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    How Google Sold Its Engineers on Management

    by David A. Garvin
    Artwork: Chad Hagen, Graphic Composition No. 1,2009, digital
    Since the early days of Google, people throughout the company have questioned the value of managers. That skepticism stems from a highly technocratic culture. As one software engineer, Eric Flatt, puts it, “We are a company built by engineers for engineers.” And most engineers, not just those at Google, want to spend their time designing and debugging, not communicating with bosses or supervising other workers’ progress. In their hearts they’ve long believed that management is more destructive than beneficial, a distraction from “real work” and tangible, goal-directed tasks.
    A few years into the company’s life, founders Larry Page and Sergey Brin actually wondered whether Google needed any managers at all. In 2002 they experimented with a completely flat organization, eliminating engineering managers in an effort to break down barriers to rapid idea development and to replicate the collegial environment they’d enjoyed in graduate school. That experiment lasted only a few months: They relented when too many people went directly to Page with questions about expense reports, interpersonal conflicts, and other nitty-gritty issues. And as the company grew, the founders soon realized that managers contributed in many other, important ways—for instance, by communicating strategy, helping employees prioritize projects, facilitating collaboration, supporting career development, and ensuring that processes and systems aligned with company goals.
    Google now has some layers but not as many as you might expect in an organization with more than 37,000 employees: just 5,000 managers, 1,000 directors, and 100 vice presidents. It’s not uncommon to find engineering managers with 30 direct reports. Flatt says that’s by design, to prevent micromanaging. “There is only so much you can meddle when you have 30 people on your team, so you have to focus on creating the best environment for engineers to make things happen,” he notes. Google gives its rank and file room to make decisions and innovate. Along with that freedom comes a greater respect for technical expertise, skillful problem solving, and good ideas than for titles and formal authority. Given the overall indifference to pecking order, anyone making a case for change at the company needs to provide compelling logic and rich supporting data. Seldom do employees accept top-down directives without question.
    Google downplays hierarchy and emphasizes the power of the individual in its recruitment efforts, as well, to achieve the right cultural fit. Using a rigorous, data-driven hiring process, the company goes to great lengths to attract young, ambitious self-starters and original thinkers. It screens candidates’ résumés for markers that indicate potential to excel there—especially general cognitive ability. People who make that first cut are then carefully assessed for initiative, flexibility, collaborative spirit, evidence of being well-rounded, and other factors that make a candidate “Googley.”
    So here’s the challenge Google faced: If your highly skilled, handpicked hires don’t value management, how can you run the place effectively? How do you turn doubters into believers, persuading them to spend time managing others? As it turns out, by applying the same analytical rigor and tools that you used to hire them in the first place—and that they set such store by in their own work. You use data to test your assumptions about management’s merits and then make your case.
    Analyzing the Soft Stuff

    To understand how Google set out to prove managers’ worth, let’s go back to 2006, when Page and Brin brought in Laszlo Bock to head up the human resources function—appropriately called people operations, or people ops. From the start, people ops managed performance reviews, which included annual 360-degree assessments. It also helped conduct and interpret the Googlegeist employee survey on career development goals, perks, benefits, and company culture. A year later, with that foundation in place, Bock hired Prasad Setty from Capital One to lead a people analytics group. He challenged Setty to approach HR with the same empirical discipline Google applied to its business operations.
    Setty took him at his word, recruiting several PhDs with serious research chops. This new team was committed to leading organizational change. “I didn’t want our group to be simply a reporting house,” Setty recalls. “Organizations can get bogged down in all that data. Instead, I wanted us to be hypothesis-driven and help solve company problems and questions with data.”
    People analytics then pulled together a small team to tackle issues relating to employee well-being and productivity. In early 2009 it presented its initial set of research questions to Setty. One question stood out, because it had come up again and again since the company’s founding: Do managers matter?
    To find the answer, Google launched Project Oxygen, a multiyear research initiative. It has since grown into a comprehensive program that measures key management behaviors and cultivates them through communication and training. By November 2012, employees had widely adopted the program—and the company had shown statistically significant improvements in multiple areas of managerial effectiveness and performance.
    Google is one of several companies that are applying analytics in new ways. Until recently, organizations used data-driven decision making mainly in product development, marketing, and pricing. But these days, Google, Procter & Gamble, Harrah’s, and others take that same approach in addressing human resources needs. (See “Competing on Talent Analytics,” 
    by Thomas H. Davenport, Jeanne Harris, and Jeremy Shapiro, HBR October 2010.)
    Unfortunately, scholars haven’t done enough to help these organizations understand and improve day-to-day management practice. Compared with leadership, managing remains understudied and undertaught—largely because it’s so difficult to describe, precisely and concretely, what managers actually do. We often say that they get things done through other people, yet we don’t usually spell out how in any detail. Project Oxygen, in contrast, was designed to offer granular, hands-on guidance. It didn’t just identify desirable management traits in the abstract; it pinpointed specific, measurable behaviors that brought those traits to life.
    That’s why Google employees let go of their skepticism and got with the program. Project Oxygen mirrored their decision-making criteria, respected their need for rigorous analysis, and made it a priority to measure impact. Data-driven cultures, Google discovered, respond well to data-driven change.
    Making the Case
    Project Oxygen colead Neal Patel recalls, “We knew the team had to be careful. Google has high standards of proof, even for what, at other places, might be considered obvious truths. Simple correlations weren’t going to be enough. So we actually ended up trying to prove the opposite case—that managers don’t matter. Luckily, we failed.”
    To begin, Patel and his team reviewed exit-interview data to see if employees cited management issues as a reason for leaving Google. Though they found some connections between turnover rates and low satisfaction with managers, those didn’t apply to the company more broadly, given the low turnover rates overall. Nor did the findings prove that managers caused attrition.
    As a next step, Patel examined Googlegeist ratings and semiannual reviews, comparing managers on both satisfaction and performance. For both dimensions, he looked at the highest and lowest scorers (the top and bottom quartiles).
    “At first,” he says, “the numbers were not encouraging. Even the low-scoring managers were doing pretty well. How could we find evidence that better management mattered when all managers seemed so similar?” The solution came from applying sophisticated multivariate statistical techniques, which showed that even “the smallest incremental increases in manager quality were quite powerful.”
    For example, in 2008, the high-scoring managers saw less turnover on their teams than the others did—and retention was related more strongly to manager quality than to seniority, performance, tenure, or promotions. The data also showed a tight connection between managers’ quality and workers’ happiness: Employees with high-scoring bosses consistently reported greater satisfaction in multiple areas, including innovation, work-life balance, and career development.
    In light of this research, the Project Oxygen team concluded that managers indeed mattered. But to act on that finding, Google first had to figure out what its best managers did. So the researchers followed up with double-blind qualitative interviews, asking the high- and low-scoring managers questions such as “How often do you have career development discussions with your direct reports?” and “What do you do to develop a vision for your team?” Managers from Google’s three major functions (engineering, global business, and general and administrative) participated; they came from all levels and geographies. The team also studied thousands of qualitative comments from Googlegeist surveys, performance reviews, and submissions for the company’s Great Manager Award. (Each year, Google selects about 20 managers for this distinction, on the basis of employees’ nominations.) It took several months to code and process all this information.
    After much review, Oxygen identified eight behaviors shared by high-scoring managers. (See the sidebar “What Google’s Best Managers Do” for the complete list.) Even though the behaviors weren’t terribly surprising, Patel’s colead, Michelle Donovan, says, “we hoped that the list would resonate because it was based on Google data. The attributes were about us, by us, and for us.”
    The key behaviors primarily describe leaders of small and medium-sized groups and teams and are especially relevant to first- and second-level managers. They involve developing and motivating direct reports, as well as communicating strategy and eliminating roadblocks—all vital activities that people tend to overlook in the press of their day-to-day responsibilities.

    Putting the Findings into Practice
    The list of behaviors has served three important functions at Google: giving employees a shared vocabulary for discussing management, offering them straightforward guidelines for improving it, and encapsulating the full range of management responsibilities. Though the list is simple and straightforward, it’s enriched by examples and descriptions of best practices—in survey participants’ own words. These details make the overarching principles, such as “empowers the team and does not micromanage,” more concrete and show managers different ways of enacting them. (See the exhibit “How Google Defines One Key Behavior.”)
    The descriptions of the eight behaviors also allow considerable tailoring. They’re inclusive guidelines, not rigid formulas. That said, it was clear early on that managers would need help adopting the new standards, so people ops built assessments and a training program around the Oxygen findings.
    To improve the odds of acceptance, the group customized the survey instrument, creating an upward feedback survey (UFS) for employees in administrative and global business functions and a tech managers survey (TMS) for the engineers. Both assessments asked employees to evaluate their managers (using a five-point scale) on a core set of activities—such as giving actionable feedback regularly and communicating team goals clearly—all of which related directly to the key management behaviors.
    The first surveys went out in June 2010—deliberately out of sync with performance reviews, which took place in April and September. (Google had initially considered linking the scores with performance reviews but decided that would increase resistance to the Oxygen program because employees would view it as a top-down imposition of standards.) People ops emphasized confidentiality and issued frequent reminders that the surveys were strictly for self-improvement. “Project Oxygen was always meant to be a developmental tool, not a performance metric,” says Mary Kate Stimmler, an analyst in the department. “We realized that anonymous surveys are not always fair, and there is often a context behind low scores.”
    Though the surveys weren’t mandatory, the vast majority of employees completed them. Soon afterward, managers received reports with numerical scores and individual comments—feedback they were urged to share with their teams. (See the exhibit “One Manager’s Feedback” for a representative sample.) The reports explicitly tied individuals’ scores to the eight behaviors, included links to more information about best practices, and suggested actions each manager could take to improve. Someone with, say, unfavorable scores in coaching might get a recommendation to take a class on how to deliver personalized, balanced feedback.
    People ops designed the training to be hands-on and immediately useful. In “vision” classes, for example, participants practiced writing vision statements for their departments or teams and bringing the ideas to life with compelling stories. In 2011, Google added Start Right, a two-hour workshop for new managers, and Manager Flagship courses on popular topics such as managing change, which were offered in three two-day modules over six months. “We have a team of instructors,” says people-development manager Kathrin O’Sullivan, “and we are piloting online Google Hangout classes so managers from around the world can participate.”
    Managers have expressed few concerns about signing up for the courses and going public with the changes they need to make. Eric Clayberg, for one, has found his training invaluable. A seasoned software-engineering manager and serial entrepreneur, Clayberg had led teams for 18 years before Google bought his latest start-up. But he feels he learned more about management in six months of Oxygen surveys and people ops courses than in the previous two decades. “For instance,” he says, “I was worried about the flat organizational structure at Google; I knew it would be hard to help people on my team get promoted. I learned in the classes about how to provide career development beyond promotions. I now spend a third to half my time looking for ways to help my team members grow.” And to his surprise, his reports have welcomed his advice. “Engineers hate being micromanaged on the technical side,” he observes, “but they love being closely managed on the career side.”
    To complement the training, the development team sets up panel discussions featuring high-scoring managers from each function. That way, employees get advice from colleagues they respect, not just from HR. People ops also sends new managers automated e-mail reminders with tips on how to succeed at Google, links to relevant Oxygen findings, and information about courses they haven’t taken.
    And Google rewards the behaviors it’s working so hard to promote. The company has revamped its selection criteria for the Great Manager Award to reflect the eight Oxygen behaviors. Employees refer to the behaviors and cite specific examples when submitting nominations. Clayberg has received the award, and he believes it was largely because of the skills he acquired through his Oxygen training. The prize includes a weeklong trip to a destination such as Hawaii, where winners get to spend time with senior executives. Recipients go places in the company, too. “In the last round of promotions to vice president,” Laszlo Bock says, “10% of the directors promoted were winners of the Great Manager Award.”
    Measuring Results
    The people ops team has analyzed Oxygen’s impact by examining aggregate survey data and qualitative input from individuals. From 2010 through 2012, UFS and TMS median favorability scores rose from 83% to 88%. The lowest-scoring managers improved the most, particularly in the areas of coaching and career development. The improvements were consistent across functions, survey categories, management levels, spans of control, and geographic regions.
    In an environment of top achievers, people take low scores seriously. Consider vice president Sebastien Marotte, who came to Google in 2011 from a senior sales role at Oracle. During his first six months at Google, Marotte focused on meeting his sales numbers (and did so successfully) while managing a global team of 150 people. Then he received his first UFS scores, which came as a shock. “I asked myself, ‘Am I right for this company? Should I go back to Oracle?’ There seemed to be a disconnect,” he says, “because my manager had rated me favorably in my first performance review, yet my UFS scores were terrible.” Then, with help from a people ops colleague, Marotte took a step back and thought about what changes he could make. He recalls, “We went through all the comments and came up with a plan. I fixed how I communicated with my team and provided more visibility on our long-term strategy. Within two survey cycles, I raised my favorability ratings from 46% to 86%. It’s been tough but very rewarding. I came here as a senior sales guy, but now I feel like a general manager.”
    Overall, other managers took the feedback as constructively as Marotte did—and were especially grateful for its specificity. Here’s what Stephanie Davis, director of large-company sales and another winner of the Great Manager Award, says she learned from her first feedback report: “I was surprised that one person on my team didn’t think I had regularly scheduled one-on-one meetings. I saw this person every day, but the survey helped me realize that just seeing this person was different from having regularly scheduled individual meetings. My team also wanted me to spend more time sharing my vision. Personally, I have always been inspired by Eric [Schmidt], Larry, and Sergey; I thought my team was also getting a sense of the company’s vision from them. But this survey gave my team the opportunity to explain that they wanted me to interpret the higher-level vision for them. So I started listening to the company’s earnings call with a different ear. I didn’t just come back to my team with what was said; I also shared what it meant for them.”
    Chris Loux, head of global enterprise renewals, remembers feeling frustrated with his low UFS scores. “I had received a performance review indicating that I was exceeding expectations,” he says, “yet one of my direct reports said on the UFS that he would not recommend me as a manager. That struck me, because people don’t quit companies—they quit managers.” At the same time, Loux struggled with the question of just how much to push the lower performers on his team. “It’s hard to give negative feedback to a type-A person who has never received bad feedback in his or her life,” he explains. “If someone gets 95% favorable on the UFS, I wonder if that manager is avoiding problems by not having tough conversations with reports on how they can get better.”
    Loux isn’t the only Google executive to speculate about the connection between employees’ performance reviews and their managers’ feedback scores. That question came up multiple times during Oxygen’s rollout. To address it, the people analytics group fell back on a time-tested technique—going back to the data and conducting a formal analysis to determine whether a manager who gave someone a negative performance review would then receive a low feedback rating from that employee. After looking at two quarters’ worth of survey data from 2011, the group found that changes in employee performance ratings (both upward and downward) accounted for less than 1% of variability in corresponding manager ratings across all functions at Google.
    “Managing to the test” doesn’t appear to be a big risk, either. Because the eight behaviors are rooted in action, it’s difficult for managers to fake them in pursuit of higher ratings. In the surveys, employees don’t assess their managers’ motivations, values, or beliefs; rather, they evaluate the extent to which their managers demonstrate each behavior. Either the manager has acted in the ways recommended—consistently and credibly—or she has not. There is very little room for grandstanding or dissembling.
    “We are not trying to change the nature of people who work at Google,” says Bock. “That would be presumptuous and dangerous. Instead, we are saying, ‘Here are a few things that will lead you to be perceived as a better manager.’ Our managers may not completely believe in the suggestions, but after they act on them and get better UFS and TMS scores, they may eventually internalize the behavior.”
    Project Oxygen does have its limits. A commitment to managerial excellence can be hard to maintain over the long haul. One threat to sustainability is “evaluation overload.” The UFS and the TMS depend on employees’ goodwill. Googlers voluntarily respond on a semiannual basis, but they’re asked to complete many other surveys as well. What if they decide that they’re tired of filling out surveys? Will response rates bottom out? Sustainability also depends on the continued effectiveness of managers who excel at the eight behaviors, as well as those behaviors’ relevance to senior executive positions. A disproportionate number of recently promoted vice presidents had won the Great Manager Award, a reflection of how well they’d followed Oxygen’s guidelines. But what if other behaviors—those associated with leadership skills—matter more in senior positions?
    Further, while survey scores gauge employees’ satisfaction and perceptions of the work environment, it’s unclear exactly what impact those intangibles have on such bottom-line measures as sales, productivity, and profitability. (Even for Google’s high-powered statisticians, those causal relationships are difficult to establish.) And if the eight behaviors do actually benefit organizational performance, they still might not give Google a lasting edge. Companies with similar competitive profiles—high-tech firms, for example, that are equally data-driven—can mimic Google’s approach, since the eight behaviors aren’t proprietary.
    Still, Project Oxygen has accomplished what it set out to do: It not only convinced its skeptical audience of Googlers that managers mattered but also identified, described, and institutionalized their most essential behaviors. Oxygen applied the concept of data-driven continuous improvement directly—and successfully—to the soft skills of management. Widespread adoption has had a significant impact on how employees perceive life at Google—particularly on how they rate the degree of collaboration, the transparency of performance evaluations, and their groups’ commitment to innovation and risk taking.

