as problems with parents, brothers, girlfriend, etc. A study showed that the characteristic of the suicides was imitative and experimental, even almost recreational. Something rare and random in a normal world became trivial in Micronesia. Why?
Let us set aside the Micronesia’s suicide cases. In the US, a traditional anti smoking approach does not succeed in preventing teens from smoking. Indeed, in the past, the traditional antismoking campaign was backfiring, increasing teen smokers. Apparently, it is not enough just to tell teens about the danger of smoking. A research shows that teen smoking is not about rational reasons; it is about a mysterious behavior. Like suicide phenomenon in Micronesia, it is imitative and experimental, not to mention recreational.
The imitative behavior has been studied intensively by a lot of researches. One research studied how a street accident publicized in the news attracted more fatalities in the following days. The first incident gives permission to certain people. The person who gives “permission” to do something, like committing suicide and smoking, is called a permission giver, the role of a salesman.
A permission giver gives a specific instruction to the “intended” socially linked group, the associated subcultures to behave similarly. While not understood by people outside the linked group, the instruction is regarded as a certain kind of information by the group. In Micronesia, the permission giver was the infamous teen who committed romantic suicide because of a complicated love relationship with two girls. The infamous teen had the power of personality, family background, and a very sticky incident to tip an epidemic.
In the case of teenage smoking in the US, the role of permission givers is acted by a special group of people, i.e. cool smokers. Although smoking is not cool, smokers are often cool, giving permission to the associated subcultures to smoke. In some cases, the followers often beg to follow the suit, just to look cool: extrovert, having many friends, attractive, rebellious, taking more risks, and so on.
What happens to the followers after their first smoking? A study shows that it depends on their individual initial response to nicotine. Some people can experience a buzz when first smoking, in which case smoking is sticky for them. Other people’s first experiments are without buzz experience, only resulting in non-smokers or chippers (light smokers), in which case smoking is not sticky but still contagious. If the buzz is very high, the first smoking experiments result in heavy smokers in which case smoking is contagious and then very sticky. The research concludes that contagiousness is a function of environment, while stickiness is a function of gene.
Now, provided that we know there area two different types of problems in the spread of smoking, we can analyze two strategies: the contagiousness strategy and the stickiness strategy. On the one hand, preventing salesmen from smoking in the first place is part of the contagiousness strategy. Advising teens and providing teens with an alternative roles models and lifestyles are both also the contagiousness strategy. On the other hand, making nicotine substitutes and lowering nicotine level in cigarettes are in the stickiness side. Which one is the best for overcoming the problem?
According to various researches, both gene and environment have significant roles in shaping an individual’s personality. Quite surprisingly though, home or parent-control environment has less impact to kids' individual personality than peer pressure does. This suggests that it is hard for parents to prevent teens to experiment smoking in their adolescence. It is useless to do so. Unlike the contagiousness strategy, the stickiness strategy seems to be more effective. According to nicotine experts, it needs about three years of experimentation for an average teenager to get hooked, meaning parents have enough time to let their kids to be exposed safely given that cigarettes are no longer too sticky.
The stickiness strategy, however, cannot be used for all cases. Not all cases have that long three years of grace period. Bad things can happen very quickly in many cases. Some even are irreversible. The suicide epidemic in Micronesia is an example. (Lesson learned: there is no such panacea to cure all problems and we need to be careful especially in some severe cases – Y Pan)
Friday, February 8, 2008
The Tipping Point 6
Chapter VI: Case Study – Rumors, Sneakers, and the Power of Translation
In the mid 1980’s, Airwalk started in San Diego making shoes for skateboarding, a.k.a. air walking. It had a niche market segment among cult skateboarders, worth 13 million revenue. In the early 1990’s, the owner changed course and wanted to broaden the products and the market, using active alternative life style concept. They hired a small ad agency, Lambesis. Its revenue surged from 1993’s 16 million to 1995’s 250 million revenue. In the mid 1990’s, Airwalk tipped.
