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My Thoughts on Susan L Wagner of BlackRock Joining Apple’s Board

ds14-0411wagners82-300pxApple appointed Susan L Wagner to their board of directors yesterday and people have been contacting me to ask if that is the same BlackRock I once worked at in the 1990’s. The answer is yes! Here is the announcement:

CUPERTINO, California—July 17, 2014—Apple® today announced that Susan L. Wagner, founding partner and director of BlackRock, has been elected to Apple’s board of directors. Bill Campbell, the board’s longest-serving member, is retiring after 17 years of service.
Wagner co-founded BlackRock in 1988 and helped it become one of the world’s most successful asset-management companies, holding a range of leadership positions including vice chairman until mid-2012. She continues to serve on the boards of BlackRock and DSP BlackRock (India), as well as Swiss Re, Wellesley College and Hackley School.
“Sue is a pioneer in the financial industry and we are excited to welcome her to Apple’s board of directors,” said Tim Cook, Apple’s CEO. “We believe her strong experience, especially in M&A and building a global business across both developed and emerging markets, will be extremely valuable as Apple continues to grow around the world.”
“We conducted an exhaustive search for someone who would further strengthen our board’s breadth of talent and background, and we are delighted to have identified such an outstanding individual,” said Art Levinson, Apple’s chairman. “I’m confident that Sue is going to make an important and positive impact on our company.”

I’m thrilled about this because one of the biggest frustrations of my adult life has been that most people do not fully appreciate the unique transformational leadership abilities that myself and others possess due to our experiences at early BlackRock. I hope that her joining this board forces people to look at and understand the history of BlackRock and that it unleashes a torrent of demand for the early employees who know how to make this rare type of business operations, risk management and business model transformation a reality. The story of what made BlackRock BlackRock during those early days is not well understood. Worse, it is not being transferred to other industries places where it could do good in the world.  This needs to change for the world of business to prosper and migrate in the 21st century.

This insane ignorance of our society about BlackRock was well demonstrated in this article comment about her appointment to the board:


14 hours ago at 02:20 pm

She’s from an investment company but how well does she know tech?

Rating: 3 Votes

UGH!!!! That drives me insane as BlackRock redefined an industry business model leveraging technology 20 years ago in a way that some companies still can’t even dream of today – because they don’t have a culture that empowered people to do things focusing on operational outcomes first. While the technology played a large role, it was about vision, leadership and a culture of trust, fun and empowering people to do the right thing. BlackRock, like Bloomberg, until the past few years was primarily a B2B story – consumer companies with no business model and no revenue get hundreds of times more media coverage in this environment and that is a shame because society is frequently focused on the wrong role models for mentors in business.

Though I didn’t interact with Sue nearly as frequently as Rob Kapito and Larry Fink, I did enough to understand that Sue possesses highly unique abilities and attributes:
– Sue is a a deal maker and unlike the majority of the M&A community, her analysis was much more than purely financial. When BlackRock bought a company it was not kept a silo, it was assimilated  into other BlackRock processes immediately. While most people that didn’t experience it will likely not appreciate the comment fully, this is what made BlackRock, BlackRock in its hypergrowth phase. Apple needs this ability as it acquires various assets.

– In a company where  everyone used a Sun workstation at the time, I vividly recall her insistence on using a Mac..back in 1995.  Rest assured Apple nation, you have acquired one of your greatest evangelists that you didn’t even know you had.

– If someone asked me what  I admired most about her, it would be that she led through quiet, deliberate actions that led to big events occurring.

Other things Apple left off the list are Susan’s operational insights. Apple has had some software missteps in the recent past…I was recently talking to some of my engineering friends that are heavy Apple users and I was saying wouldn’t it be amazing if we could talk to CEO Tim Cook and advise him on how to alter certain processes to increase the integrity of software releases, risk processes and integration using the techniques I used at BlackRock. Maybe someday now due to this event that might become a reality. 🙂

One article also suggested that this might just be a female diversity appointment, I take offense to that as Sue is qualified for this role regardless of her gender based on my knowledge of her. Good luck Sue! Make all of us ex-BlackRocker’s proud with your service on Apple’s board.

P.S. To BlackRock – Why don’t we have a designated alumni community yet? There are so many amazing people  that shared an amazing experience and we should all be collaborating to create future BlackRock’s.

photo credit:

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Ted Matthews Interview : The Real Meaning of ‘Brand’ is Outstanding Culture

Ted Matthews - Culture

At the back of John Warrillow’s Built to Sell, I saw a book mentioned as a must read. That book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

This perspective matches and aligns with my own views quite closely. After a short chat with Ted Matthews via email, a copy of the book arrived and I was reading away.