    At a company like Google, where the staff consists almost entirely of “A” players, managers have a complex, demanding role to play. They must go beyond overseeing the day-to-day work and support their employees’ personal needs, development, and career planning. That means providing smart, steady feedback to guide people to greater levels of achievement—but intervening judiciously and with a light touch, since high-performing knowledge workers place a premium on autonomy. 

    It’s a delicate balancing act to keep employees happy and motivated through enthusiastic cheerleading while helping them grow through stretch assignments and carefully modulated feedback. When the process works well, it can yield extraordinary results.
    That’s why Prasad Setty wants to keep building on Oxygen’s findings about effective management practice. “We will have to start thinking about what else drives people to go from good to great,” he says. His team has begun analyzing managers’ assessment scores by personality type, looking for patterns. “With Project Oxygen, we didn’t have these endogenous variables available to us,” he adds. 

    “Now we can start to tease them out, using more of an ethnographic approach. It’s really about observations—staying with people and studying their interactions. We’re not going to have the capacity to follow tons of people, but what we’ll lose in terms of numbers, we’ll gain in a deeper understanding of what managers and their teams experience.”
    That, in a nutshell, is the principle at the heart of Google’s approach: deploying disciplined data collection and rigorous analysis—the tools of science—to uncover deeper insights into the art and craft of management.

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    Finally, A Company That's Really, Truly Both Innovative And Disruptive 

    With Aereo, Chet Kanojia is changing the way people watch TV, sparking lawsuits, and building a legion of believers.Finally, A Company That's Really, Truly Both Innovative And Disruptive 

    You think your startup is innovative and disruptive? Meet Chaitanya "Chet" Kanojia, founder of Aereo. His product is so innovative that it promises to transform the way we watch television. And it's so disruptive that he's been sued four times by the broadcasting industry and may be forced to defend his business  in front of the U.S. Supreme Court.
    Startups seldom get more controversial than this--which is one of the reasons Inc. has recognized Kanojia as one of 2013's entrepreneurs of the year. 
    Kanojia, in fact, is a serial entrepreneur whose first business, Navic Networks, was acquired by Microsoft in 2008, reportedly for more than $200 million. The idea for his current company, Aereo, is fairly simple: Why not stream network TV straight to viewers, online? The problem: The broadcasting industry is convinced that this is illegal. 
    Right now, households can view network TV for free if it is picked up by an antenna or digital box. Aereo maintains warehouses full of powerful micro-antennas that receive network broadcasts and then streams programming to viewers' online devices for a price of $8 a month.
    The broadcast industry sees this as a clear example of copyright infringement. But Kanojia claims that Aereo is perfectly legal according to the Communications Act of 1934, in which Congress created the FCC and granted the nascent television industry access to the airwaves in exchange for providing the nation with public services, such as offering news and information free of charge. 
    Kanojia says that Aereo is simply offering consumers access to material broadcast over publicly owned airwaves. The only difference is that Aereo is delivering that material via 21st Century devices.

    It's easy to see why the major networks and affiliates are not amused. They stand to lose as much as $3 billion in rebroadcasting fees. Major League Baseball and the National Football League, which make loads of money via deals with television networks, also object. Aereo has been sued four times in three states. And a coalition of major networks is petitioning the Supreme Court to take up the case. 
    "We are optimistic that ultimately Aereo will be declared a copyright infringer," says Dennis Wharton, executive vice president of the National Association of Broadcasters. "It's illegal to take someone else's content and re-sell it."

    So far, the courts have been on Aereo's   side. The company, which is based in New York and Boston and has about 100 employees, has yet to lose a legal challenge. "The law is on our side, and so are the facts," Kanojia says.

    This is Chaitanya's second company. His first, the advertising-and-metrics company Navic Networks, was acquired by Microsoft in 2008 for a sum reportedly greater than $200 million. Considering Aereo's legal challenges, each of which requires a team of about a dozen lawyers, Aereo's growth is impressive. 
    One key reason: Kanojia will go to extreme lengths to make his customers happy. He makes certain tricky customer-service calls himself, and favors transparency in letting them know about service snags. Customers who feel cared for and openly communicated with become vocal about their love for a service or company, he says. They also are happy to provide suggestions for improvement. 
    "When you create a connection between people, between employees and customers, a kind of feedback loop gets created. People go above and beyond to do their best," Kanojia says. "That makes my job incredibly easy."

    The timing could be on Aereo's side. A decade into the "cord-cutting" debate over Americans cutting off cable subscriptions in favor of streaming online content, the time finally seems ripe for TV 2.0. Consider: While Netflix is exhibiting huge growth in online streaming, network television just had its worst 12-month stretch ever  .

    And Aereo's battle with the networks certainly hasn't frightened off investors. A number of high-profile firms--including FirstMark, First Round, High Line, and Highland--have poured $63 million into the company. Another major backer is IAC's Barry Diller, who founded Fox along with Rupert Murdoch three decades ago. (This year Fox has threatened   to consider moving to cable to avoid Aereo "stealing our signal.") 
    Kanojia says he has the greatest amount of respect for the legal process. Still, he gets a glimmer in his eye when he talks about taking on big, entrenched interests. That's because when he looks to the future, he sees a massive global opportunity.
     "How consumers are going to access television in its next iteration is totally up for grabs," Kanojia says. "We think that is the opportunity; that we can be the destination where people come to access all television on a global scale. Where we are at right now? It's just the first half of the first inning."

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    Bringing Sustainability Metrics to Purchasing Decisions

    Reproduced from MIT Sloan Management Review

    William Kornegay (Hilton Worldwide) and Eric Olson (BSR), interviewed by David Kiron

    The new Center for Sustainable Procurement, formed by the hotel company Hilton Worldwide and the global sustainability specialists BSR, is trying to build new tools for procurement professionals. The goal: help them bring sustainability data into their everyday purchasing decisions.