Airwalk’s epidemic transmission cannot be separated from the role of Lambesis. A small ad agency, lambysis used an unusual kind of ads. The ads were always weird, funny, and inspiring. An example is that Airwalk shoes are used in head. Another is that an Airwalk shoe is used as a mirror by a girl to apply lipstick. The best one, often copied by other ads, is that an Airwalk shoe is used by a young boy to kill a spider, unsuccessfully in the ceiling up to a bed. In this last example, the camera movement is used to intrigue viewers with naughty perception.
The best way to explain how Airwalk tipped is by using the diffusion model, a model developed by Bruce Ryan and Neal Gross, 1930’s. They studied how a new superior corn seed was introduced in 1928, adopted by handful farmers in 1932-1933, and prevailing a few years later. The farmers were classified into innovators, early adopters, early majority, late majority, and laggards. Although the distance between early adopters and early majority seems to be little, there is actually a wide chasm between them. While early adopters tend to perceive risks in a positive way, early majority undoubtedly perceive risks as negative. To close the gap come the roles of connectors, mavens, and salesmen.
Connectors, mavens, and salesmen translate the language of innovators and early adopters into a common language that makes most emotional appeal to early majority. They tweak the innovation – the idea – a bit by changing the original idea into one more fit to the majority context. This kind of “distortion” is easily found in the spread of rumors that change along the way, becoming the “mainstream truth” however incorrect. The study of rumors shows that in the spread of rumors some translations typically happen. Usually some details are ignored or dropped, while other details are emphasized. The original story is distorted based on the gravity of the contextual social environment.
So, how did Airwalk specifically do? First, the company conducted a market research of what were the trends happening in the street. It then followed the suit and made ad campaigns in the context of pervasive trends. In other words, Airwalk piggybacked the already-happening trends. In order to do that, Airwalk’s market research focused on certain young cool kids, the trendsetters. Ms Gordon of Lambesis, an inspiring figure of Airwalk’s ad campaigns, was behind the epidemic. She took the role of a maven, a cool fashion maven. The ads as already mentioned above were then designed in such a way that they uniquely touched the market.
Finally, it should be mentioned also that to maintain an innovative epidemic, the innovation itself should be maintained so that the innovator and early adopter market always has something to diffuse to the mainstream market. Airwalk failed to do it. Consequently in 1999, Airwalk epidemic started to falter because it gave up all of its innovation to the mainstream without any new innovation being introduced.
Thursday, February 7, 2008
The Tipping Point 5
Chapter V: The Power of Context (Part Two) – The Magic Number One Hundred and Fifty
Rebecca Wells’ Divine Secret of Yaya Sisterhood is really sticky. Ex-actress, Rebecca is a classic salesman, making her Yaya Sisterhood reading performance is like theatrical performance. In addition to the role of Rebecca and the stickiness of the book, there’s another critical factor to make Yaya Sisterhood a best seller. It’s the power of context, i.e. how groups change individual behavior through group power, peer pressure, etc. A typical Yaya Sisterhood reading group initially consisted of mothers and daughters (two generations), but later consisted of grandmas, mothers, and daughters (three generations).
Another example of group success is John Wesley’s Methodist movement whose members surged dramatically from late 18th century to early 19th century. Not only preaching, Wesley stayed a little longer to have further talk to interested audiences. Afterward, those interested persons were grouped in practicing groups. The members of a group should attend weekly meeting when value and practice were enforced. Those not complied with the value were expelled.
Group power has already been an interesting topic for research. According to findings, individuals behave differently if they are in a group. Group gives peer pressure. Group gives social burden, as well as intellectual burden. The question is how large a group is supposed to be for its effectiveness. This size problem relates to human limitation, scientifically called channel capacity.
In his research, George Miller concluded that in average human short-term memory is limited to the magic number of seven. You can attest this by trying to differentiate the sweetness of a series of cups of tea. The limit is almost always seven, i.e. you can differentiate only up to seven cups of tea. If you like to sing, probably you can attest this magic number by trying to differentiate a series of different tones rather than cups of tea. This also was the reason why local telephone numbers usually consist of seven digits. This limitation is true not only for cognition but also for feeling. Please try to answer how many your close friends are. More than twelve? Wow, it is not usual.
Another researcher, Robin Dunbar suggested that human social channel capacity is the magic number of one hundred and fifty, in average. He derived this number from homosapien neocortex size and compared this computed number to the average size of villages and tribes in Australia, Papua New Guinea, etc. Hutterite settlements’ splitting point is also 150. When a colony exceeds 150, the colony should split into two.