Why is branding not a creative logo? What is it really?

Branding is the managed care and nurturing of the culture of an organization- building a brand must start, take hold, connect first on the inside, with internal stakeholders- employees and partners and then through osmosis it connects to external stakeholders- customers and critically important future employees.

The logo leads in the visual identity of an organization- important because humans are very visual beings, as Malcolm Gladwell popularized, we recognize images in a ‘blink’ vs recognizing spoken or typeset names. And in this hyper-messaging world nanosecond recognition is the Brander’s key objective.

What are the three primary tools of branding? Why are these overlooked?

Everybody who comes out of business school, knows there are strictly followed tools and rules for the financial discipline- the value protector – managed by the ‘important’ financial department. While there have never been tools or rules, or never a department, for managing the culture/brand discipline- the greatest value creator! There are now…
Tool #1 Be remark-able; have a product or service so good, so unique that people talk about it, publicizing and recommending for you. Jeff Bezos has said “Advertising is the penalty you pay for having an unremarkable product.” Honda has a new feature in their van for the young families who still buy vans- a vacuum for all the crumbs and crushed Cheerios! There, I’ve ‘remarked’ for Honda, no advertising required.
Tool #2 Own a position; a Brand must have a unique and ownable point of difference. If you are not different then you are the same, and same dies away. Volvo owns ‘safety’. Staples owns ‘easy’.
Tool #3 Build you Brand with experiences; Surround your offering with positive experiences, people never forget how you make them feel! AltlasCare, a home heating and air conditioning provider, trains their service people on every detail of experience- like where to stand and how to address people at their front door.

So if it is true that culture is the brand, why do so many companies give this so little attention while giving so much attention to creative services?

Hey, the creative part is fun, involves new ideas, working with crazy fun people, maybe a bit of Hollywood- shooting commercials, seeing your ‘creativity’ on TV. But as for culture, it’s the behind-the-scenes stuff, relationship-stuff, stuff never taught in business schools.
Founding entrepreneurs create culture instinctively- usually around their own personalities, character and their vision for something better. But as organizations grow, they outgrow their founder’s skill set or interest. BlackBerry is an example, two guys change the way the whole world communicates and then loose interest, ‘cause it’s (vision) done- they had moved onto other things that now challenge them.
This is when firms get turned over to professional managers who know how to run businesses at scale BUT, this gets back to our systemic problem, these biz grads never learned about culture nurturing or anything about brand beyond- it’s marketing’s function. Full stop!

You state that if the culture is right, everything falls into place. How should corporations deal with the fact that most of them do not have the culture right and likely not even be able to know it?

Every organization needs a surrogate for the entrepreneur. First, in this broader definition of brand- what people think of you – the CEO needs to assume the role of CBO- chief brand officer. They need to capture their guiding principles in a brand foundation- the carved-in-stone, 7-commandments that guide the organization in everything they say and do. Their core purpose- why they exist, their vision- where they are going and how they will know when they arrive. The mission- what they have to do consistently EVERY day to get there. Their values- who they are as people, their principles. Their position- as I said, how they are different. And their character- their image, their voice. Then the CBO needs to relentlessly remind people of these guiding principles and that everyone has a role in building their brand- consistency is the #1 rule of branding.

You mention an interesting quote at the start of the chapter on “Evolution, not Revolution” by Charles Kettering: “We have a lot of people revolutionizing the world because they’ve never had to present a working model.” Please discuss what that quote means to you.

Kettering was an interesting guy- inventor, businessman, a serial entrepreneur with over 180 patents. In the mid 1800’s he invented the electric starter for gas engines- started Delco- part of GM today.
For me, his quote is about all the people who think innovation and change are easy. While discounting the contribution of our ‘wacky’ entrepreneurs, impatient investors push and merge organizations destroying what made them successful in the first place- my own 30-year, 80-person firm, was deconstructed in 28 months after a merger- another unmanaged clash of cultures. Change must happen, but it must evolve, retaining the brand equity- what an organization is known for. Look, in the news recently- J C Penny is now apologizing for the rush to change by their last board appointed CEO. GAP stirred up a hornet’s nest among their stakeholders with a wholesale identity change that was also reversed. A company does not ‘own’ its brand, it’s owned by the stakeholders who love it.

What events typically precede an organization being ready for change in their culture and why is this so hard to recognize?