    It’s one thing for companies to figure out the best ways to embrace sustainability within their own operations.
    It’s another thing to figure out the best ways to get other companies — specifically, suppliers — to embrace sustainability, too.
    One new lever in that challenge is an initiative called the Center for Sustainable Procurement   (CSP). It was formed by Hilton Worldwide (Hilton), the global hotel company, and BSR, the global consultancy on sustainability, in what they term a “partnership in sustainable recruitment.”
    CSP’s website notes that “although more sustainability data has become available in recent years, companies don’t always know how to apply this information to the products they purchase.” CSP is designed to help procurement professionals get the “methods and guidance that will help them integrate product sustainability data into everyday purchasing decisions.”
    William Kornegay  , senior vice president, Hilton Supply Management, Hilton Worldwide, and Eric Olson  , senior vice president, advisory services, BSR, are in the heart of the project.
    They realized two things: First, that there wasn’t a way for procurement professionals at Hilton who were trying to weigh sustainability factors to easily differentiate between products they were buying for the hotels — products from computers to towels to soap. And second, that if there wasn’t an easy way for Hilton employees to do it, there probably wasn’t an easy way for a whole lot of other people to do it.
    “Through Eric and the guys at BSR,” says Hilton’s Kornegay, “we talked about creating a standard tool set that will work, hopefully, globally.” Says BSR’s Olson: “What we realized is that there was a real white space and a real need to supplement all the existing work on sustainability with efforts that focus on the procurement manager.”
    In a conversation with David Kiron, MIT Sloan Management Review’s executive editor of the Big Ideas Initiative, Kornegay and Olson talk about how the two organizations got together, the challenges of driving sustainability down to the level of a purchasing decision and why AT&T is an early model.
    Let’s start with suppliers. I have a picture in my head of suppliers as passive movers in the sustainability movement. Is this about companies like Hilton giving them instructions? Or is there an opportunity for suppliers to be proactive?
    Olson: You raise an interesting question. First let’s think about what a supplier is. That depends very much on who the company is. So, for Hilton, Dell is a supplier, it sells them computers. In Dell’s case, it’s going to be innovating and bringing something interesting to Hilton without having been asked by Hilton.
    Similarly, Walmart’s suppliers are some of the largest, most innovative branded product manufacturers in the world — Unilever, Proctor & Gamble and what have you — and many of them have their own proactive sustainability programs.
    But as you go further and further up the chain, to the suppliers of the suppliers, if you will, in most industries you do get to a point where now you’re facing a basic manufacturing operation. Now we’re talking a middle-market metal-stamping enterprise in China, which will have a different capacity and level of sophistication for this kind of work. When you get that far up, then yes, generally conversations and parameters about sustainability features are flowing from the brand or the customer upstream as a requirement to them.
    Kornegay: And, David, from my perspective, that’s why this sustainability metric becomes important. We can determine what the cost of an item is, or, to some degree, the quality of an item, but how do we measure sustainability?
     The further away you are from the beginning, the more you need a metric that helps you articulate and differentiate between products’ sustainability.
    Bill, you must have run into issues at Hilton with suppliers when it comes to wanting them to be more sustainable than they’re already being in the products you’re getting from them.
    Kornegay: Well, the first thing I’d say is that this only works when sustainable products are not more expensive than nonsustainable products. As an entity, cost is one of the primary measures that we measure. If you have the most sustainable product on the market but it costs 50% more than a nonsustainable product, it’s really about what our end user is willing to pay for that experience. And most of the end users that we have, in our opinion, at this point in time, would not be willing to pay a 50% premium for the ability to say it was sustainable.
    Most of our suppliers are trying very hard to meet our expectations and they develop a range of good, better, best kind of options, laying out, “here’s our most sustainable product, but here’s what it costs” and that kind of thing.
    Are suppliers presenting that in terms of the transactional costs or as a total cost of ownership?
    Kornegay: The way we work, we have category owners, and then there are managers and buyers in the category. The primary tools that we’ve given them are total quality and total delivered cost. So, where is it manufactured? What’s the distribution? How much do you pay to get it, land it, where we need it, in the quantity that we need it, at the time that we need it?
    We haven’t given the front-line purchasing agent, the buyer, a tool to help them understand sustainability. And so no, most of our vendors are not providing us with that because we haven’t asked the best questions. It’s still something in development for us.
    Olson: This all ties back to why we saw a need for a Center. This is exactly the take-off point that we were at when we were designing the Center.
    We’re working on the buyers and the suppliers at the same time. The whole point is that we went out in our early supply-chain work and used all the great third-party metrics, saw that there’s certified this and more sustainable that, but the way that it works today, a) it’s confusing and b) the business case in a lot of these cases are unclear. So we thought, we have got to develop some tools that are going to enable the buyers to ask the right questions of suppliers.
    Suppliers will say things at a high level, like, “if you do business with us, your brand will be more protected, you’ll be doing the right thing — it’s consistent with your overall corporate values and high level sustainability commitments.” 
    All of which is worth something for sure, but when you drive it down to the level of a purchasingdecision given current incentives and constraints, there’s been really no guidance in how to translate that into something that people can hold up alongside their measures and say, “that’s worth 20% on my scorecard.”
    How did your two organizations go from working together for something internal for Hilton to working together for this Center?
    Olson: One of the things that’s interesting about Hilton is that it’s similar to what people say about the impact that Walmart has on its supply chain, in that Hilton, as a buyer, buys everything. So it’s a great example, it’s a great place to consider the challenge of implementing these practices in an extremely complex organization.
     Complex in terms of the number of products, complex in terms of the global scope, complex in terms of actually taking this growing intelligence about sustainability about better products and putting it into operation with literally thousands of people who’ve got to make decisions on a daily basis.
    BSR was engaged with Hilton for a couple of years tackling that problem specifically at Hilton and trying to make it tangible. That meant we had to know what “better” or “more sustainable” looks like, how you actually define that in a product. Then you have to know how to ask for it, which in turn means you’ve got to be able to get information about it that’s useful and credible. 
    Then you’ve got to be able to integrate that information into the decision, which by necessity still includes considerations of cost, quality, delivery — all the things that procurement folks are rightly expected to deliver for their companies.
    And then, obviously, you need to be able to track and verify that you’re having the impact, both economic and in sustainability terms, that you set out to have. If you look at this world today there is a lot of really exciting activity that’s been spearheaded by big retailers, such as Walmart, Marks & Spencer and Unilever, as well as hundreds, if not thousands, of eco-label certification programs — that whole field that has emerged to help us define what is more sustainable, from a computer to corn.
    What we realized is that there was a real white space and a real need to supplement all the existing work on sustainability with efforts that focus on the procurement manager. How do we help them figure out how to integrate it into what they’re doing so that they really can buy better computers, buy better furnishings for their store, buy better food for their food service areas?
    The impetus was to help make sure that all this great investment that’s going into the world of defining better life cycle analysis can actually get traction and have the positive impact we’re all hoping for.
    Kornegay: I’ll add a couple things. Let me be clear: we weren’t doing this for altruistic measures to better the planet. I think that’s a wonderful thing, but as business people, we wanted to be able to provide the people making these decisions with tools that allow us to be sustainable, but in an environment where I always have to measure least-landed cost.
    The transition really occurred as we recognized that we were not in the world alone doing this in an isolated environment. We didn’t want to be reinventing the wheel, and we wanted to see what other people were doing. And not just in the hospitality arena, but we wanted to be able to look across industries. We thought, in conjunction with Eric and his team at BSR, that the establishment of the Center would allow for that to happen in an environment that was focused on the tools of how you do it and not on the esoteric of why it’s the right thing to do.
    Allowing this process to happen in a space where like-minded organizations could wrestle with an opportunity that we all have, we thought we could extrapolate all that knowledge into a toolset that we can all use.
    Olson: The way that I summarize that, David, is it’s about opening the front end of the funnel so that we can accelerate the learning. We spent the better of two years starting the cycle through just a small number of literally hundreds of categories that a company like Hilton needs to address. It quickly became clear that if you don’t have a lot of organizations working in parallel, there’s no way they’re going to cover this territory in any kind of reasonable period of time.
    Our inaugural report with the Center’s first year findings   is now out. It looks at the year-long pilot projects we did with AT&T, Best Buy and Dell.
    Bill, can you tell us a little about where Hilton is in its sustainability journey? What’s the LightStay platform?
    Kornegay: LightStay is our sustainability management system, and it really is a tracking system. We assess more than 200 different measures across the portfolio. We built in a way to look at all of these stock-keeping units that we’re purchasing, how the properties are using them, what their footprint is in energy, waste, water, material, carbon and packaging.
    And so, the tool itself works as a measurement, but it’s not going to help a procurement professional make a good decision from one product to the other. It doesn’t provide us with that specific data.
    Olson: I would add, David, that we’re so close to this, we’ve had a lot of time to sift through and think about it. What Bill just described is generation one and maybe even two of LightStay. It’s property-level operations management, for managing energy use, waste, water, et cetera, for a hotel. They built it, it’s their tool and it’s deployed on what I consider a breathtaking scope and scale already. I’ve never seen anything like it.
    Hilton then got to the point of saying, “okay, now we want to take that same idea and apply it to the things we buy.” And it was then that our partnership came into being. We do a lot of supply chain and product sustainability work with a lot of companies, including a lot of the companies that supply to Hilton.
    We figured all of us would benefit if we could get a lot more organizations involved.
    That’s fantastic, a very clear picture. But it does beg the question of whether the LightStay platform is that something that is being shared.
    Kornegay: Right now it’s proprietary tool for the Hilton Worldwide portfolio of over 4000 properties and we’re not necessarily sharing it with others.
    Do you see it as something that is a potential source of revenues in terms of sharing licensing?
    Kornegay: I’m thinking it hasn’t even evolved quite that far, David.
    Part of where that question is coming from is that there are these transition points that sometimes happen in the development of sustainability programs where organizations see sustainability as a way to do cost savings and even an opportunity to generate revenues and possibly profit.
    Kornegay: I think it’s fair to say that for Hilton this was predominantly done for the cost savings. I would also say that Hilton Worldwide prides itself on being the leader in our industry, and we thought that this would be a proprietary tool as part of our offering to our franchisees in those management companies that do business with Hilton Worldwide. It would be another distinguisher of the Hilton promise to make us the best product and the best hotel brand to do business with.
    Finally, tell us a little about the research   that the Center has been doing. You’re about year in, right? What kind of findings have you had so far?
    Olson: Like I mentioned, the three companies we’ve been most active with so far and the cases are outlined in the paper are AT&T, Best Buy and Dell. We deliberately chose different kinds of procurement challenges because that is fundamental to the message that there is no one size fits all approach to sustainable procurement.
    I’ll tell you a little bit about AT&T’s case. AT&T has a massive, massive real estate footprint and massive related spend on energy, particularly electricity — it’s well north of a billion dollars a year.
    We wanted to take a look at one of their equipment buys where we could run the case for an equipment change. In this case, it was related to their HVAC systems, where the cost of the change, switching cost and to some extent component cost, might involve a price increase or at least a one-time expense for switching that would be offset by very substantial savings over time in the form of reduced electricity expense. So, this is not a pure purchasing initiative.
    And, indeed, in this case it required getting the right internal stakeholder group together that included the facilities manager, people in purchasing, people in the sustainability team, people responsible for a forward energy strategy at the company — AT&T had to get all of them together in order to identify the requirements for making this kind of a switch and being able to calculate the relevance to the business case.
    So we started with a purchasing problem, and we ended up with a change effort that touched no fewer than five different departments.
    What did we learn? We learned that, number one, you’ve got to have the right players in the room to scope the problem and to make it happen in order to get to these bigger, broader business cases.
    Number two, I think what this illustrates is the value and the importance of starting with what’s easily measurable and then building from there. What we needed was an approach that would put some value into the system relatively quickly, and then we will build on bigger questions beyond the energy usage, like what are the other attributes of this equipment, its operation, ultimately disposal of the equipment. A total life-cycle approach that would be much broader.
    I think that had we started with that, there’s no way we would have gotten traction with AT&T’s energy and facilities teams. It’s just too complicated. The lesson there? A step-wise approach was fundamental.
    Reproduced from MIT Sloan Management Review

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    The Sweet Spot of Sustainability Strategy

    A three-question framework can help identify the most strategic sustainability issues for your company.

    When it comes to sustainability, today’s fringe issues often become tomorrow’s mainstream and generic market expectations. And between these two extremes — the “fringe” and the “generic” — lies a third territory, which I call “strategic.” It is in this strategic territory that proactive companies have the best opportunity to influence the sustainability standards for their industry. I define the three sustainability territories as follows:
    1. The “fringe,” populated by newly discovered sustainability issues.
    However, these new issues have not yet materialized as business concerns; nor have normative voices yet proposed specific, credible business responses. Organizations should monitor these issues, but need not take action on them — not yet, at least.
    2. The “strategic,” where various norm-setting groups — including businesses — are working to establish new market standards.
    “Strategic” in this context means that a window of opportunity exists for proactive companies to assert a leadership position and help shape the market’s sustainability solutions. The window arises because standard resolutions to the issues are still developing. Therefore, any company that takes decisive action will be a leader — with the potential to define future sustainability standards for their marketplace and competition.
    Image courtesy of Flickr user lowjumpingfrog
    By taking the lead in enacting “dolphin-safe”
    policies for its tuna, StarKist was able to influence standards in its industry.

    For example, the issue of dolphin deaths from tuna harvesting became a strategic issue for companies like StarKist and Bumble Bee in the 1980s. Faced with concern from activists about the issue, StarKist in April 1990 chose to enact its own unilateral “dolphin-safe” policies.
     The move was quickly copied by its major competitors, Bumble Bee and Van Camp Seafood and consolidated “dolphin-safe” tuna as a marketplace norm, which in turn drove supply-chain changes. By taking the lead on this issue, StarKist was able to influence standards in its industry.
    3. The “generic,” where standard solutions have already emerged for discovered issues.
    Standard solutions usually take one of two forms. They can be specific technological solutions, such as water-saving toilets or energy-efficient LED lighting, or best practice solutions, such as Fair Trade certifications.
    For executives, the first step is to determine if sustainability issues emerging from the fringe should be mapped onto the strategic or generic territory. This article proposes a three-question framework for doing so. Once executives know whether an issue falls in the strategic or generic territory, they can apply the tactics most appropriate for that particular terrain.
    The following technique developed from semi-structured interviews with organizations confronting emerging sustainability issues. It was then generalized to broaden its relevance and vetted with senior management participants in executive education programs.

    Distinguishing the Strategic from the Generic

    There exist a number of potential approaches for prioritizing sustainability issues. Traditional risk analysis, for example, can be extended to social and environmental concerns. Likewise, stakeholder materiality techniques can be used to prioritize competing social demands. However, these methods are often involved and data-intensive. As an alternative, I offer a “quick and dirty” technique to assess whether a particular sustainability issue is strategic or generic. I call it “Sustainability Triage,” and it involves three sequential questions:
    1. Can this issue be resolved without our company’s involvement?
    This first question forces executives to consider whether their organization brings something unique or vital to resolving the issue. In some instances, companies are intimately implicated in either the cause or potential resolution of a sustainability issue. Take the example of the pharmaceutical industry when it was confronted with the HIV/AIDS crisis in Africa. While pharmaceutical companies obviously did not create the crisis, over time they were forced to recognize that the problem could not be addressed without their participation. That was because they held a monopoly on the treatment. Patents on antiretroviral compounds meant the drugs could not be provided without the owning company’s consent. Given this reality, pharmaceutical companies were inevitably drawn into efforts to confront the crisis. Moreover, the industry’s initial refusal to recognize the issue as strategic meant the terms of the debate were largely dictated by activist groups.
    A “no” answer to this question will indicate that your company has vital responsibilities and risks. It may also indicate an opportunity to make a distinctive contribution to a potential solution that others can’t — thus creating a differentiated strategic response.
    2. Can this issue be resolved materially faster with our company’s involvement?
    Any company can cut a check and contribute to an issue, but the connection to corporate responsibility and strategy is often tenuous. Such activities should be considered discretionary and not strategic. However, there are times when a corporate contribution to a sustainability problem — while not resolving the issue — can substantially advance a solution. The key to this question is materiality. Does the company have competencies, geographic networks, influence, know-how or other assets that allow it to materially advance the resolution of a sustainability issue in ways that others cannot?
    To help clarify the difference, take the example of the National Football League’s collaboration with the American Cancer Society. The NFL Pink Campaign sought to promote annual breast cancer screenings for women older than 40. While a worthwhile effort, it is hard to argue that the NFL materially advanced a resolution of the problem. “Women over 40” is not a demographic that the NFL has any special access to or influence with. Given this, some criticized the Pink Campaign as a ploy to attract a new audience to games.
    Contrast this with the NFL Play60 campaign, an effort to fight childhood obesity by getting kids outside and active for an hour each day. This campaign plays far more to the NFL’s distinct mission and assets. NFL Play60’s target of children is a demographic whose members are already inclined to listen to their athletic heroes and emulate their fitness habits. And the NFL has obvious expertise in physical fitness. This gives the NFL a strategic opportunity, and arguably, a social responsibility, to have a differentiated impact on a societal problem. It also ties into the league’s business by fostering a generation of young fans and potential future players.
    A “yes” to this question can prompt sustainability executives to explore in greater detail whether a strategic response is warranted.
    3. Can the resolution of this issue substantially impact our business?
    There are sustainability issues that — even if your organization can’t bring anything differentiating to the problem or solution — still merit strategic consideration. These are issues that could have important implications for your business, depending on how the problem is resolved. For example, food manufacturers, restaurant chains and soft drink producers cannot ignore the issue of childhood obesity. That’s because proposed short- or long-term solutions may impact their industry. Likewise, while a specific energy company may not have distinctive assets to help mitigate climate disruption, climate solutions will have an impact on the sector’s offerings — and, ultimately, its profitability.
    There are sustainability issues that — even if your organization can’t bring anything differentiating to the problem or solution — still merit strategic consideration.
    Subjecting emerging and existing issues to these three questions can help you segregate sustainability responsibilities into the generic or strategic domains. If you answered “no” to the first question or “yes” to the second or third question, the issue in all likelihood is — or will become — a strategic one for your organization. But even if the issue is generic, rather than strategic, you need to pay attention to it.

    Addressing Generic Sustainability Issues

    When executives determine that a sustainability issue is generic, it doesn’t mean that it’s not important. It just means that the company has little chance of gaining strategic advantage from investing in its own solution. The generic domain is filled with sustainability problems that are common to many industries. Energy efficiency and reducing a company’s carbon footprint, for example, are nearly universal concerns.
    For most generic issues, there already exist organizations and groups working on and implementing well-defined solutions. Some of these are companies, often business-to-business suppliers, developing new technologies in service of larger industry value chains. 
    Others are multi-stakeholder partnerships of business, nongovernmental organizations and/or government agencies working to establish standards, such as green building, sustainable forestry and ISO certifications. When operating in the generic domain, the managerial questions are twofold: 1) “Which solutions should we support?” and 2) “When should we implement them?”