This social channel capacity or limitation is also parallel with the size of battle functional units in army, which never exceeds two hundred. With this group size, the group can be governed with one-to-one command relationship and personal loyalty. Larger than 150, people will be stranger to each other. Consequently, to maintain cohesion in a group larger than 150, hierarchy, laws, rules, and enforced policies should be introduced.
An example of principle 150 implementation can be found in Gore & Associates. This company produces water resistance goretech, electronic, medical, pharmaceutical products. At Gore, there are no titles, only ASSOCIATE’s. No boss, no plan, no organization chart, no prestige’s office. Gore is a big company attempting to act like a small, entrepreneurial one. It is always high ranked in growth and profit. In each plant, there are only 150 associates. If the parking lot (150 in size) is not enough anymore, it is a sign to build a new plant. Peer pressure is more powerful than a boss: everyone knows everyone. Unity in a complex institution results in a GLOBAL MEMORY SYSTEM.
Daniel Wegner (University of Virginia) introduced that people remember things with help of relationships and groups. This kind of memory is called transactive memory. Individuals do not need to know everything, because there’s somebody who is expert in one area. The total expertise and memory within relationships and groups is much more larger than that of any individual (see also a more recent book The Wisdom of Crowds by James Surowiecki – Y Pan).
Basically, people store information outside their brain. Even people store information with other people. Daniel Wegner experimented with couples who know each other and couples who do not know each other to remember things. As you might have expected, the couples who know each other remember things better. With expertise specialization in group and with automatic assignment regarding storing new information, efficiency is more evidence. However, this global memory system only can work if people in a group know and trust other people to know what they know.
Finally, using the channel capacity concept, in order to tip a big movement, one needs to start with many smaller contagious movements first. However paradoxical, the statement intuitively is so true!
The Tipping Point 4
Chapter IV: The Power of Context (Part One) – Bernie Goetz and the Rise and Fall of New York City Crime
The crime rate in NYC 1984 was very high and still rising. At that cold winter night, in a dirty train Bernie Goets was approached by four black young men who later were proved criminals. The dirty train was full of excessive filth and graffiti, implying that there was no authority. Ready to face a fierce life, Bernie shot them all. Ironically, in the next days, he was treated by media as a hero and he also was free from a guilty verdict.
When NYC’s crime rate declined during the 1990’s, experts argued that it was because of the economy betterment and the aging population (even Levitt in Freakonomics argued that it was because of abortion beginning years before – Y Pan). However, while the the economy of NYC was stagnant and new immigrants made the argument of aging population not relevant, NYC’s crime rate still tipped down. Why? The reason lies on broken window theory.
A disciple of broken window theory, David Gunn was recruited as NYC subway director. He battled graffiti (1984 – 1990) and devised a cleaning up system. Dirty trains were never mixed with clean ones. He was so religious in his approach. Together with William Bretton (now LA Police Chief, and the only person ever holding both NYC and LA Police Chief – you can check it using Wikipedia, Y Pan), a disciple of broken window theory too, he battled fare beating. Bretton added the number of transit police in the platforms and in the trains to pursue fare beaters.
Challenged with an argument that he should pursue more serious crimes, Bretton insisted in this fare beating campaign. It revealed that the arrested beaters had more chance to be criminals, carrying guns, other weapons, and drugs. The following positive result made Bretton have more legitimacy to promote even more strict measure, although it required even more budget. Later, under NYC’s Mayor Giuliani administration, he conducted clean street campaign. The new rule was if you pee in the street, you are going to jail.
Simple measures, big effects!
The Tipping Point 3
Chapter III: The Stickiness Factor – Sesame Street, Blue’s Clues, and Educational Virus
Experts argued that educational TV was not possible since it’s one direction, low involvement teaching. Nonetheless, people behind Sesame Street tried to disprove the argument. They were obsessed to educational TV. They are obsessed in devising educational virus to increase preschool literacy to combat poverty. Later, Sesame Street was proved succeed in increasing children literacy by intensive researches. The quality of Sesame Street makes it memorable in children memory. It is STICKY!