It becomes increasingly difficult to retain the best people and impossible to attract new stars.
This flesh-eating disease is hard to recognize, because it sneaks up slowly and is only diagnosed and reported by an under-respected department in North American organizations – HR.
And this is the root of the most critical issue of our day.
Fouled by our leaders’ misunderstanding of brand, their default positioning is ‘cheap’. Then, to ‘sell-for-cheap’ we have given away our former well-paying production jobs to Asia and now, to employ our neighbors so they CAN buy from us, we need to invent all new jobs and do it with a dwindling workforce. 70 million boomers readying to retire, only 30 million young people (not all of them stars) available to replace them.
This startling truth has been disguised by the years of recession- firms watching costs so not hiring, boomers hanging on to jobs in fear their investments won’t support them, young folks (therefore), not seeing the openings and at the same time being a generation that wants a job with meaning, a job with a organization with a core purpose.

It is time for America (and the world) to understand brand, to understand it’s a compelling culture they need.

Again that book is Brand : It ain’t the logo*. The asterisk stands for “It’s what people think of you.”

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Bestselling Author John Mackey – Conscious Capitalism 2013 Book Tour Chicago Stop

conscious capitalism jacketJohn Mackey came to Chicago Wednesday and gave a powerful , paradign-shifting soul-awakening speech about his new book Conscious Capitalism to the Economic Club of Chicago. The event was led by John A Canning Jr., Chairman of Madison Dearborn Partners. Question and answers were moderated by Mary Ann Childers. Later, I attended a second event with him at Chicago’s Lincoln Park Whole Foods Market location.

John Mackey is a wickedly smart and passionate businessman who has created a flexible organizational structure at Whole Foods Market designed to create great connection with the customer. It is very much like the business philosophy I was raised on at BlackRock. It needs to be more common place in our society.

As I’ve stated previously, proper business acumen needs to become a mainstream, highly discussed issue in our society. Sadly, the people that need to read this book the most are the ones most likely to never see it. It is time for a global renaissance in business practices around the world. For that to ever have a chance of occurring, these issues need to migrate from business to mainstream.

I did manage to get a few minutes with John Mackey as you can see in the Youtube video below. He was in a rush so I turned a six minute interview into three minutes and my one of my on the fly question mashups got a little overwhelming regarding the nature of business and media change. I would have liked to have also asked about the Board of Directors stakeholder issues at Whole Foods. Looking forward to getting that the next time I get to interact with him or Raj Sisodia someday.

The book, co-authored by Raj Sisodia whom I need to learn more about, tells the story of the founding of Whole Foods, the amazing and unlikely comeback from a devastating flood in 1981, the unique relationship it creates with stakeholders and the ability to educate business leaders and others about these principles.

By reading the book and seeing two speeches by John Mackey yesterday, I also learned surprising facts:

– Reading books played a large role in creating John Mackey’s education. He never took a business class while he attended college but has read voraciously over his lifetime.

– John gets that marketing is not a logo like I do. On page 80 he says, “At Whole Foods, we think of marketing as enhancing the quality of our relationship with our customers.” Every company should view it this way.

– Paying vendors on time is critical to success of the ecosystem. He discusses how big companies tend to be the worst offenders here. You’d think that with today’s cash excesses on balance sheets that they’d change this.

– After witnessing John Mackey make two speeches, I can state that Whole Foods appears to be a unique learning organization. There is decentralized and delegated authority at the regional and individual store level to make investments, acquire local products and interact with the local communities as the stores deem appropriate.

– Later in the book, he discusses measurement and the need for change there. I’ll leave you to discover that in detail on your own as you read Conscious Capitalism: Liberating the Heroic Spirit of Business.

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Robyn Benincasa on Building World Class Teams with Essential Leadership Lessons : How Winning Works

Robyn Benincasa -How Winning Works: 8 Essential Leadership Lessons from the Toughest Teams on EarthWhat is true leadership? Keynote speaker Robyn Benincasa leads by example.

Robyn Benincasa dropped me a copy of her newly minted New York Times bestselling book entitled How Winning Works : 8 Essential Leadership Lessons from the Toughest Teams on Earth (Harlequin).

I’m really glad she did! As you know I read  lots and lots of business and leadership books. I read this book over a longer time horizon than usual because it forced me to stop at soul searching checkpoints and reconsider the world around me. Due to this impact, I strongly recommend Robyn’s perspective changing book to everyone!