    Strategic Domain Tactics

    Some companies can do well by managing from within the generic sustainability frontier alone. However, if your sustainability triage reveals your company has differentiated sustainability risks and/or opportunities, you’ll need to strongly consider a more proactive approach on sustainability issues strategic to your company.
    Take, for example, how PepsiCo confronted its packaging problem in its snack chips businesses. Fritos’ and Lay’s bags that are discarded in parks and on roadsides are “branded litter,” which publicly links PepsiCo to growing concerns around waste. In the early 2000s there was no generic solution to the disposable packaging problem — so a window for strategic action existed. PepsiCo managers recognized that their R&D group had the capability to bring an innovative packaging solution to market. Furthermore, because the company’s business could be impacted by some proposed solutions to the litter problem, there was a strategic impetus for PepsiCo to take action.
    So PepsiCo’s R&D team began exploring new packaging innovations. By 2006, the company had made progress on a compostable bag that would offer a biodegradable solution. Consumers could dispose of the bag in a compost pile, and within two weeks, it would decompose. PepsiCo decided to launch the compostable bag for its SunChips product, a brand through which the company was already innovating around sustainability.
    While the bag performed as well as existing packaging, there was one exception: It was noisier than traditional bags. According to PepsiCo senior vice president Rocco Papalia, at the time of the launch, that seemed like a small price to pay for a real solution to a sustainability issue.
    Unfortunately, customers didn’t agree. When the new SunChips packaging hit U.S. markets, a backlash ensued, resulting in a dip in market share for SunChips and bad publicity. The company pulled the noisy bags from store shelves.
    Because they had publicly committed to producing SunChips in a 100% compostable bag, PepsiCo recognized that going back to the old packaging was not an option. Despite some internal tensions, PepsiCo R&D teams persisted and ultimately produced a “quieter” bag design that was still biodegradable. The new package hit the shelves in 2011 — to a far better response.
    As the PepsiCo case illustrates, stepping into the strategic window on the frontier can be risky. The PepsiCo case, however, provides a good example of how those risks can be managed. First, PepsiCo chose to launch the compostable bag under its SunChips brand, not mainstream brands like Fritos or Lay’s. Second, leadership quickly leveraged the lessons learned from the United States launch when it rolled out the SunChips compostable bag in the Canadian market. The Canadian ad campaign acknowledged the noise but emphasized the sustainability gains of the biodegradable solution. They asked customers to give the bags a try and then humorously offered to send a free set of ear plugs if the noise bothered them. By addressing the issue upfront, the company avoided the backlash that followed the U.S. launch and garnered positive publicity.
    Finally, by persisting through the initial setbacks and resolving the problem, PepsiCo gained goodwill and enhanced its reputation with sustainability advocates. By being the first among its competitors to introduce a compostable snack bag, PepsiCo staked out a first-mover advantage on an issue strategically important to the company.
    Reproduced from MIT Sloan Management Review

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    The rediscovery of India

    Is diversity an excuse for disunity?

     CNN’s Fareed Zakaria says Indians must embrace their common ambitions if the nation is to fulfill its tremendous potential.

    Is India even a country?

    It’s not an outlandish question. “India is merely a geographical expression,” Winston Churchill said in exasperation. “It is no more a single country than the Equator.” The founder of Singapore, Lee Kuan Yew, recently echoed that sentiment, arguing that “India is not a real country. Instead it is thirty-two separate nations that happen to be arrayed along the British rail line.”
    India gives diversity new meaning. The country contains at least 15 major languages, hundreds of dialects, several major religions, and thousands of tribes, castes, and subcastes. A Tamil-speaking Brahmin from the south shares little with a Sikh from Punjab; each has his own language, religion, ethnicity, tradition, and mode of life. Look at a picture of independent India’s first cabinet and you will see a collection of people, each dressed in regional or religious garb, each with a distinct title that applies only to members of his or her community (Pandit, Sardar, Maulana, Babu, Rajkumari).
    Or look at Indian politics today. After every parliamentary election over the last two decades, commentators have searched in vain for a national trend or theme. In fact, local issues and personalities dominate from state to state. The majority of India’s states are now governed by regional parties—defined on linguistic or caste lines—that are strong in one state but have little draw in any other. The two national parties, the Indian National Congress and the BJP, are now largely confined in their appeal to about ten states each.
    And yet, there are those who passionately believe that there is an essential “oneness” about India. Perhaps the most passionate and articulate of them was Jawaharlal Nehru, India’s first prime minister. During one of his many stints in jail, fighting for Indian independence, he wrote The Discovery of India, a personal interpretation of Indian history but one with a political agenda. In the book, Nehru details a basic continuity in India’s history, starting with the Indus Valley civilization of 4500 BCE, running through Ashoka’s kingdom in the third century BCE, through the Mughal era, and all the way to modern India. He describes an India that was always diverse and enriched by its varied influences, from Buddhism to Islam to Christianity.
    Nehru well understood India’s immense diversity—and its disunity. He had to deal with it every day in trying to create a national political movement. The country’s chief divide, between Hindus and Muslims, was to create havoc with his and Mahatma Gandhi’s dreams for a united India. But he was making the intellectual case for India as a nation as the essential background for its national independence. And he had a good case to make. India has existed as a coherent geographical and political entity, comprising large parts of what is modern India, for thousands of years. Despite its dizzying diversity, the country has its own distinct culture. Perhaps that’s why, for all its troubles, India has endured.
    Where Nehru and Churchill were both wrong was in their political conception of the nation-state itself. India could not follow the example of the European single-ethnic, single-religion nations that sprouted up in the 19th century. The British unified India using technology—the railroad—and arms. That nationalizing trend produced, in turn, a unified national opposition to British rule in the Indian National Congress, bringing together all India’s communities against foreign rule. But all this was a historical aberration. India had existed as a loose confederation for much of its history. Even when there had been a ruler in the national capital, he had exercised power by co-opting vassals, allowing regions autonomy, letting local traditions flourish. It was a laissez-faire nation in every sense. Despite the rise and fall of dynasties, the entry and exit of empires, village life in India was remarkably continuous—and unaffected by national politics. “India has historically been a strong society with a weak state,” says Gurcharan Das, the CEO turned author and philosopher.
    Modern India went down a different path. Nehru and many of his contemporaries were deeply influenced by 19th-century European nationalism and 20th-century European socialism. They could not conceive of modern India without a powerful national government. The centralizing impulses were more forceful in the economic than in the political sphere, where local leaders were often strong and autonomous. Even so, by the late 1960s, the Congress started losing ground to regional parties, first in the south on linguistic grounds and then later to caste-based parties in the north. The harder the Congress tried to fight this tendency, the greater the local backlash. This opposition to New Delhi reached its zenith under Nehru’s daughter, Indira Gandhi, who as prime minister attempted an extreme form of centralized rule in the 1970s, dismissing dozens of local governments, hoping to crush or co-opt regional parties. The result was half a dozen violent secessionist movements in the north, south, east, and west, one of which claimed her life in 1984.
    Over the last 20 years, India has been moving toward a different model of nationhood. The power of regions and regional parties is now undisputed. Starting in the early 1990s, New Delhi has been overturning the license-permit-quota raj and opening up the economy. The result is an India that is quite different from the one its founders might have imagined—a motley collection of communities, languages, and ethnicities living together in an open political and economic space. Some older nationalists find this new India too marketized, decentralized, noisy, vulgar, and messy, but it reflects India’s realities and, for that reason, it has tremendous resilience.
    Now, without central plan or direction, there are forces pushing India toward a greater sense of nationalism than before. Economic liberalization has created a national economy, and technology is creating a national culture. While there has been a proliferation of regional television channels for news and entertainment, there is also a growing set of national programs and media events. From cricket to Bollywood, a common popular culture pervades every Indian’s life. As India grows, its people will discover that there is much that distinguishes them from other Asian countries—and that binds them together.
    Economic growth has created one more common element in the country—an urban middle class whose interests transcend region, caste, and religion.
    This is already having political consequences. Between 2011 and 2013, millions of Indians took to the streets to protest, first against corruption and then against the brutal gang rape and murder of a 23-year-old woman in Delhi. The people marching came from cities and towns. In the past, mass agitations in India often originated in the countryside, with farmers petitioning for government largesse or some groups—defined by caste or religion—asking for special rights. The recent protests have a different quality: They ask the government to fulfill its basic duties. They seek an end to the corruption that is rife throughout the Indian political and bureaucratic system. They ask not for special government programs for women but rather simply that the police and courts function efficiently so that rape victims actually get the justice they deserve.
    Most of India’s wealth is generated from its cities and towns. Urban India accounts for almost 70 percent of the country’s GDP. But almost 70 percent of its people still live in rural India. “As a consequence,” writes Ashutosh Varshney of Brown University, “for politicians, the city has primarily become a site of extraction, and the countryside is predominantly a site of legitimacy and power. The countryside is where the vote is; the city is where the money is.”
    The United States is a middle-class society. Most of the country considers itself middle class, and politicians cater to that vast group in every speech and policy proposal. In India, politicians have generally pandered to the villager. No party has a serious urban agenda, but all have elaborate rural schemes. Popular culture used to reinforce this divide. Village life in traditional Bollywood movies reflected simplicity and virtue. Cities were centers of crime and conflict, controlled by a small, wealthy, often debauched elite.
    This focus on the rural poor has, ironically, been one of the major obstacles to alleviating poverty. For decades the national political parties handed out lavish subsidies for work, food, and energy—among other things—thus distorting all these markets and perpetuating many of India’s basic economic problems. Even after India’s economic reforms started, these patronage schemes continued, and this mentality has often taken precedence over good governance, efficient regulations, and fiscal sanity. Policies that actually alleviate poverty by promoting economic growth are often enacted quietly and are even guiltily called “stealth reform” by their advocates. In a broader sense, too much of the political elite still thinks of India as a poor, third-world country, a victim of larger global forces rather than one of the world’s emerging great powers that could and should be governed by the highest standards.
    The middle class itself has played into this narrative, traditionally thinking it was politically irrelevant and so adopting an apolitical stance. Its response to India’s problems was to expect little of government. Rather than demanding better government schools, they sent their kids to expensive private academies. Rather than trusting the police, they hired security guards for their homes and neighborhoods. Rather than running for office themselves, they didn’t bother to vote and pined for the authoritarian efficiency of Singapore or, now, China.
    But 20 years of strong economic growth have transformed the country. The Indian middle class now numbers more than 250 million; over 30 percent of the population of 1.2 billion lives in urban areas. And these numbers are growing fast. Indian movies are now often focused on this group, seen as young, aspiring, and filled with idealism and ambition.
    Globalization has raised the expectations that this new urban middle class has for itself and its government. The opening of the Indian economy has exposed them to a new world—a world in which other countries like India are growing fast, building modern infrastructure, and establishing efficient government. Whereas they used to assume that to get rich one needed political connections, today they can dare simply to have good ideas and work hard. India is still a parochial country—for good reason, given its size and internal complexity—but this middle class sees no reason why its democracy shouldn’t work for them too.
    Technology is giving them the power to make their voices heard, even when outnumbered by other interest groups. India is unusual in combining the growth of an emerging market with the openness of a freewheeling democracy. (China has the former but not the latter.) The result has been an information explosion. The country boasts more than 170 television news channels, in dozens of languages. Three-quarters of the population has mobile phones. Texting and similar methods have now become a routine way to petition government, organize protests, and raise awareness. The Aadhaar program (aadhaar means “foundation” in Hindi), spearheaded by India’s tech pioneer Nandan Nilekani, which will give every Indian a unique biometric identity, could have a much larger impact than imagined. Its stated goal is to make it possible for Indians to get the rights and benefits they deserve, without middlemen, corruption, or inefficiency blocking their path. But it could also make it possible for Indians to think of themselves for the first time as individuals, not merely members of a religion, caste, or tribe.
    Many foreign observers, particularly Western businesspeople, look at India today and despair. The country simply cannot reform at the pace necessary to fulfill its ambitions for growth and progress. Everything gets mired in political paralysis, and the governing class remains committed to a politics of patronage and pandering. This is all true and deeply unfortunate. But it is a snapshot of today’s reality, not a moving picture of an evolving society. In states as disparate as Gujarat, Odisha, and Bihar, state governments are aggressively promoting economic growth. And this is not simply a story about Narendra Modi, the controversial chief minister of Gujarat. That state of 60 million people has grown faster than China over the last two decades—with three different chief ministers. India itself, for all its problems, has been one of the fastest-growing large economies in the world over that period.
    Can the country live up to its potential? If so, it will happen only because of a bottom-up process of protest and politics that forces change in New Delhi. India will never be a China, a country where the population is homogeneous and where a ruling elite directs the nation’s economic and political development. In China, the great question is whether the new president, Xi Jinping, is a reformer—he will need to order change, top-down, for that country.
    In India, the questions are different: Are Indians reformers? Can millions of people mobilize and petition and clamor for change? Can they persist in a way that makes reform inevitable? That is the only way change will come in a big, open, raucous democracy like India. And when that change comes, it is likely to be more integrated into the fabric of the country and thus more durable.
    I remain optimistic. We are watching the birth of a new sense of nationhood in India, drawn from the aspiring middle classes in its cities and towns, who are linked together by commerce and technology. They have common aspirations and ambitions, a common Indian dream—rising standards of living, good government, and a celebration of India’s diversity. That might not be as romantic a basis for nationalism as in days of old, but it is a powerful and durable base for a modern country that seeks to make its mark on the world.

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    How Zawahiri Lost al Qaeda

    Global Jihad Turns on Itself

    An Islamist rebel poses in Aleppo, Syria, October 2013.
    An Islamist rebel poses in Aleppo, Syria, October 2013. 

    Like any sprawling organization, al Qaeda has seen its fair share of bureaucratic infighting. But the squabbling has reached fever pitch since Ayman al-Zawahiri began his tenure as head of the organization two years ago. Two of al Qaeda’s four main affiliates, al Shabaab and al Qaeda in the Islamic Maghreb (AQIM), are bitterly, and sometimes violently, feuding for supremacy in North and West Africa. Another affiliate, al Qaeda in Iraq (AQI), has openly defied Zawahiri’s will in Syria. If Zawahiri wants to assign blame for the lack of order, he should look no further than himself: the squabbling is largely a result of his decision to expand al Qaeda too broadly.

    Paradoxically, one major reason that al Qaeda affiliates are not getting along is the great many opportunities before them. The turmoil in the Arab world has created security vacuums that Zawahiri has sought to exploit by calling on his local affiliates to set up shop. As they move in, they often disagree about who should be in charge.

    Syria is a case in point. On April 9, Abu Bakr al-Baghdadi, the emir of the Islamic State of Iraq, a front group for AQI, declared that his group was changing its name to the Islamic State of Iraq and al Sham (ISIS), indicating his desire to play a greater role in the Syrian civil war. (“Al Sham” refers to Syria and its surrounding area.) 

    The emir also claimed that AQI had already been fighting in Syria in the form of the Nusra Front, which he said was subordinate to him. Yet Abu Muhammad al-Jawlani, the Nusra Front’s leader, refused to acknowledge Baghdadi as his leader; instead he pledged a direct oath of allegiance to Zawahiri. In response to the spat, Zawahiri sent a private message ruling that both men had erred: Baghdadi by not consulting Jawlani, and Jawlani by refusing to join ISIS and giving his direct allegiance to Zawahiri without permission from al Qaeda central. Zawahiri also decreed that ISIS should revert to its old name -- and to its more limited focus. The Nusra Front would remain al Qaeda’s main affiliate in Syria, an “independent branch” subordinate to the “general leadership.”

    Had the scuffle ended there, Zawahiri would have been slightly embarrassed by the public perception that he was not kept in the loop, but at least he would have successfully staved off a conflict. Baghdadi, however, had other plans. In a public message to Zawahiri after receiving the memo, he rejected Zawahiri’s message on religious and methodological grounds, saying that he had “chosen the command of my Lord over the command in the letter that contradicts it.” In the 25-year history of al Qaeda, no affiliate had ever publicly disagreed with the boss so brazenly.