To increase stickiness of a message, experts use various techniques. One is repeats, another is celebrity endorsement, and another is direct marketing. The treasure hunt – a little gold box – is a connection and trigger for inviting further response. Leventhal experiment (1960’s) gave high fear and low fear booklets to two groups of Yale students about the danger of tetanus. Although the high fear booklets increased the awareness, the lack of the treasure hunt made the students take still no action to get shots. A map and time schedule to go to the place where action should take was needed as the treasure hunt. Nowadays, the stickiness factor becomes even more significant because we are exposed to a plethora of messages and advertisement
What was behind Sesame Street? The most important key is how to hold children attention, while TV watching experience is passive. Children can be distracted from watching by various distractions, such as toys. However, based on a research, they have the ability to strategically watch the TV show. Children watch only if they understand, while they look away when they confuse. Ed Palmer’s innovation resulted in an effective way to test children attention. Side slideshow distracters were played beside every Sesame Street show before a group of children to decide whether it’s OK to launch. The indicator of attention was derived from eye movement tracking.
An improvement to Sesame Street was Blue’s Clues. Blue’s Clues took away complex messages that cannot be understood by children. On the one hand, Sesame Street is a magazine show consisting of short, non-narrative segments, based on an argument that 30-second ad can sell a box of cereal to a kid and hopefully can sell a lesson too. On the other hand, Blue’s Clues conveys stories or narrations, based on the fact that children likes to watch a story or narration and make up narratives based on their daily experience and imagination. Another correction made by Blue’s Clues was avoiding humors and jokes. Blue’s Clues is always literal and has the same plot.
Another significant breakthrough, Blue’s Clues plays repeatedly the very same show from Monday to Friday and plays only a new show next Monday (James Earl Jones effect). The reason behind is that a search of understanding and predictability leading to discovery is a significant factor of preschool learning. Moderate layers of complexity are necessary to trigger more understanding from one repeat to the next. Furthermore, the sequence of the clues matters. The format and presentation as well as the inherent stickiness of the message also matter.
The Tipping Point 2
Chapter II: The Law of the Few – Connectors, Mavens, and Salesmen
What Paul Revere did in 1774 when he ride a long miles in midnight spreading the words “British is coming” to people in small towns and villages of Massachusetts demonstrates the power of word-of-mouth. Because of such heroic action, he became one of legends in the American Revolution history. In only one single night, he started an epidemic so that people of those small towns and villages became more than ready to welcome the British.
Still the most important form of human communication, not all word-of-mouth ignites epidemic, only in a rare condition. Why? The answer lies on the man, not only the message. While Paul Revere’s message tipped, Dawes’ very same message did not resulting in people readiness in areas visited by Dawes that night. This implies that Paul Revere was different from William Dawes. Paul Revere was a great connector. One research in US, late 1960’s, revealed the behavior of social network. The central theme of the research was the role of Mr. Jacobs, Mr. Brown, Mr. Jones – the role of connectors.
The research revealed that in average every single person separates from each other by six other persons. This means in average Joe can reach an unknown person Fulan through person A, B, C, D, E, and F. However, average is not the most revealing indicator, since there are outliers like Paul Revere – a very small number of people, the connectors – who seem to know everyone and bring the world together.
Connectors are people who know everyone. They are people specialists. Generally, the older know more people. The upper incomes know more people. Another factor is profession. Furthermore, people with more roles and subcultures like actor Rod Steiger know more people than people with less roles and subcultures like actor Kevin Bacon, even though more popular. However, amazingly, a true connector is more born than deliberately developed. A connector has an unusual social behavior, collecting people like collecting stamps and maintaining the strength of weak ties.
Another kind of roles in social epidemic is mavens, experts. Unlike connectors who are people specialists, mavens are more than experts or information specialists. They are people who peruse the price and compare it to the actual price of everyday-low-price products AND act promptly if it is not as promised. They are people who obsessedly observe and collect information about a product or concept or subject. They are people not saying that it’s hot yesterday but saying that it’s 95 degree yesterday here and even 97 in the city center.