Roybn’s leadership flexibility keynote message compliments my passion to inspire organizations to reallocate strategic business operations resources to their best uses in the 21st century to the benefit of all customers and stakeholders. Better teamwork serves as one critical piece of a much larger and increasingly uncertain business leadership puzzle. All of the puzzle pieces need to work together well to create successful organizations and Robyn provides a perspective changing critical piece. Robyn was kind enough to answer a few questions and share her wisdom:

Q: So you are a firefighter, an adventure racer, a motivational speaker, the owner of a team building retreat business called World Class Teams Leadership Adventures and a non-profit, The Project Athena Foundation,  which helps survivors of medical setbacks live an adventurous dream as part of their recovery. What led you into these multiple career paths and what inspires you to start new adventures?

Robyn Benincasa: Life has lead me in all kinds of wonderful directions! I love finding strengths and core competences in others as well as in myself. I think our opportunities lie in our unique strengths and acquired knowledge. All of the above were the result of my being deeply compelled by something, discovering I was good at it (or not!), and then adding my own twist to make it meaningful for the people that are a part of it!

Q: When did you first realize you had an entrepreneurial streak and what have these events taught you?

Robyn Benincasa: I was lead into speaking by a friend who saw the parallels between EcoChallenge Adventure Races and the teambuilding styles that would work well in the corporate world. I also had several years of Fortune 500 Pharmaceutical Sales under my belt, so I knew she was right. I just had to think of the best way to deliver the message so that the presentation was less about racing and more about how the teambuilding skills, which we’d learned in the quest for an extremely difficult and distant finish line, could be applied to our ‘real’ lives. I was scared to death in my first few presentations, but it really seemed to resonate with business leaders, and I had some early successes (like having a Starbucks Zone VP in one of my first presentations who then hired me to speak in 8 districts across the US!) that kept me fired up to continue. In 2002, I decided to start my own speaking/teambuilding company, World Class Teams, and we do 45-50 events each year. I love it! But it sure is hard to fit in my required Fire Department hours and racing life into the spaces between. I’ve learned a lot about capitalizing on one’s strengths and outsourcing one’s weaknesses to a great team in order to get to the next level. I definitely practice what I preach. 🙂

Q: What have your experiences around the world taught you about teamwork and how one can best focus on the positive coaching rather than criticism – especially in adverse situations?

Robyn Benincasa: Its imperative on a world class team that there is always an underlying sense of goodwill, loyalty, affection, and mutual respect for one another. If that is undermined, the team will break down quickly. You can deliver the same message to your teammates, but if it comes out at criticism (pointing a finger), you’ve shut down that interpersonal connection. If your message is received as coaching (extending a hand), you’ll get a far better response and a deepened bond. Delivery is a lot of the game in teambuilding!

Q: In your racing career, you had the benefit of pre-event planning and having to make many decisions quickly. Please talk about making decisions effectively and quickly. If you have any general advice on creating urgency in group decision making that will make this interview pretty darn popular me thinks…

Robyn Benincasa: We were always in a race! So the issue of making quick decisions and solving problems in a VERY timely manner was critical. I think competition is an incredible tool to light a fire under a team  ie: if we don’t get this new product to market, our competitors will.  But speed doesn’t always equal effectiveness. We very often found that if we ran/rode/paddled just a liiiiittle bit further, the answers would become more clear about which navigation decisions to make when we were confused. We discovered that going a little longer on the trail and actually finding the right answer, even if finding that answer took us the wrong way for a bit, was almost always a more effective use of our time than standing in the trail for 30 minutes scratching our heads and speculating about what was ahead. If we were stumped for answers, we’d always climb the nearest hill to get a better view or “go ’til we know” more information.  That became a bit of a team mantra when we found ourselves wasting time staring at the maps. 🙂

Q: The lessons of HOW WINNING WORKS appear to be far reaching. How can those lessons be applied to one’s personal life as well as work life in terms of teamwork?

Robyn Benincasa: We’re all in an adventure race every day of our lives in our own way, aren’t we? We’re just not covered with leaches or swimming through crocodile infested rivers, although it may seem that way at times. :). I’ll prove it to you:  if you didn’t realize I was speaking of my extreme endurance sport, wouldn’t you think I was a new hire at your company? “I work with a small team of men and women, and we’re trying to make it through a seemingly endless series of checkpoints, in pursuit of a nearly impossible goal, working against extreme time pressures, in constantly changing conditions, and with the goal of doing it all better than anyone else in the industry”. I rest my case. :). The 8 Essential Elements of Human Synergy that I talk about in How Winning Works brings out the best Teambuilder in all of us, whether that team is with our family, friends, colleagues, clients, husbands, wives, etc. If you deal with people in any capacity, you will benefit from the tips, tricks and skills you’ll find in “How Winning Works”.