    Zawahiri’s poor management is not necessarily a boon to the United States and its allies.

    The dispute between the Nusra Front and ISIS is not just about bureaucratic power; it is also about strategy and the future of al Qaeda’s global jihad. The Nusra Front, which wants to maintain its popular support among the Syrian people, has tried to make nice with the other opposition groups in the country. By contrast, ISIS has attacked fellow rebels -- including the Nusra Front -- and implemented draconian Islamic law in the towns that it has captured, both of which have alienated Syrians.

    In this regard, the squabble resembles a similar debate that took place within al Qaeda during the Iraq war. In 2005, when Zawahiri was al Qaeda’s number two, he chastised AQI leader Abu Musab al-Zarqawi for alienating Iraq’s Sunni masses through AQI’s brutal campaign of beheadings and bombings. Instead, he argued, al Qaeda should temper its violent excesses and work with the other Sunni insurgent groups to expel the Americans. 

    The Nusra Front is taking an approach similar to the one recommended by Zawahiri in its fight against the Syrian regime. By contrast, ISIS is largely following the disastrous Zarqawi strategy. Previously in these pages, I speculated that AQI would turn away Sunnis in Syria if it failed to learn from its mistakes in Iraq; I never anticipated that the organization would split because one half, the Nusra Front, learned from those mistakes and the other, ISIS, did not.


    A similar struggle has unfolded in al Qaeda’s North African franchise, AQIM, albeit in private. As in Syria, many of the conflicts there have to do with who should call the shots in the new fronts for jihad.

    In 2011, Zawahiri publicly called on Muslims to travel to Libya to join the rebel coalition fighting the Qaddafi regime. But the leaders of various AQIM brigades did not see eye-to-eye about how to answer the boss’s call. The leader of one brigade, Mokhtar Belmokhtar, decided to send fighters under his control into Libya in direct defiance of AQIM’s emir, who had given that duty to someone else.

     In an October 2012 memo  , AQIM’s leaders chastised Belmokhtar for attempting to strike out on his own, claiming that they alone were responsible for the decision to bring jihad to Libya. The note read, “The leadership of the organization was the first to push for taking advantage of the events in Libya. It didn’t just push and urge, it went further and made decisions and instructions for the forming of teams and bands that were sent into the heart of Libyan territory.”

    Like a business executive who feels that he would do better answering directly to the CEO rather than endure the small minds of his middle management, Belmokhtar pledged allegiance directly to Zawahiri. This was too much for AQIM. “Do you consider it loyalty,” its leadership scoffed, “to revolt against [the] emirs and threaten to tear apart the organization with no acceptable legal justification?” Belmokhtar shrugged and went his own way.


    Zawahiri could be excused for failing to anticipate the organizational disputes that would arise from his call for jihad in the Arab countries undergoing violent transitions. But he should have known better than to publicly acknowledge al Qaeda’s merger with the badly run al Shabaab organization in Somalia. When the merger was announced in early 2012, it looked good on paper, because al Shabaab controlled most of Somalia. It also stood out among al Qaeda affiliates for attracting Western fighters who could be sent on missions into Europe.

    But Zawahiri should have heeded the warnings of his predecessor, bin Laden. In 2010, bin Laden made clear that he thought it would be a mistake to publicly announce a merger with al Shabaab because its leaders were bad at governing and because they harshly implemented   Islamic law in the territory they controlled, which did them no favors with the local Somali population. 

    Bin Laden did not want to own the mistakes of his subordinates. Zawahiri urged   his boss to reconsider -- to no avail -- and tried to blunt the advice that bin Laden received from other lieutenants who wanted to limit the size of al Qaeda, lest it get out of control. Zawahiri ultimately got his way: nine months after bin Laden’s death, al Qaeda publicly accepted a pledge of loyalty from Ahmed Abdi Godane, al Shabaab’s leader.

    Soon after, however, al Shabaab lost its grip on most of Somalia. According to an exposé written by an American jihadi who had been fighting under al Shabaab’s banner, Godane used the merger with al Qaeda to silence his critics within his group’s ranks. As a result, al Qaeda affiliation, rather than unify the various jihadist elements in Somalia, ended up dividing them. The infighting has become so heated that a former close confidant of Godane’s wrote a letter   to Zawahiri calling on him to do something before the Shabaab leader entirely ruined the organization. Either Zawahiri has not listened or he is unable to do anything about it. 


    As the political scientist Jacob Shapiro observes in his new book, The Terrorist’s Dilemma, all terrorist groups suffer from infighting for one basic reason. If they want to achieve their goals and to avoid being captured or killed, leaders of secretive violent organizations have to give their commanders in the field some measure of autonomy. When the field commanders become too independent, the leadership attempts to rein them in through various bureaucratic measures.

    Without a doubt, Zawahiri is trying to rein in his unruly affiliates. What is striking is that Zawahiri created much of the problem himself by trying to expand al Qaeda too broadly. The one affiliate that Zawahiri did not push into a new arena of jihad, the Yemen-based al Qaeda in the Arabian Peninsula, has, unsurprisingly, avoided infighting. 

    Zawahiri has now allegedly appointed AQAP’s leader, Nasser al-Wuhayshi, as al Qaeda’s ”general manager” and thus his eventual successor. Zawahiri had little choice but to promote from the ranks of AQAP, given the current disarray across the rest of al Qaeda.

    Zawahiri could still pare back his organization. He could amicably part company with al Shabaab in Somalia and sever ties with AQI. The open defiance of the latter would certainly merit such a response. But al Qaeda’s leadership has historically preferred to admonish wayward affiliates rather than cut them loose. 

    During the Iraq war, Zarqawi severely damaged al Qaeda’s global reputation by mismanaging his organization. Yet al Qaeda’s leadership preferred to privately scold him rather than cut him loose. Better to have an affiliate behaving badly, al Qaeda central figured, than to have no affiliate at all. As the case of al Shabaab shows, bin Laden at least learned to publicly deny al Qaeda’s ties to unruly affiliates when he could, despite Zawahiri’s objections.

    Zawahiri’s knack for creating factions and his unwillingness to part with them when they misbehave could help al Qaeda’s opponents blame the entire organization for the atrocities committed in its name. Over time, perhaps the bloody collage will dampen enthusiasm for joining al Qaeda and even horrify its members. But in the near term, Zawahiri’s poor management is not necessarily a boon to the United States and its allies. 

    The various factions of a once-unified al Qaeda could compete with one another over which group can mount the biggest attack on the West. Whatever the case may be, Zawahiri’s inability to manage al Qaeda’s sprawling organization offers a preview of the infighting to come after his inevitable death.

    View at the original source

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    Rank Name/Title Organization Age

    Vladimir Putin


    Russia 61

    Barack Obama


    United States 52

    Xi Jinping

    General Secretary, Communist Party

    China 60

    Pope Francis


    Roman Catholic Church 76

    Angela Merkel


    Germany 59

    Bill Gates


    Bill & Melinda Gates Foundation 58

    Ben Bernanke

    Chairman, Federal Reserve

    United States 59

    Abdullah bin Abdul Aziz Al Saud


    Saudi Arabia 89

    Mario Draghi


    European Central Bank 66

    Michael Duke


    Wal-Mart Stores 63

    David Cameron

    Prime Minister

    United Kingdom 47

    Carlos Slim Helu & family

    Honorary Chairman

    América Móvil 73

    Warren Buffett


    Berkshire Hathaway 83

    Li Keqiang


    China 58

    Jeff Bezos

    CEO 49

    Rex Tillerson


    Exxon Mobil 61

    Sergey Brin

    Cofounder, Director Of Special Projects

    Google 40

    Larry Page


    Google 40

    Francois Hollande


    France 59

    Timothy Cook


    Apple 53

    Dilma Rousseff


    Brazil 65

    Sonia Gandhi

    President, Indian National Congress

    India 66

    Jamie Dimon


    JPMorgan Chase 57

    Ali Hoseini-Khamenei

    Grand Ayatollah

    Iran 74

    Mark Zuckerberg

    Cofounder, Chairman and CEO

    Facebook 29

    Jeffrey Immelt


    General Electric 57

    Benjamin Netanyahu

    Prime Minister

    Israel 64

    Lloyd Blankfein


    Goldman Sachs Group 59

    Manmohan Singh

    Prime Minister

    India 81

    Michael Bloomberg

    Mayor, New York City

    United States 71

    Li Ka-shing


    Hutchison Whampoa 85

    Charles Koch


    Koch Industries 78

    David Koch

    Executive Vice President

    Koch Industries 73

    Ban Ki-moon


    United Nations 69

    Rupert Murdoch & family

    Chairman and CEO

    News Corp 82

    Khalifa bin Zayed Al-Nahyan


    United Arab Emirates 65

    Christine Lagarde

    Managing Director

    International Monetary Fund 57

    Xuedong Ding

    Chairman, China Investment Corp

    China 53

    Enrique Pena Nieto


    Mexico 47

    Mukesh Ambani


    Reliance Industries 56

    Haruhiko Kuroda

    Governor, Bank of Japan

    Japan 69

    Ali Al-Naimi

    Oil Minister

    Saudi Arabia 78

    Lee Kun-Hee


    Samsung Group 71

    Larry Fink

    Cofounder, CEO

    BlackRock 61

    Bill Clinton


    Clinton Global Initiative 67

    Akio Toyoda


    Toyota Motor 57

    Masayoshi Son


    Softbank 56

    Kim Jong-un

    Supreme Leader

    North Korea 30

    Elon Musk

    Founder, CEO

    Space Exploration Technologies Corp. 42

    Terry Gou


    Hon Hai Precision 63

    Martin Winterkorn


    Volkswagen Group 66

    Jim Yong Kim


    World Bank 53

    Lakshmi Mittal

    Chairman and CEO

    ArcelorMittal 63

    Geun-hye Park


    South Korea 61

    Dmitry Medvedev

    Prime Minister

    Russia 48

    Bernard Arnault & family

    Chairman and CEO

    LVMH Moet Hennessy Louis Vuitton 64

    Bill Gross

    Cofounder and Co-Chief Investment Officer

    Pacific Investment Management Company LLC 69

    Virginia Rometty


    IBM 55

    Shinzo Abe

    Prime Minister

    Japan 59

    Larry Ellison


    Oracle 69

    Margaret Chan


    World Health Organization 66

    Igor Sechin


    Rosneft 53

    Robin Li

    Founder and CEO

    Baidu 45

    John Roberts

    Chief Justice, U.S. Supreme Court

    United States 58

    Alisher Usmanov


    Metalloinvest 60

    Aliko Dangote


    Dangote Group 56

    Reid Hoffman


    Greylock Partners 46

    John Boehner

    Speaker, U.S. House of Representatives

    United States 64

    Joaquin Guzman Loera

    Drug Trafficker

    Sinaloa Cartel 56

    Jill Abramson

    Executive Editor

    New York Times Co. 59

    Joseph Blatter


    FIFA 77

    Yngve Slyngstad

    CEO, Norges Bank Investment Management

    Norway 51

    Mohammed Ibrahim


    Mo Ibrahim Foundation 67

    Janet Yellen

    Vice Chairman, Federal Reserve

    Washington, United States 67

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    The World's Most Powerful People 2013

    Who's No. 1?

    Who’s more powerful: the autocratic leader of a former superpower or the handcuffed commander in chief of the most dominant country in the world? This year the votes for the World’s Most Powerful went to Russian President Vladimir Putin. He climbs one spot ahead of U.S. President Barack Obama, who held the title in 2012.

    Putin has solidified his control over Russia while Obama’s lame duck period has seemingly set in earlier than usual for a two-term president — latest example: the government shutdown mess. Anyone watching this year’s chess match over Syria and NSA leaks has a clear idea of the shifting individual power dynamics.

    The Most Powerful People in the World list is an annual snapshot of the heads of state, CEOs and financiers, philanthropists and NGO chiefs, billionaires, and entrepreneurs who truly rule the world. It represents the collective wisdom of top FORBES editors, who consider hundreds of nominees before ranking the planet’s top 72 power-brokers – one for every 100 million people on Earth — based on their scope of influence and their financial resources relative to their peers. (See full methodology here).

    This year’s list features 17 heads of state who run nations with a combined GDP of some $48 trillion — including the three most powerful people, Putin, Obama and Xi Jinping, the general secretary of the Communist Party of China. The 27 CEOs and chairs control over $3 trillion in annual revenues, and 12 are entrepreneurs, including new billionaires on the list, Nigeria’s Aliko Dangote (No. 64), founder of Dangote Group, and Oracle’s Larry Ellison (No. 58). Speaking of, this year’s class has 28 billionaires valued in excess of $564 billion.

    Newcomers: Among the 13 newcomers are Pope Francis (No. 4), Samsung Chairman Lee Kun-Hee (No. 41), Volkswagen’s Martin Winterkorn (No. 49), South Korean President Park Geun-hye   (No. 52), IBM CEO Virginia Rometty (No. 56), and Janet Yellen (No. 72), nominated by President Obama as the next leader of the U.S. Federal Reserve. Rosneft CEO and Putin confidant Igor Sechin (No. 60) and Jill Abramson (No. 68), the executive editor of the New York Times, make a return appearance after dropping of the list in years past.

    He’s Not No. 1: This is the first year that Putin carries the crown. Obama has been on the top of the list for every year with the exception of 2010, when Hu Jintao, the former political and military leader of China, was No. 1.

    Women Moving Up In Numbers: This year there are nine women on the list, representing 12% of the world’s most powerful — in stark contrast to being 50% of the world’s population. Both 2011 and 2012 featured six women leaders, and the inaugural list from 2009 included only 3 — or just 4.4%. Recently elected Park of South Korea joins the other female heads of state German Chancellor Angela Merkel No.5), Brazil’s Dilma Rousseff (No. 20)and de facto head of India Sonia Gandhi (No. 21). Two of the world’s most important NGO’s are run by women: Christine Lagarde (No. 35) leads the IMF and Margaret Chan (No. 59) steers the World Health Organization.

    Billionaires: Worth a cumulative $564 billion. Sure they’re rich but many of these billionaires deserve special attention for their philanthropic work, including Warren Buffett (No. 13), Michael Bloomberg (No. 29), Li Ka-shing (No. 30), Charles and David Koch (No. 31), and Mohammed Ibrahim (No. 71).