While connectors connect people, mavens connect people to the marketplace. While connectors spread the epidemic, mavens often start social epidemic. Just like connectors, they are rare and born rather than developed. Needless to say once again, they are not acting, by they have the gene, the personality.
Last but not least, there are salesmen. They are good in persuading their peers and others. An example is Thomas Gull who says he loves his clients and perceives his clients family and loves helping his clients wholeheartedly, obsessedly, let alone highly optimistic. A research (1986, Syracuse University) conducted an analysis of facial expressions of three newscasters during Ronald Reagan (Republican) and Walter Mondale (Democrat) campaign (1984). Peter Jennings (ABC News) had a significant bias in favor of Reagan. He always smiled when mentioning Reagan.
Another research revealed that simple actions like nodding and shaking toward an argument have a significant effect toward accepting or rejecting the argument. Nodding is so much like Jennings’s smile when mentioning Reagan. Moreover, another research (William Condon) conducted a study of cultural micro rhythm, i.e. synchronization between conversations and physical micro movement, concluding simple physical movements have significant impacts. In other words, persuasion is more than just words. Parallel with the researches, salesmen have reflex persuasive personality. They are charismatic persons, good in sending their emotions to others even without conversation.
The Tipping Point 1
The Tipping Point
By Malcolm Gladwell
Introduction
After a long surge until1980's, NYC’s crime rate dropped in an extremely short time. The phenomenon took place dramatically, not gradually. Later when we examine what the cause was, we'll find in this book that actually it was triggered by little changes imposed by local administration.
In addition to dramatic effects caused by little changes, contagiousness makes such phenomenon as NYC's crime rate drop an epidemic. Unlike epidemic caused by virus, the social epidemic entails the spread of new ideas, new trends, new habits, or the like. This kind of epidemic is called the tipping point by Malcolm Gladwell because it demonstrates a sudden change like the tip in your fingertip.
Although little changes can cause big effects or radical changes, not all changes succeed in causing such effects. Questions to answer then are (1) why some ideas, messages, behaviors, or products tip, while others do not, and (2) what we can do to start a tipping point or a good social epidemic.
Chapter I: The Three Rules of Epidemic
In mid 1990’s, Baltimore experienced an increase of syphilis infection. One theory says that it was because of the use of cracks, while another says it was because of the breakdown of health public service due to budget constraint, yet another says the devil was the city’s housing dislocation resulting in infected, transmitting people moved and were rampant.
There is a hidden and interesting fact, that is the cause agents only increased a bit but resulted in a big effect. The three agents of change: (1) the people infected and transmitting the infection (the law of the few), (2) the infectious agent itself (the stickiness factor), and (3) the environment where the infection is operating (the power of context).
The law of the few relates to the law of 80/20 in which 20% agents contributed 80% results. However, in epidemic, the proportion becomes more extreme: a tiny group causes most. For example, “Boss Man” McGee (St Louis, mid 1990’s) infected at least 30 with HIV and “Face” / “Sly” / “Shyteek” Williams (Buffalo, mid 1990’s) infected at least 16. Such people as Boss Man and Face have special characteristics, i.e. sociable, energetic, persuasive, enthusiastic, exceptional-select people.
The stickiness factor relates to the strength of the infectious agent itself in infecting a lot of people. For example, the mutation of flu virus in the beginning of 20th century made it a lot stronger killing tens of thousands of people (1918). HIV virus was also mutated from a weaker virus into a deadly one. In the world of messages, a sticky message or idea should have widespread impact in a longer term. It consists of catchy, contagious phrases.
The power of context relates to the environment where the epidemic takes place. For example, the black-star area in Baltimore where syphilis-infected people lived enlarged and shrank due to the circumstances. Another example is the big city life, like NYC where once people ignored crimes happening in front of their nose. In 1964, 38 people heard her scream, but acted non to help Kitty Genovese – a young Queens woman – from killing. Based on a research, when in a group, people perceive their responsibility lower (like fardhu kifayah) than when not in a group (like fardhu ain).
Information Evolution and Revolution
Information is an object whose age is very old. It is as old as the humanity itself. Only smelling a rose’s scent and admiring its red, one has interacted with information. The messages of its good scent and redness are captured from the rose by one’s nose and eyes. Afterward, the messages – the information – are sent to the brain. Without information, one cannot sense her environment, the world, and even herself.