Q: How and why did you first get into public speaking? How did your previous sales skills from a previous career help you to position yourself to become successful?

Robyn Benincasa: Oops. Answer this one already, above!

Q: In the section on “We Thinking” you discuss how in the early days of adventure racing teams, they used to pick individual superstars and how those teams didn’t work well. Right now in recruiting, generalists with experience in leading high performing teams are regularly passed over for specialists – often with one dimensional skill sets. What would you tell the leaders of those companies to start to chage that?

Robyn Benincasa: Specialists are fine, as long as they truly embrace the concept that they are one useful cog in a larger wheel. If they are willing to lend their strengths but ALSO recognize that they need to accept help in their areas of weakness and/or let others lead, they should be a solid member of the team. That being said, I’d rather have a true team builder on my team any day versus a specialist if they’re a diva. :). Being a successful teammate isn’t necessarily about what you know—its about what you’re willing to learn, how much you embrace the concept of team synergy, and how willing you are to leave your ego at the start line. It’s the heaviest thing in your pack.

Q: You told one story of regarding motivating a group of students. You were marveling at the attitude change when you were “asking these kids if they thought they could do it instead of forcing them to”. How could you apply that to people overall? (please see page 138)

Robyn Benincasa: Easy! We all embrace that which we help create! Psychology 101. Unfortunately many leaders believe that their role is to “tell others what to do”. But in my opinion the true measure of a leader is how many other leaders they have created. And we create leaders by allowing our teammates to lead based on their strengths; asking for their input and opinion on goals, strategy, and outcomes; inspiring their critical thought, and facilitating their success. Managers are a dime a dozen. Leaders are a rare and wonderful breed.

Q: What started the process of you writing this book and what did you learn about yourself from the process of writing it?

Robyn Benincasa: My friends made me do it! :). Seriously, one of my best pals told me it was time, and she wrote the book proposal. It was sold in a few months and then, ack!, I had to start writing. I did it all on flights to and from keynotes and in the fire station between calls at night. I even created a little team for myself of a coach who gave me homework assignments and chapters to write each day. It helped to have smaller ‘checkpoints’ to reach each week than to think about the daunting finish line hundreds of pages away. See? Adventure Racing even taught me how to write a book. One step, one checkpoint at a time.

I urge everyone to read this book and think about how it could change their everyday interactions.

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Business Author Ro Khanna Discusses His Thought Provoking Book Entrepreneurial Nation

ro khanna, entrepreneurial nation why manufacturing is still key to americasThe nice folks at McGraw-Hill sent me a freshly minted copy of Ro Khanna’s new book Entrepreneurial Nation : Why Manufacturing is Still Key to America’s Future.  As someone who would like to help the CEOs and board of directors transform the sales and marketing of America’s manufacturers to make them into international growth companies, I was excited to see this title as I hope it will bring focus to an important and related issue – where and how corporation resources and employees are allocated for utilization.

In Entrepreneurial Nation, Ro Khanna presents a highly valid yet contrarian book about the potential for USA manufacturing resurgence. Ro advocates reversing certain strategy consulting dogma of the late twentieth century to create this reality. People would be wise to listen to and act on Ro’s message.

The book is a highly unique combination of personal memoir, business and government stories. If the book were to go mainstream, I would  think that the world might discover that his core concept has applications in other areas. Ro was kind enough to answer some questions:

In Chapter 1 you state, “The best American manufacturers consider the intellectual contributions of all of their employees.” Critical and divergent thinkers are critical, but the majority of companies are not yet replacing their leadership ranks with these types of transformational leaders.  What has to change for this to occur at more companies more quickly?

Ro Khanna: We cannot compete with China in a race to the bottom or lower wages.  So, we have to outcompete them by offering more innovative products, finding efficiencies in production, or customizing products to meet consumer’s unique needs.  The best manufacturers recognize this fact, and their leadership creates the culture for employees to make meaningful contributions to a product’s design and the production process.  The result is gain in productivity and also better products.
My hope is the manufacturers that I profile can serve as a model to many of American companies.  They show that empowering employees makes business sense.  A bottom-up culture is perhaps the only way American companies can compete with low-wage labor.  We can’t compete on price. We need to compete by being more creative.