    Entrepreneurs Represent:  There are 12 in total. As expected, many are headquartered on the West Coast:  Google’s Larry Page and Sergey Brin (No. 17), Mark Zuckerberg (No. 24), Elon Musk (No. 47), Ellison and Reid Hoffman (No. 65). Global entrepreneurial spirit spans from Japan’s  Masayoshi Son (No. 45) and China’s Robin Li (No. 61) to Africa’s Dangote and Ibrahim.

    Year-over-year growth: The FORBES Most Powerful started in 2009, seeking to answer a straight yet complex question: What is the true nature of power and can we really compare and rank heads of state with religious figures and drug traffickers?  The premise has always been to select one person for every 100 million on the planet.

     The first list had 67 slots. This year we are up to 72. At this fifth edition, it’s notable that most of the leaders who made the top 10 on the inaugural list are still on today: Obama, Putin, Bill Gates (No. 6), U.S. Fed Chair Ben Bernanke (No. 7), the King of Saudi Arabia (No. 8), Wal-Mart CEO Michael Duke (No. 10), billionaire Carlos Slim Helu (No. 12), Page and Brin, and Rupert Murdoch (No. 33).

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    Should Universities Become Entrepreneurial Campuses?

    Suddenly, entrepreneurship is “in” on campuses with activities such as MOOCs, business plan competitions and incubators. This trend seems to be not only in business schools but across the university. Is this good or are universities biting off more than they can chew?

    There are many reasons for this sudden surge in activity and interest in entrepreneurship. One hope is to develop an entrepreneurial spirit so that people take initiative and “just do it” (to borrow the Nike slogan). The goal is to make not just the students entrepreneurial, but also faculty, staff, and administrators.

    Another hope is to make money to replace a decline in government funding. But is this possible? The entrepreneurial market is a treacherous one. Entrepreneurs need training but usually cannot afford to pay for it. Low-cost workshops are not likely to offset cuts in external funding.

    Still another reason is to create jobs and develop the area economy. The shining example in all of this is Stanford University. Whether or not Stanford actually did anything to create the magic of Silicon Valley or just happened to be in the right place at the right time is a difficult question to answer. We do not ask why someone became rich. We admire, envy, know how, and emulate.

    Perhaps the most obvious reason why campuses have discovered entrepreneurship is that they have suddenly realized that most of their campus buildings are named after entrepreneurs. Entrepreneurs in America have been very generous to their alma maters. Entrepreneurs acknowledge their roots, they appreciate the kindnesses shown to them when they were students, and they attribute a portion of their success to their education. So they generously give and get their names emblazoned on the walls of ivy.

    But do we really want an entrepreneurial campus? And what does that mean?

    Entrepreneurs are leaders. Not everyone is, or can be, a leader. And even fewer are good leaders. We should teach entrepreneurship, just as we teach leadership. But not all students become successful entrepreneurs or leaders just because they have taken a few classes. And not all students mature at the same rate or are motivated at the same age. 

    If the definition of an entrepreneurial campus is to actually start businesses, the odds are that a huge proportion will fail. Best estimates are that VCs fail to reach their goals on about 80 percent of their investments. Corporations adjust to failure by firing the ones who caused it and shareholders pay the price. Can universities do the same and who will pay the price?

    Entrepreneurship usually needs more than a full-time commitment. This means that students may have to quit their studies (like Jobs, Gates, Zuckerberg, Dell DELL +0.22%, Page and Brin), staff will have to leave their jobs, and faculty will need to leave tenured positions. Are they ready to do that? It may be easier to do this in Palo Alto where a great infrastructure for venture development already exists. Elsewhere it could be hazardous except in the case of exceptional entrepreneurs like Gates and Dell.

    Universities will need to design and nourish an environment where risk-taking entrepreneurship flourishes. But that can be difficult in an institution where the main roads for institutional leaders lead to the shelter of tenure, and where tenure is given to those who have theoretical accomplishments rather than practical achievements. Faculty members who seek the security of tenure may not willingly accept the risk of entrepreneurship. In their perfect world, they would like the upside without the downside.

    MY TAKE: There is a difference between teaching and doing. Teaching entrepreneurship throughout the university can be helpful. It may give some students the confidence to start their own businesses, and help others who are underemployed to pursue their dreams. 

    Some may even strike gold. But when universities do, i.e. when they become the entrepreneurial champions, they take on the risk. Universities, as they are structured today, may not have the ideal structure to become entrepreneurial champions. Additionally, universities, like other large organizations, want employees to “think outside the box.” 

    But with too much freedom to pursue their passion, universities may find that costs flow to the organization while benefits flow to the employees, especially when there are no patents. This may require universities to define the limits to entrepreneurship, i.e. the second box outside the first. But, paradoxically, the second box could defeat the whole purpose of the new program with more rules and regulations.

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    The Six Enemies of Greatness (and Happiness)

    The Six Enemies of Greatness (and Happiness)

    These six factors can erode the grandest of plans and the noblest of intentions. They can turn visionaries into paper-pushers and wide-eyed dreamers into shivering, weeping balls of regret. Beware!

     1) Availability

    We often settle for what’s available, and what’s available isn’t always great. “Because it was there,” is an okay reason to climb a mountain, but not a very good reason to take a job or a free sample at the supermarket.
    And sadly, we'll never know everything.

     2) Ignorance

    If we don’t know how to make something great, we simply won’t. If we don’t know that greatness is possible, we won’t bother attempting it. All too often, we literally do not know any better than good enough.

     3) Committees

    Nothing destroys a good idea faster than a mandatory consensus. The lowest common denominator is never a high standard.

     4) Comfort

    5) Momentum

    If you’ve been doing what you’re doing for years and it’s not-so-great, you are in a rut. Many people refer to these ruts as careers.

    6) Passivity

    There’s a difference between being agreeable and agreeing to everything. Trust the little internal voice that tells you, “this is a bad idea.”

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  • 11/25/13--06:49: The Majestic Shiva 11-25

  • Shiva meaning "The Auspicious One"), also known as Parameshwara(the Supreme God), Mahadeva, Mahesh ("Great God") or Bholenath ("Simple Lord"), is a popular Hindu deity and considered as the Supreme God within Shaivism, one of the three most influential denominations in Hinduism. Shiva is regarded as one of the primary forms of God, such as one of the five primary forms of God in the Smarta tradition, and "the Destroyer" or "the Transformer" among the Trimurti, the Hindu Trinity of the primary aspects of the divine. Shiva is also regarded as the patron god of yoga and arts.

    Shiva is usually worshiped in the aniconic form of Lingam. Shiva of the highest level is limitless, transcendent, unchanging and formless. However, Shiva also has many benevolent and fearsome forms.[16] In benevolent aspects, he is depicted as an omniscient Yogi who lives an ascetic life on Mount Kailash, as well as a householder with wife Parvati and two sons, Ganesha and Kartikeya or as the Cosmic Dancer. In fierce aspects, he is often depicted slaying demons. The most recognizable iconographical attributes of the god are a third eye on his forehead, a snake around his neck, the crescent moon adorning and the river Ganga flowing from his matted hair, the trishula as his weapon and the damaru as his instrument.

    Shiva as we know him today shares features with the Vedic God Rudra.

    The Sanskrit word Shiva  comes from Shri Rudram Chamakam of Taittiriya Samhita  of Krishna Yajurveda. In simple English transliteration it is written either as Shiva or Siva. The adjective śiva, is used as an attributive epithet not particularly of Rudra, but of several other Vedic deities.

    The other popular names associated with Shiva are Mahadev, Mahesh, Maheshwar, Shankar, Shambhu, Rudra, Har, Trilochan, Devendra (meaning Chief of the Gods) and Trilokinath (meaning Lord of the three realms).

    The Sanskrit word śaiva means "relating to the god Shiva", and this term is the Sanskrit name both for one of the principal sects of Hinduism and for a member of that sect. It is used as an adjective to characterize certain beliefs and practices, such as Shaivism. He is the oldest worshipped Lord of India.


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    Microsoft’s New CEO Must See the Future Before the Competition Sees Iti

    Since its founding, Microsoft has had only two CEOs: Bill Gates and Steve Ballmer. Having only two CEOs for that long a time worked quite well, and now Gates is trying to find a new leader to take the helm who can grow the company and have a long tenure. This is not the best approach, because finding someone who will stay for a long time is much easier than finding someone who will have the vision to lead the company through a product transformation that will yield a new growth curve.

    Over the past few decades, technological change certainly seemed fast, but compared to the past few years it was actually quite slow. For those that are old enough to remember, at one time our primary computer was the mainframe. It took quite a bit of time for the desktop to become our primary personal computer, and Microsoft played a key role in making the platform shift that would drive the PC revolution.

    Years passed before we all experienced another platform shift that would make our PC experience mobile: the laptop. With that shift, the operating system did not need to change—it worked in the same way as a desktop. Even the user experience was similar; the main differences were a smaller screen, slower processing speed, and less storage space. Since the operating system and the general software remained the same between the two platforms, people were basically doing the same things, just on a mobile device. The change was minimal for the software makers (like Microsoft) as well as the user.

    Today, however, the change is very different. In the past few years we have experienced two major revolutions occurring at the same time, faster than ever before. They are 1) a hardware revolution, and 2) a software revolution.

    No longer is our primary computer a desktop or even a laptop; it’s now a smart phone. The reason this platform shift is so disruptive is that it has combined your personal mobile phone and your computer, not to mention your camera and many other things, into a device you carry with you at all times. And thanks to the cloud, virtualization, and hi-speed wireless bandwidth, our smart phones can tap into supercomputers in the cloud and store almost infinite amounts of data.

    This major hardware revolution happened extremely fast—faster than any other platform shift in history—and it was accompanied by a software revolution as well. By that, I’m talking about apps for mobile devices.

    An app for a mobile device is very different than buying a packaged office suite from a large software manufacturer, like Microsoft. The apps are either free or low fee, they can bring enterprise-level functions on a phone thanks to software-as-a-service (SaaS), and they can be installed by anyone easily (and deleted just as fast). In addition, apps allow us to personalize the computing experience in a way we couldn’t do before.

    For example, if I have an iPhone 5S and you have an iPhone 5S, and if we both use AT&T as our provider, I would bet you $1,000 that my iPhone is vastly different from yours. How can that be? Because I have apps that I’ve selected just for me, just as you have apps you've selected just for you.

    In other words, it’s not just an iPhone; it’s a myPhone. And the same thing is true for the Google Android phones, Microsoft phones, and every other smartphone. Today’s software allows us to personalize our computing device, and that’s a huge shift. Those two rapid revolutions and the major platform shift have been making it difficult for the leaders of the old platform to catch up.

    Remember, too, that the first quarter of 2013 was the first time since PCs were invented that sales declined. The same thing happened in the second and third quarters. When we get the fourth quarter earnings, I’m sure we’ll see similar results. So this is not a cyclical change. It’s what I call a linear change: a one-way change that is transforming how we live, work, and play. We will still have laptops and desktops for that matter, but we are using them less every day.

    That means the game has been changed on Microsoft and all of the other industry leaders. Because of the speed of the revolutions, the expertise and the core competencies of Microsoft are geared more for where we’ve been than for where we’re going. With that said, though, it’s important to note that Microsoft has great people — great thinkers — and they can definitely move forward in an industry-leading way. The key is that they need to shift their focus to using what I call the hard trends — the trends that will happen — to jump far ahead of the competition.

    Of course, it’s hard to jump ahead when you have a lot of legacy systems and clients who are spending large amounts of money to support those systems. As a result, as you try to jump ahead, you often get slowed down, especially if you’re a large organization like Microsoft, as well as many of Microsoft’s large customers. Your resources are typically put toward supporting, maintaining, and innovating around the existing systems rather than putting all-out effort into the new platform, which, by the way, is where the new platform leaders are going.

    Knowing all this, is it time for new leadership at Microsoft? Even though both Gates and Ballmer have done amazing things that involved a lot of planned disrupting and innovation over a long period, the answer is yes. Will the new CEO stay as long as Gates or Ballmer did? I don’t think this is an important question given everything I have been talking about. Change today is not enough; we now need transformation. Think of it this way: Blackberry changed how we use our cell phones; Apple transformed it.

    Based on the hard trends in play today, over the next five years we will see a transformation in how we sell, market, communicate, collaborate, innovate, train, and educate. And much of that transformation comes from mobility, apps, the cloud, and all the new and rapid software innovations coming at us. Think of it as a mobile, social, virtual, and visual transformation. And because the speed of change will only increase, we’ll need transformational thinking, a commitment to use hard trends, the ability to see the direction the future is heading in, and to be the disruptor not the disrupted.

    So, is the future bright for Microsoft? I believe it can be... if they choose well and find people who can help to not just change Microsoft, but to transform it from the inside out.

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    Disruptions: If It Looks Like a Bubble and Floats Like a Bubble …


    SAN FRANCISCO — It sounds like heresy around here. But here goes:

    Is this another tech bubble?

    Back East, the Wall Street money is starting to worry that it feels like 1999 all over again. Money-losing technology companies are going public at you’ve-got-to-be-joking prices. The founders of Snapchat are getting multibillion-dollar offers — and turning them down. And the Nasdaq composite index, a visible symbol of the ’90s dot-com boom and bust, is a sneeze away from 4,000, a level it last reached just before, well, you know.

    Is this time different? Out in Silicon Valley, many insist it is. But for the average investor, there are reasons for caution.

    Since the dark days of 2008, the Nasdaq has risen more than 150 percent, twice as much as the old-school Dow industrials. Money has been pouring into social media stocks. As of Friday, Twitter had risen nearly 60 percent since it went public only a few weeks earlier.

    Once again, new “metrics” are being applied to justify stratospheric valuations. Twitter is losing money. A price-to-earnings ratio? There is no E in the P/E. But its stock is trading at 20-odd times the company’s annual sales. Good enough.

    There is more. Technology companies have become the takeover bait du jour. A report   issued by Ernst & Young last week said that mergers and acquisitions in the global technology industry have rebounded to “a new post-dot-com bubble high.” Roughly $71 billion in deals were made during the third quarter.

    And then there is, the poster child of the dot-com bust. Kozmo is back. Last time, its couriers would deliver just about anything at any hour — CDs, Milky Way bars, you name it. It burned through $280 million before going bust.

    “Remember us?” a banner on the reads now. “We’re relaunching soon.”