The unfortunate early life of Helen Keller (1880-1968), blind and deaf, almost made her absolutely isolated from information and information processing, isolated from the world and herself. Barely was she trapped to be nobody or even nothing, if her great teacher, Anne Sullivan, herself almost blind too, came to rescue her life. She taught Helen to sense the world by using a primitive sensing faculty – her skin, her physical touch. Having developed her ability to process information, Helen devised and built her own virtual world inside her head and later became a very incredible writer!
Information is exchanged between two people through various media. In addition to human’s ability to communicate in oral spoken form, paper and its primitive forms really should get most credits for information and knowledge accumulation from a generation to the next. Unlike the spoken form, books especially after the development of printing machine can be duplicated easily. This makes information distribution velocity increases sharply, let alone the volume.
Furthermore, after the development of information technology and the internet, we can even realize how great human ability to learn, create new information, store it, and pass it through to the whole world is. Web 2.0, including this blog, is an example of enablers that makes personal publishing possible. Do we now process information in a significantly different way? Or should we change but do not? Or, information already behaves differently? Is information the one who finds us and not the other way around?
Please watch this video I got from YouTube, titled Information R/evolution:
My Studio, a New Home
My family and I still live in my father’s house. He has three, one of which is a place for us to shelter. We ever owned a house, but we never live there since it is too far from my office. A few years ago, we sold it to a fine good couple with two children. We do have a plan to build our own house at Bumi Serpong Damai where we have a parcel. Regardless our plan to build our dream house, insya Allah He gives us more fortune and financial resource, building a blog like this gives a sensation pretty much similar to building and living at a new home. Whether the sensation makes me coming back here to write something is a question I cannot I answer. I hope that I keep the consistency to write in this blog.
Organizational Dishonesty
Dishonesty can happen to anybody. An example of dishonest act is breaking a long queue to request a given service earlier, earlier than many people who come earlier. A person like that is dishonest and unfair not only to the people coming earlier but also to himself. A normal person simply knows the virtue of queuing. Nonetheless, we often see people committed dishonesty in a consistent way.
First a person starts to break a good rule. Then follow his friends and enemies, resulting in a bunch of dishonest people, from an RT, an RW, a county, a city, to the whole society. To be fair, it should be told that there are indeed good communities promoting good deeds, honesty, and fairness, from a unit, a division, to the whole institution. What is it the primary cause of prevalent dishonesty? Is there any cost related to committing dishonesty?
A few years ago I read an article related to an interesting topic, The Hidden Cost of Organizational Dishonesty, from MIT. If you have time searching the Internet, you will easily find the related sites. If lucky, you even can download related materials hopefully without cost you a cent (except those computer and connection off course). If you do not have time, here I summarize the consequences of organizational dishonesty.
According to the article I read, the consequences of organizational dishonesty are (1) bad reputation and low return, (2) employee value mismatch, and (3) inevitably increased supervision. Each consequence has its own cost that should be paid. The first one decreased long-term profit. The second, value mismatch, has a bit more complex consequence. Honest employees find it difficult to cope with the prevalent dishonesty. The options are very limited: reverting to the prevalent behavior or keeping honesty. On the one hand, keeping honesty is hard though and causes the employees’ stress, absentee, dissatisfaction, and getting out, meaning high turn over and cost. On the other hand, reverting is easy but it increases the number of dishonest employees. It makes corruption more prevalent, as well as politicking to gain personal wealth, against the interest of shareholders.
Sad? Yes, but the story has not end yet. To address dishonesty, the organization tries to strengthen supervision. Instead of positive, inevitable supervision cause (a) more stress and health problems, (b) low trust, (c) more attempts to manipulate loopholes, (d) employee’s false perception that they are really honest because of mere compliance, and (e) management’s false perception that supervision system is effective and should be even escalated. All of these consequences mean cost increase.
So, what is the condition of our organizations, our companies, and our government institutions? Moral lesson: prevent before it is too late. What if it is too late? Um… can we rely on the wisdom of crowds – crowds where dishonesty is difficult to cure?