You had the privilege and honor of meeting with one of the most brilliant business people ever, Andy Grove, former CEO of Intel. He argues strongly against outsourcing manufacturing ? Yet it occurs. so who exactly are people listening to for this advice that is contrary to Andy Grove’s great wisdom?

Ro Khanna: Yes, Andy Grove is one of the most brilliant and passionate people I’ve met.  I wish more policy-makers were listening to him about the importance of keeping a manufacturing base for the purpose of innovation.  Some neo-classical economists have argued that we should be indifferent about whether we have a manufacturing base or not.  That may be nice in theory, but what Grove shows is that it cannot work in practice.  Losing manufacturing would mean losing millions of good paying jobs.  It would also hamper our ability to innovate because as Grove shows design and production cannot be separated.  I am disappointed that Grove’s ideas on the importance of manufacturing have not captured more of the attention of the Beltway.  It’s partly why I wrote the book, and Grove arguably is the protagonist of the story.  Washington should listen to people like Andy Grove who have actually implemented successful manufacturing processes and created thousands of jobs here.

I found your research finding that a number of companies were starting to “recognize that machines don’t always improve productivity” to be fascinating as it validates much of my research about white collar management, business strategy and marketing operations. Please discuss how you discovered these fascinating bits of information …

Ro Khanna:  When I would ask manufacturers about why all their jobs could not be automated, they would laugh at the naivete of such a thought.  One of the senior managers at GE explained that individuals were actually more efficient and accurate at tasks such as packaging compared to robots because they were more portable.  Keith Busse of Steel Dynamics also went into considerable detail about the types of jobs in steel manufacturing that he could not see automated any time in the near future.  In general, it’s a gross oversimplification to say that automation will render human workers unnecessary.  A better question is to figure out what types of workers are needed with increasing automation, and what skills they need to develop.

You discussed a manufacturing skills gap in Chapter 7. Recruiting expert Libby Sartain is famous for saying “Hire for attitude, train for skills.” Jeffrey J. Fox asserts companies do not spend enough on training employees. Is there really a skills gap or is there a management problem combined with a lack of vision around how to hire talent that could be trained to do these jobs in a short period of time?

Ro Khanna:  Great question.  You are absolutely correct that companies should invest in training workers.  But, we need to provide them with the incentives to do so.  If we expect companies to take a financial risk and invest in training workers for specific skills —skills that these workers presumably did not acquire through public schooling, college, or vocational education –then companies should receive some tax incentive to do so. We have to make the economics of investing in worker training attractive for a company’s bottom line.  Yes, visionary corporate leaders may get the importance of doing so, and understand that you hire talent not resumes.  But, having incentives can help them justify such  long-term investment decisions to their Board and shareholders. Companies can also partner with trade unions to invest to help cultivate the best workforce.

How did the lecturing gig at Stanford come about?

Ro Khanna: I was speaking at Stanford about how historically there has been a bipartisan vision of supporting American manufacturing.  I talked about Hamilton’s Report on Manufacturing, about Coolidge’s investment in our aviation industry, about Reagan’s investments in our semiconductor industry.  Many of the students had no idea about this aspect of American economic history, and said that they often did not get that perspective in their classes.  Their economics classes were like math classes. So, I thought it would be fun to discuss with students the practical aspects of American economic policy-making, and how that may not easily fit into classical economics or Keynesianism.

What did you personally learn about manufacturing as a result of writing this book?

Ro Khanna: I was inspired about the resilience of American manufacturers I met, and how they went about just doing their work with determination.  I write in the book that, in a deeper sense, the American manufacturers I met speak to who we are as a people. Those talking heads who predict America’s decline need to travel this country and see the hundreds of innovative businesses that are thriving.  There is a reason that the skeptics were wrong when they wrote us off during the early years of the Cold War.  There is a reason they were wrong again when they predicted in the 1980s that Japan and Germany would be the dominant post Cold War economies.  These skeptics always miss the entrepreneurial culture, the hard work, and the sense of optimism that defines America.  After meeting dozens of manufacturers, I am very confident about the future of American manufacturing.  We just need to get the policies right to make their lives easier, and encourage our manufacturers to adapt to the global economy.  That’s why the work you are doing is so important.

Was there anything you learned after the book went to press  that you’d like to share?