    Many technology entrepreneurs and venture capitalists say there is little to worry about. Which tells you something about bubbles and Silicon Valley. It is difficult to know when any bubble is going to pop until it does. And in Silicon Valley, with its inherent optimism in brighter tomorrows, the view tends to be that the way is always up.

    “I’m not going to say there is a bubble or there isn’t a bubble,” said Naval Ravikant, co-founder of AngelList, a website for raising money for start-ups. “But I lived through the first bubble, and I was in disbelief the entire time, and I don’t see anything of that magnitude or scale here today.”

    Such assurances aside, the numbers are sobering. Eight months ago, Snapchat was valued at $70 million. Today, it is valued at $4 billion,   even though it has zero revenue. Six months ago, Pinterest was valued at $2.5 billion. Today, it is valued at $3.8 billion — and no revenue there, either. And last week news broke that Dropbox was said to be seeking a new round of funding   that would value the company at $8 billion, up from $4 billion a year ago.

    In Silicon Valley, pointing out this sort of thing is considered a bit impolite.

    J. William Gurley, a general partner at Benchmark Capital, a big venture capital firm, has scoffed at people   who “write silly articles about the notion of a pre-revenue company having a very high valuation.”

    When the media likened the precipitous decline   in the shares of Groupon to the events of the late ’90s, venture capitalists went on the offensive.

    Michael Arrington, a partner at CrunchFund, wrote on Twitter that The Wall Street Journal was waging a vendetta against the company because it wrote a headline that read:“Groupon Investors Give Up.”   Chris Dixon, a partner at another venture capital firm, Andreessen Horowitz, joined in on Twitter.

    “Everything is spun negatively,” Mr. Dixon wrote. “Comparing current valuations to the dot-com bubble is simply irresponsible.”

    The venture firm Mr. Dixon joined last year was responsible for $40 million of the $950 million that early investors put into Groupon. But public stockholders have not done well. Groupon’s share price has been cut in half in the past two years.

    Wall Street is starting to question how long this can all last. A recent Bloomberg survey   of Wall Street investors, analysts and traders who use the company’s financial data terminals found that the majority thought Internet and social media stocks were at or near unsustainable levels.
    Roughly half said that the bubble was here or soon would be.

    Not that the big investment houses are shouting sell. They rarely do. As of Friday, 12 of the 17 stock analyst recommendations for Twitter available on Bloomberg terminals were buy or hold. Only five were sell. Of the 48 recommendations for Facebook, 40 were buy and eight were hold. Not a sell to be found.

    Michael Mandel, an economist at the Progressive Policy Institute in Washington who wrote presciently about the ’90s dot-com era, said that if there was a bubble this time — and there might be — its bursting would not be as bad as the last one. That is because back then, start-ups advertised on other start-ups’ websites and, in many respects, robbed Peter to pay Paul. So when one company collapsed, other dominoes fell, too.

    “Bubbles that are not self-feeding are not a big problem, and I’m not seeing the kind of self-feeding that I saw in the ’90s,” Mr. Mandel said. “So if it turns out that the social media boom is overdone, or that any aspect of the tech economy is overdone, the only thing that will get lost is the money that was invested.”

    Still, now that companies like Facebook and Twitter are traded on the stock market, the investing public at large is exposed. If big investment institutions pull back from the broad stock market or, worse, start dumping technology shares, everyday investors could get caught in the downdraft.

    “What’s likely to happen is that there will be a huge winner-takes-all outcome, where one or two companies and investors will be successful,” said David Santschi, chief executive at TrimTabs Investment Research in Sausalito, Calif. “But as a result, there will be a lot of companies that are just going to go poof.”

    And a lot of people’s money will go poof with them.

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    How Sharing Other People's Content Makes You an Irresistible Job Candidate

    When it comes to standing out online, your best bet is to offer your own original content. Blog posts or tweets that revolve around your unique ideas will make you a standout candidate.

    But the truth is, not everyone has the time, writing ability or even confidence to grow a quality blog or social media account, and plenty of people who don’t have a blog still want to move up the career ladder, into more challenging and better-paying positions.

    What if there was a way to show the world just how smart you are, without creating your own content?

    Well, there is, and it’s a tactic you should seriously consider:sharing other people’s content  .

    Whether you curate on Twitter, Pinterest, LinkedIn, Tumblr or all of the above, here are five things sharing content created by others says about you — and why it can move your career forward.

    1. You know your industry inside and out.

    When you share an abundance of interesting information, people begin to realize you know your stuff. Not only do you know what’s going on, but you understand what’s valuable to people in your industry and what they want to read, which is just as important.

    Even if you don’t consider yourself highly knowledgeable on a certain topic — if, for example, you’re looking to change careers and are using your online presence to pivot — you’ll become knowledgeable on that topic as you sift through blogs and tweets looking for quality information to share. In other words, curating content can help you become an authority in your field and help others see you as an authority.

    2. You’re innovative.

    Not only do you use the latest social tools to share advice and ideas, the information you share is often about your industry’s latest trends and developments, which suggests you’re forward thinking.

    Anyone can say in an interview that they like to follow tech trends, but serving your community as a content curator shows the hiring manager you’re serious about learning, brainstorming and innovating.

    3. You enjoy helping others.

    So many people talk about themselves on social media. You’ll stand out if you get off the soapbox and instead offer helpful, valuable information, giving props to whoever created it.

    This is helpful not only to the minions who read your tweets, but also to the industry leaders who wrote the blog post, tweets or updates to begin with, since you’re helping spread their content and ideas. Those thought leaders will likely appreciate your efforts and might even look to connect further with you, which could lead to more opportunities.

    See why being generous online   is one of the best things you can do for yourself?

    4. You’re familiar with the big (and little) players in your field.

    Knowing who the thought-leaders are in your field and where they hang out is just as important — if not more — than being in-the-know about innovative developments. Why? Because those people likely are part of those developing trends, or at least talking about them. In many ways, they are the trends.

    In their book The Startup of You, Reid Hoffman and Ben Casnocha wrote, “If you’re looking for an opportunity, you’re really looking for people.” Knowing who’s doing what in your industry can go a long way toward helping you take the next step in your career. Curating content is a solid way to keep up with what everyone’s doing.

    5. In some cases, you have access to those industry players.

    Know what every employer wants more than an awesome, skilled employee? An awesome, skilled employee who knows people. Every one of your connections means a connection for your company.

    If you don’t know any of the major players in your industry now, look to create those connections through sharing other people’s content. Your generosity could lead to online conversations with those people as they leave comments on your blog posts or reply to you through Twitter. Really want to get on their radar? Try an email introduction after you’ve mentioned that contact on your blog or Twitter, with the hope that they’ll recognize your name.

    If you’re keen to give this a go, you’re probably wondering: What’s the best way to find quality information to share with your growing online community?

    Try using an RSS tool like Feedly, organizing tweeps who share valuable information into Twitter lists, and streamlining the sharing process with apps like Hootsuite, Buffer and Twitterfeed. Before you know it, you’ll be the one who people in your industry turn to for all the best information, which makes you that much more marketable.

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    The Hidden Benefits of Keeping Teams Intact

    A few years ago one of us met an orthopedic surgeon with a reputation as the Henry Ford of knee replacements. Most surgeons take one to two hours to replace a knee, but this doctor routinely completes the procedure in 20 minutes. In a typical year he performs more than 550 knee replacements—2.5 times as many as the second-most-productive surgeon at his hospital—and has better outcomes and fewer complications than many colleagues. During his 30-year career he has implemented dozens of techniques to improve his efficiency. For instance, he uses just one brand of prosthetic knee, and he opts for epidurals rather than general anesthesia. But another factor contributes to his speed: Although most surgeons work with an ever-changing cast of nurses and anesthesiologists, he has arranged to have two dedicated teams, one in each of two adjoining operating rooms; they include nurses who have worked alongside him for 18 years. He says that few of the methods he has pioneered would be practical if not for the easy familiarity of working with the same people every day.

    Managers understand intuitively that team familiarity—the amount of experience individuals have working with one another—can influence how a group performs. But over the past seven years we’ve examined teams in corporate, health care, military, and consulting settings to understand team familiarity and quantify its benefits, and we’ve found that it is a much more profound phenomenon than most managers believe. They could and should be leveraging it to a far greater extent, especially in an era when teams are constantly forming, disbanding, and regrouping.

    To do so they will need to overcome several barriers. Few organizations have integrated systems that track how frequently employees have worked together. Many managers put too much faith in shuffling rosters to prevent staleness and ensure fresh thinking. And realities such as cost pressures, developmental needs, travel limitations, and office politics often make familiarity hard to achieve. But organizations will benefit if leaders learn to surmount those barriers.

    Take Advantage of the Learning Curve

    We aren’t the first to investigate the importance of team familiarity. Prior research by academics such as the Harvard psychology professor Richard Hackman, who studied the performance of flight crews, has established that teams, like individuals, experience a learning curve. They generally do better as their members become familiar with one another. Other researchers have looked at how the performance of pro basketball teams varies according to how long players have been together. (See the sidebar “Stranger Danger.”) In our work we have tried to better understand the degree to which performance improves with team familiarity, particularly in project-based environments in which so-called fluid teams frequently form and re-form.

    Stranger Danger

    In a study conducted with the University of Oxford professor David Upton at the Bangalore-based software services firm Wipro, we examined 1,004 development projects involving 11,376 employees, using detailed personnel records to determine which employees had worked together before and to what extent. Then we looked at how well teams did, using criteria such as the number of defects in the software each team produced and the groups’ adherence to deadlines and budgets. Rather than regard team familiarity as an all-or-nothing proposition, we constructed a continuous measure, counting the number of times team members had worked with one another over the previous three years and scaling the results according to the number of people on the team. We found that when familiarity increased by 50%, defects decreased by 19%, and deviations from budget decreased by 30%. We also found that familiarity was a better predictor of performance than the individual experience of team members or project managers.

    In a second study at Wipro, we looked at how teams coped with the challenges of diverse experience among their members and found that although such diversity was generally associated with lower performance, teams with high degrees of familiarity were able to use it to improve. A third study one of us conducted with audit and consulting teams (in collaboration with Heidi Gardner and Francesca Gino, both of Harvard Business School) found a 10% improvement in performance, as judged by clients, when teams had members with a high degree of familiarity.

    Why does team familiarity have such an outsize effect? Our research suggests that five factors are primarily responsible.

    Coordinating activities. Teams made up of diverse specialists are infamous for their inability to get things done. Despite the best-laid plans of the managers who assemble such teams, the differences among members frequently lead to poor communication, conflict, and confusion. Members new to one another simply don’t understand when and how to communicate. Some groups never master this; and even in groups that do, the process takes time, slowing progress toward team goals. Familiarity can help a group overcome this obstacle: Once a team has learned when and how to communicate on one project, it can carry those skills over to the next.

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    The Job Market for MBAs is About to Take a Hit

    If you’re graduating from business school this spring, you might want to be sitting down for this: the job market for recent MBA graduates looks poised to get a lot worse in 2014. That’s based on an annual survey conducted by Michigan State University, released yesterday.

       Though not random, it samples nearly 6,100 employers who recruit across 300 U.S. colleges and universities, asking about their anticipated hiring in the coming year, as compared to their actual hiring this year. The news is positive for those about to graduate from college, but potentially distressing for soon-to-be MBAs.

    First the good news: Hiring of college graduates is expected to increase three percent in 2014, with some sectors doing even better than that.

    “Strong demand for accounting, marketing, computer science, engineering, human resources, public relations, and the inclusive ‘all majors’ group will increase hiring for Bachelor’s degrees by seven percent,” writes lead economist Phil Gardner. The overall number would be even higher, in double digits, except that the normally robust financial services sector seems to have lost its appetite for hiring. Which brings us to MBAs:
    The market for new MBAs has been hit hard. Since January, finance institutions have been shedding jobs by the thousands and curtailing hiring targets for new graduates. The federal government also expects to hire far fewer MBAs this academic year. Professional and scientific services, mining and oil, and manufacturing do not expect to change their hiring levels. The total contraction in the market for new MBAs will approach 25 percent.
    The decline in government hiring is attributed to sequestration, the shutdown, and debt limit “brinkmanship.” As for finance, the survey cites news reports   which attribute the sector’s contraction to a variety of factors, including a slump in the mortgage refinancing industry.  
    The report notes that some employers, concerned over economic uncertainty, planned to replace MBA hires with Bachelor’s candidates to cut costs.
    The news comes as the number of newly minted MBAs continues to increase, as noted by the report. While graduates of top programs will likely be fine, Gardner cautions that “MBAs with little professional experience may have more difficulty landing a job commensurate with their education.”

    View at the original source

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    The Power of Sustainable Supply Chains

    Supply chains can be made stronger and more sustainable if the people working at different stages in them have stable and sufficient earnings. This is the basis for The Body Shop’s “Community Fair Trade”   programme, which ensures 25,000 workers in marginalised communities earn a fair wage. 

    The programme directly benefits more than 320,000 people per year supporting the creation of sustainable businesses, education, health and environmental projects. It makes the supply chain more reliable and can reduce volatility in the prices of raw materials as producers and suppliers have a more direct relationship. 

    Between 2008 and 2013 the market price volatility for soya oil was over 30%, while for The Body Shop’s “Community Fair Trade” suppliers price volatility was less than 10%.  “Community Fair Trade” is central to the company’s marketing and recruitment, inspiring staff and providing stories that resonate with customers, 70% of whom state that Community Fair Trade is a factor for them visiting The Body Shop. As the proportion of Body Shop products containing or being made by Community Fair Trade suppliers has increased from 60% in 2008 to over 90% in 2012, it has also influenced parent company L’Oreal to convert six of its key raw materials to Community Fair Trade sources.

    Supporting smallholder farmers, investing in the value chain, and developing entrepreneurs are the three components of SABMiller’s enterprise development programme  . Smallholder programmes providing financial and technical assistance have created employment and raised income levels among disadvantaged farmers in Africa and Asia. 

    Many farmers have been able to move from subsistence agriculture to small-scale agribusiness and have improved the quality of their lives as a result. Working with local suppliers has built their capacity to deliver quality products and enhanced their ability to grow. These actions are also good for SABMiller’s business. Local sourcing of sorghum in Uganda and Zambia for instance qualifies SABMiller for low excise rates. 

    This allows SABMiller to sell the product at a third less than lagers using imported barley, generating sales revenue for Eagle Lager of approximately US$43 million a year in Uganda. Smallholder sourcing has also helped build a market share of over 35% in India.