Democracy
Political atmosphere is often so seductive that many good and bad people try to win elections. Current examples are the elections in Bekasi, Tangerang, Jawa Barat, Indonesia, and even in the US. The candidates’ campaigns are often begun long before the elections. Money talks. Perhaps, some people start to get bored with the hectic. Some others are increasing in spirits, because of their ideal dream to make a difference or the business they get from the campaigns. Whether the votes will be given based on the ideals or business opportunities is an interesting question for me.
Parallel with democracy, markets have similar characteristics. The buyers and the sellers collectively decide which product will prevail at an agreed price level, without deliberate pre-coordination and cooperation. Google, Wikipedia, Linux, and Open Source are among phenomenons that demonstrate the success of bottom-up mechanism. The success should be underlined since those examples probably have pretty much more complex transactions than financial market transactions. So… it is OK I think to acknowledge the benefits of market mechanism and democracy for humanity.
James Surowiecki in his book The Wisdom of Crowds writes that a group is consistently smarter than the smartest person in the group. It is the case especially if the group is large in size and has decentralized, independent members. Surowiecki’s thesis is really in favor of democracy and free market ideology. If we relate it to Kota Bekasi’s mayor election, we can say that the people of Bekasi that consists of nationalists, religious, educated, uneducated, lost, and so on will be wiser in selecting the mayor than any highly educated person is. This means also that a PhD’s vote is no more valuable than (sorry) a thief’s vote.
In my opinion, democracy needs to be tested in a long period of time. The virtue of the wisdom of crowds can be easily perceived in a market. In financial markets, though, the wisdom of crowds often result in bubble and burst fallacy. It is unfortunate if someone chose only the wisdom of crowds as a decision-making mechanism. Although not extreme, Surowiecki tends to value the wisdom of crowds a bit excessively while saying most CEO’s give little value if not any to the companies employing them.
Finally, continuing the argument that market mechanism or democracy is not the one and only alternative, I would like to bring a simple example. Let us say that we face a difficult math problem. I think it is not wise to consult the wisdom of crowds since the crowds for sure have math savvy and math dumb and dumber. To ask the answer to the crowds will only lead us astray. OK, probably you would argue that real life problems are far from similar to math problems, but in real life too, we often need an institution, a person at the top, to take final decisions and execute them.
Since CEO’s, mayors, governors, managers, presidents, or any people-chosen leaders are the persons at the top who have most power to make a difference, they will be asked about their leadership and they have to be responsible. They cannot run away from accountability forever. If deliberately manipulating people, they will be punished. If not now, later off course.
My Name
My Name is Yulistian Pancawijaya and my nickname is Aan or Y Pan. I admit that my name is too long, but it was given by great loving parents to their fifth, beloved child. Because of the sure long name, my family and friends call me Aan, a very short one. However, for English-speaking friends, both Aan and Yulistian Pancawijaya are difficult to pronounce and remember.
When I had a chance to pursue an MBA in University of Illinois at Urbana-Champaign, 1998-2000, I often introduced myself as Y… yes the letter “Y” pronounced WHY. Introduction with this name seemed easier for me among the English-speaking community. What about my last name? Pan sounded best so that if I had to introduce myself, I would say, “My name is Y Pan, Pan as in Peter Pan.” ;-)
Indeed, my idea to use Y Pan as my name was not rendered all at once. It began when after graduating from one of Indonesia’s top universities, with some friends, I learned to work formally and landed in Riau, close to Siak River. The company for which we worked as programmer-analysts is a US-affiliated oil company. Therefore, it was not a surprise that we got emails only after two-three days working. It was great since at that time email in Indonesia is a luxury. They gave me ypancaw@ptblablabla.com as my email address. User ID ypancaw off course was taken from the first letter of my first name and combined with my last name. Perhaps since it was still too long, Mr. Admin had no option but to cut ypancawijaya to ypancaw.
During 1994-1995, I got a lot of good experience, but the one that I want to talk about here is that one of friends often called me YP, Y… P… pronounced in English. There was I identifying a new identity. In short, after a quite long evolution, once I fell comfortable with a short, cool name Y Pan and decided to use it as one of my nicknames. Nonetheless, the name given by a pair of loving parents is still perfect and awesome. I'm always grateful to have such great parents!