Ro Khanna:  Almost every person who has read the book says what they find most interesting is the stories.  I spent a lot of time worrying about taking on the economists such as Jagdish Bhagwati who argues that manufacturing no longer matters.  I spent time arguing for the right policies our nation needs to support manufacturing.  But what seems to touch readers is the concrete stories of Americans who are succeeding in making things.  If the book accomplishes one thing, I hope it shines a spotlight on those Americans who are figuring out how to compete successfully, despite the difficult odds.

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Jeffrey J. Fox on the Future Transformative CEO

Recently, I had the great pleasure of hosting a podcast with Jeffrey J. Fox on Total Picture Radio. Over the years, Jeffrey’s books have been a tremendously positive influence on me.  He did the crisp and clear short book to perfection before it became fashionable and without losing meaning.  As I study the book business and art and craft of making a book myself, I’ve become further impressed by not only his achievements but also his longevity.

I’m excited about his most current book for a variety of reasons:

– Leadership – For a long, long time many have focused on doing the same activities harder, better or with tiny improvement. This book gives permission to do something in a different way.

– Inspiration – Leaders need to be inspired to take that first step to lead change consistently. The first step is often the hardest.

– Permission – Leaders need permission to know that letting go of the past to take another path is OK. All too often this serves as a roadblock.

Why else am I excited about this book? Put simply, this book’s message stimulates demand for the services and abilities I have to offer businesses align their operations and business models to grow revenue, cashflow and market share. It is an exciting time in that regard.

The Board of Directors, Chief Executive Officer and Chief Financial Officer of all companies need to take immediate action to start the long  journey of recreating customer focused organizations that serve a need, in a way that is better than anyone else in their industry, do it in a way that is effective and empowers people across the organization to make incremental, real-time decisions. This is the model and culture that existed at BlackRock during it’s hypergrowth phase and it the the model culture that any organization can strive to build.

There is a long journey ahead, it will be successful for those who take action while others stand still. It is time for the Transformative CEO. I look forward to traveling with those who chose to go on it.



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Book Interview Dan Ariely – The Honest Truth About Dishonesty: How We Lie to Everyone – Especially Ourselves

Dan Ariely - The Honest Truth About Dishonesty: How We Lie to Everyone - Especially Ourselves

New York Times bestselling author Dan Ariely recently released another thought-provoking book, The (Honest) Truth about Dishonesty: How We Lie to Everyone – Especially Ourselves. Dan was kind enough to answer some questions. If you are not familiar with Dan, you should read his bio fully so that you understand the unique life experiences that formed his frame of reference.

Dan’s research on dishonesty is so wide-ranging that one could write several books on the topic! As such, a number of my questions are outside of the content of the book in order to stimulate further conversation.

The book opens with a discussion of Enron and how you first became interested in the subject of dishonesty. In Chicago, where Arthur Andersen was once based, the issue of Arthur Andersen’s demise while McKinsey survived with barely a scratch is still a frequent conversation topic. Did your initial research indicate anything about this specific topic?

As in the case with Enron, the consequences of our actions are frequently unclear; it could just as easily have been McKinsey to take the fall, but there was no indication of who would be responsible at the time that the dirty dealings were taking place. What is clear, however, is that when we make the decision to be dishonest, we are not thinking about consequences. When we see our peers cheating and getting away with it, and even being rewarded for less-than-angelic behavior, it begins to feel like an acceptable modus operandus. In other words, cheating becomes the new moral standard. In our studies on dishonesty, we find that the risk of being caught is largely irrelevant to people’s actions and that they can even ignore them altogether – especially when the consequences are vague and undefined.

You mentioned Marilee Jones, former admissions dean at MIT who encouraged people not to overstate their credentials while misrepresenting her own. Scott Thompson, former CEO of Yahoo!, was recently dismissed for an inaccurate bio. What forces are at play with these kinds of incidents?

With all acts of dishonesty, there is a motivation to benefit from our dishonest actions. On top of that, I suspect that there are all kinds of fuzzy rules about what is acceptable and what is not (and in CVs, particularly, there are no official guidelines dictating the rules). We are incredibly adept at justifying our actions (i.e., if I am working on an academic paper, does it count as a “Working Paper”?), and one justification quickly leads to the next. Once you’ve gotten away with the first dishonest step, escalation comes easily. These rationalizations add up and we wind up sliding down the slippery slope.

What is a person with a tendency to be more honest than average to do in this environment?