    At the other end of SABMiller’s value chain, the company works closely with thousands of micro and small retailers, recognising their significant potential contribution to economic growth and development, particularly in developing and emerging markets. SABMiller is investing US$17m in a programme with the Inter-American Investment Bank, for small retailers, or ‘tenderos’, across Latin America. 

    The ‘4e Camino al Progresso’ programme focuses on the development of the capabilities of the tenderos to improve their business, the quality of their and their families’ lives, and to enhance their leadership skills, enabling them to take on responsibilities in their communities.

    Tea, coffee, bananas, chocolate bars, sugar, blueberries and wine are some of The Co-operative’s key own-brand Fairtrade products categories and, with the exception of wine, are all 100% Fairtrade. The Co-operative has committed over £2.5 million to projects that build the capacity and resilience of the producers of these products. The “Going Beyond Fairtrade  ” programme involves 18 co-operatives and producer associations in 13 countries, and supports over 250,000 people, including smallholder farmers, workers and their wider communities. It does this through investing in development projects to help improve productivity, diversify products, strengthen democracy and improve community-wide access to basic necessities like clean water and sanitation.

     This has led to increased incomes, improved health, better access to education, and improved representation of women. In 2012 alone, more than 1,500 children benefited from primary school provision; while 50,000 people have benefited from more than 500 improved water points and 1,100 improved latrines in households and schools.

    This programme has also bought significant business benefits to The Co-operative. Its Fairtrade sales have increased by £61 million in the last three years from £71 million in 2009 to £132 million in 2012.  By investing in development projects to build the capacity and resilience of key Fairtrade producers, The Co-operative is strengthening supplier relationships, securing future sustainability and developing new products. One example is the Fintea Growers Co-operative Union in Kenya, where the programme has strengthened the livelihoods and trading position of 15,000 farmers, increasing the value of their tea by at least 25% through Fairtrade. By achieving Fairtrade certification, the Fintea farmers are now eligible to supply into The Co-operative’s own-brand tea and they supply at least 10% of the leaves blended into The Co-operative’s iconic ‘99’ Tea. 

    The Body Shop, SABMiller and The Co-operative have all developed ways to address global poverty through investing in sustainable supply chains, and at the same time have strengthened their own businesses. Does your business invest in sustainable supply chains and help address global poverty?

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  • 11/26/13--01:37: The Power of Knowledge 11-26
  • The Power of Knowledge

    The power of knowledge can be used to transform communities. When people, at all stages of their lives, have a better understanding of the demands and constraints of their environment, they make better, more sustainable and more profitable decisions. The provision of information and knowledge can fuel innovation and enable individuals and communities to lift themselves out of poverty. 

    When suppliers of services understand the needs of their clients they can be more responsive to these; when agricultural producers know about changing techniques they can use this to their advantage; when information about market trends trickles down to small scale businesses they can respond rapidly to new opportunities; and when women and men understand the business environment they can become effective entrepreneurs.

    Indian agriculture is dominated by small landowners, with 83% of farmers tilling plots smaller than five acres. Tata Consultancy Services helped sugar and dairy cooperatives build and manage their knowledge by working with them to develop an IT solution tailored to their needs. 

    The result is mKRISHI®,   a mobile and web based platform that provides timely and valuable services to Indian farmers. By linking farmers with agricultural experts to provide them with tailored crop advice, a 15% increase in farmers’ productivity has been achieved.

    Farmers are also grouped together onto a common platform, helping them to collaborate to buy seeds and fertiliser in bulk. Farmers have also gained greater leverage in their commercial transactions, for example, farmers were able to cut the interest rates on their loans from 30-50% to 16%. Since piloting mKRISHI® in Chennai in 2011, a further 9 projects have gone ahead and 28 are in the pipeline. By providing technology to those who need it most, this service is projected to generate revenue of more than US$500 million projected over the next five to seven years.

    KPMG uses the power of its skills, knowledge and resources to alleviate global poverty through its Global Development Initiative (GDI)  . Through the GDI KPMG works alongside governments, civil society groups, international agencies and other private sector organizations to become fully involved in finding effective and sustainable solutions to global and local poverty issues. For example, through a global partnership with Women’s World Banking and VisionFund International, KPMG’s Women’s Networks are providing leadership training and mentoring to help female leaders of microfinance institutions. 

    KPMG also advances the development agenda through thought leadership, for example The 2013 KPMG Change Readiness Index, produced in partnership with Oxford Economics assesses the ability of 90 countries (developed and developing) to manage change. Focused around three pillars; enterprise capability, Government capability and people and civil society capability, the index can help countries understand their capacity to respond to change, caused by shocks such as natural disasters or longer term trends like technology, demographics, global competition and investment. KPMG has the scale, influence and insight to make a significant and positive contribution to the issues affecting its communities and environments.  The KPMG commitment to the Millennium Development Goals provides an action and values based focus of engagement for its 152,000 professionals.

    In 2008, believing in the potential of women to grow GDP in emerging markets, Goldman Sachs launched 10,000 Women  , one of the largest corporate investments in women’s economic empowerment at that time.  This $100 million initiative commits to provide 10,000 women around the world with a business and management education. 

    10,000 Women operates through a network of more than 90 academic and non-profit institutions. These partnerships help develop first-rate business training tailored to country-specific needs, mentoring, networking opportunities, and links to capital. The programme is filling a gap in the provision of services to women running small businesses, not only providing them with knowledge and education, but also helping them to enhance their confidence as entrepreneurs and support other positive social outcomes for their families.

    10,000 Women will achieve its goal of reaching 10,000 women around the world by the end of 2013. The initiative has trained women from 43 countries including Brazil, India, and China as well as Afghanistan and Liberia. 83% of surveyed participants have increased their revenues and 74% have created new jobs. The data also shows that 9 out of 10 participants are ‘paying forward’ the benefits of the programme by, for example, mentoring other women on business skills.

    “10,000 Women helped me develop confidence in myself that I didn’t know was there. I just needed the proper tools to succeed.” This is the view of Ayodeji, a 10,000 Women participant in Nigeria and owner of No Left Overs, a catering and hospitality business. Ayo started her business in 2007 making local bean cakes for friends and family. Since graduating from 10,000 Women, her business has grown to 70 employees and recently she opened a restaurant and moved to a larger facility.

    Over 1,000 employees globally have supported the 10,000 Women Initiative including through mentoring and business advising, putting into practice their expertise, experiences and diverse backgrounds.

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    To Understand Consumer Data, Think Like an Anthropologist

    Despite years of consumer research, the pharmaceutical firm hadn’t known about the staining problem. That photo prompted the company to change the product and its communications about the ointment, creating significant value for the firm.

    The beauty of listening to social-media chatter is that one picture or one comment can have an outsized impact on your consumer knowledge and, as a consequence, your profitability. But a lot of people in business don’t appreciate that.
    Corporate social-listening efforts are typically driven by econometricians, computer scientists, and IT technicians—the people who are expert in database management. They understand digital information, but they don’t always understand how to get from information to meaning. So they boil the data down to percentages, treating random comments (and pictures of people with foil on their legs) as noise.
    But if you want meaning, you have to think like an anthropologist. You have to understand that social-listening data is inherently qualitative. That means learning to appreciate the value of the stray remark and synthesizing bits of information into a higher-order sense of what’s going on. That’s how you make the most of social media as a tool for peering inside people’s lives as they’re being lived and discovering what consumers are really thinking and doing.
    “Sure, sure,” the numbers-oriented marketing executives may say. Social listening is great for “exploratory” research, but only as a precursor to “real” research that will determine the truth of what’s being said online. What’s needed, they’ll tell you, is broad-based consumer research using representative samples and adequate sample sizes.
    Querying a representative sample is great for testing a hypothesis or finding a statistical relationship between known concepts. But often, in marketing, you’re dealing with multiple unknowns. Social listening doesn’t presuppose anything. It has no constraints. Although qualitative information won’t give you a simple equation or statistic that you can show the CEO, it can provide answers to questions you didn’t even know you had.
    And comments from a non-representative sample can be highly illuminating. For example, in tech markets, think of the users who regularly post to discussion groups focused on tech products. These knowledgeable netizens provide critical knowledge about product uptake and issues around quality or perception. The same can be said of fan groups and user groups in a variety of fields.
    An important player in the electric-shaver category discovered this. Before the launch of a high-end shaver that was to be priced at more than $500 and was encased in brushed aluminum, an Australian retailer posted pictures and specifications of the product online. Almost immediately, consumers began commenting about the product’s “plastic aesthetic” and “cheap look and feel.” The manufacturer took prompt action, posting a new photo series highlighting the quality manufacturing process and construction, neutralizing the negative sentiment spreading online.
    Successfully disseminating the results of social listening requires skill at seeing stories and developing insights from messy data. It also requires a penchant for simplicity.
    One company we worked with had gone a bit overboard on purchasing tools for integrating social-listening data into its business processes. It had no fewer than 19 dashboards for looking at market and customer behavior, yet none of them were really working. Rather than advise the company to implement yet another new tool, we suggested that an email go out daily, illuminating the most interesting positive and negative statements gleaned that day from customers. The result was that the company acquired a deeper understanding of its customers and drew more insights from the data.
    Our work with social listening often makes us think of the comment by futurist Roy Amara   that people tend to overestimate the effect of a technology in the short run and underestimate its effect in the long run. Amara’s Law seems perfectly apt when it comes to social-media listening.
     At first, marketers were ecstatic about social listening’s potential; then, influenced by the numbers people, their enthusiasm cooled. But they haven’t yet fully appreciated its long-term strategic potential. They don’t yet see that social listening can redefine the way managers approach marketing and that social-listening competency may well define competitive advantage in the digital age.

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    file5991298749300“At times our own light goes out and is rekindled by a spark from another person. Each of us has cause to think with deep gratitude of those who have lighted the flame within us.” – Albert Schweitzer

    Schweitzer’s quote seemed especially timely given the arrival of the Thanksgiving holidays and this year’s rare convergence of Thanksgiving and the first day of Hanukkah, the Jewish festival of lights.

    Both holidays are celebrations of religious freedom and of survival against all odds. Both remind us to be grateful to be alive and to have food on our table, since not everyone on our planet is so lucky. That being said, expressing thanks is both a universal urge and a crucial strength that can be cultivated, not just at Thanksgiving but on any day.

    The world’s religious teachers, ancient philosophers, and indigenous people have spoken about the importance of gratitude for over a thousand years, seeing it as an important virtue to be cultivated and practiced. In religious traditions, the saying of grace before each meal is a way of thanking God for the food on your table.

    file000458839787Most parents teach their children the “magic words” of saying “please” and “thank you”. We have always known intuitively that grateful people seem to be happier with their lives and also more able to confront life’s challenges.

    The More the Better

    Scientists were latecomers to this awareness. Only in the past ten years have researchers started to take a hard look at exactly how and why gratitude leads to increased health and happiness. Now, a growing body of research is emerging that verifies not only this but much more.

    Psychologist Robert Emmons from the University of California at Davis is one of the prominent researchers on gratitude, now conducting highly focused, cutting-edge studies   on the nature of gratitude, its causes, and its consequences. Many other researchers are following suit.

    They have found that gratitude helps boost the immune system and is in itself a form of stress reduction. We are also learning that adversity can, paradoxically, bring an increase in thankfulness. People who have faced losses early in life often have higher levels of optimism, suggesting that adversity can add to personal growth over time.

    file5171267885752Teach Your Children Well

    Research on happy, healthy families has found that the parents in these families emphasize the positive, yearning to bring out the best in one another in spite of individual differences in temperament, talents or interests. They teach core values such as honesty, fairness, kindness and responsibility, and typically foster a spiritual or philosophical perspective that includes serving something greater than just ourselves.

    Rather than focusing on complaints or how the glass is half full, we want to teach children–and remind ourselves–how to learn from mistakes, apologize for wrongdoings, and have gratitude for what we already possess. When we cultivate our positive feelings of joy, empathy, gratitude and love, we are opening our hearts and activating pathways in our brain that lead to more helpful thoughts and actions.

    If you did not come from such a family, you may need some help to be able to change your thinking towards a more optimistic, positive point of view. Negative thinking and complaining can be habit forming. And to break any habit takes conscious effort and deliberate practice.   Make it a goal to be more positive but don’t be hard on yourself if you slip into doom and gloom.

    Self-Help Books on Positive Thinkingfile0001727698973

    A great place to start is with one of the books of psychologist Martin Seligman  , the father of positive psychology. Seligman is a professor at the University of Pennsylvania and the current Director of their Positive Psychology Center. Author of many classics in this rapidly rising field, check out his book Learned Optimism: How to Change Your Mind and Your Life, published in 2006.

    Not only does this book give the reader an overview of the theory and research on both optimism and pessimism, it includes tests for both parent and child to determine levels of positive and negative thinking. The final third of the book provides the most hands-on learning with worksheets for both parents and their children.

    file0001362503108Films and Music That Inspire

    If you would prefer to be inspired through film rather than through a book, depending on the age of your children you could watch The Lion King and discuss the virtues illustrated in this film classic. Two other favorite movies of mine to help jumpstart more positive thinking are Pay It Forward and The Pursuit of Happyness. Watching a movie together at home, taking the time to talk about what you each have learned, can be a fun way to cultivate more positive outlooks and behaviors in yourself and your kids.

    Music is yet another universal way to be inspired and uplifted. What are the songs that build you up rather than bringing you down? I love “Climb Every Mountain” from the Sound of Music and “Anthem” by Leonard Cohen. For songs and activities that bring positive messages to young children, check out the album on Happiness and Attitude  at

    If you want to be inspired but don’t have time for a whole movie, take ten minutes when you can stop, breathe, and open your heart to the exquisite beauty of nature. Louie Schwartzberg has been doing time-lapse photography of flowers for thirty years. In a Ted talk, Nature, Beauty, Gratitude  , his stunning images are accompanied by powerful words from Benedictine monk David Steindl-Rast on being grateful for every day.

    -2Loving What Is

    The German mystical theologian, Meister Eackhart, teaches that “If the only prayer you said in your whole life was, ‘thank you,’ that would suffice.” This quote made me think about how most people generally pray for something. And we generally pray forsomebody, ourselves or our loved ones. We might ask for good health for ourselves or our family members, for food and shelter, for love, for an end to suffering, for miracles, for a job, or simply for strength or wisdom.

    Today, and this Thanksgiving, my prayer is simply this: to be grateful for what is. All of it. The blessings and the suffering, for they both are teachers, and they walk hand in hand. Or as Leonard Cohen reminds us, “There is a crack in everything–that’s how the light gets in.”

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