I think that that some people may be generally more honest than others, but even the most honest people succumb to the temptation to cheat when they are placed in the right circumstances. To reduce the likelihood that we will fall prey to these forces, we can create rigid and precise personal rules that guide our actions, particularly when we are in situations that tempt us to cheat. If we think we may be more likely to likely to lie to our significant others after a grueling day at the office, we can remind ourselves to be more honest when we walk through the front door in time for dinner. In the professional realm, we can try to reduce (and when feasible, eliminate) conflicts of interest.

With the incidents that you admitted to in the book (MENSA test on airplane, Air India, etc), has anyone perceived you differently or treated you differently due to your writing about them?

I am sure everyone loves me and no one thinks anything bad about me.

How has writing this book changed your behavior in terms of perceiving others and/or your own personal actions?

There is a high personal cost to thinking about dishonesty all the time. I am now excruciatingly aware of the conflicts of interest that my advisors (like doctors, dentists, etc.) face, and find myself being more suspicious of them. This becomes particularly unpleasant when the social aspect of preserving a relationship suffers because of a focus on such conflicts. I know that a treatment being prescribed by my doctor may benefit my doctor more than it benefits me, and my research has forced me to question every piece of advice that may be plagued with a conflict of interest.

I have also created stricter rules for myself in this regard. For example, in an effort to avoid any conflicts of interest in my own life, I refuse to do consulting for example.

I lived in the New York City area (Hoboken, NJ to be completely honest) during the 1990’s when Rudy Giuliani implemented the Broken Windows Theory with the New York City Police. I personally experienced the positive impact it had on lowering crime rates. You stated, “Although the Broken Windows’ Theory has been difficult to prove or refute, its logic is compelling.” Can you please elaborate on your thoughts on this difficulty?

I rely on experiments as a way to support or refute my intuitions about how we think and how the world works. Experiments are useful because, when done right, they can provide insight into our behavior in ways that mere observation simply can’t. There are many factors that could have contributed to the decrease in crime when the Broken Windows Theory was implemented in NYC, and we have no way of knowing whether the intervention was, in fact, the cause. While the regulations could have had an effect on crime rates, it also could have been another incidental change (or expectation) that corresponded with the timing. There could have been demographic shifts, economic changes, improvements in other areas, and so on that may have contributed to the decrease in crime. However, imagine that Giuliani had implemented the Broken Windows Theory randomly in some parts of the city and not in others, and then followed the crime in each area separately. If we saw a decrease in crime where it was implemented, we could reasonably conclude that the Broken Windows Theory was the cause. However, without this type of controlled experiment, there is simply no way to fully understand the root of the shift.

Some of your observations are statistical, while others are purely personal observational, like students promising to not visit non-class related websites during class and then violating the promise. There is a famous quote, “There are three kinds of lies: lies, damned lies and statistics.” In your opinion, is it possible that some disciplines rely too heavily on statistical analysis instead of basic common sense observations causing potential undesirable effects?

There are undeniable flaws in the shifty use of statistics (and they can be easily manipulated when put in the wrong hands), but if I had to choose between observations and experimentation, I would take data over personal observations any day. I do believe in the strength of personal observations, as it gives facts both depth and illustration, but I would be highly concerned about any arguments that are based solely on observations.

Google (GOOG) prices Google Adwords internally and self-reports it for each individual merchant with little or no outside checks and balances. Much has been written about the potential issues of click fraud. Based on processes with no transparent check and balance mechanism, what are the incentives for one to be more honest or dishonest?

I am not an expert on Adwords, but an environment where actions are multiple steps removed from money and are about clicks – and without transparency – seems like danger zone to me.

In your research, did you find anything regarding the detection of dishonesty? Would a Bernie Madoff sized lie typically be harder to detect than a little white lie?

The question regarding the probability of being caught and the size of the potential punishments are very important. We looked so far only at the probability of being caught and found that it has no effect on the amount of dishonesty. Next, I hope to also study the effect of potential punishments.

Some have asserted that the issues of honesty and/or lack of detection of financial inaccuracies have played a role in overpricing events surrounding certain Initial Public Offerings (IPOs) of stock in the Internet era. Could you please share your thoughts and / or research in this area?

Without giving any particular example (and without any explicit research to support my opinion), I suspect that under-regulation of these “inaccuracies” is certainly a factor in the continuance of dishonesty in the workplace, and the social environment where some banks define the acceptable level of behavior for other banks is another contributor. In these situations, workers have lots of room to rationalize, they see their peers taking advantage of the flexibility, and they see no disadvantages to overpricing. There are no losers, and no one gets hurt.

Since sending the final draft of this book to the publisher is there anything you would like to add knowing what you know now?

Since finishing the book, I have had the opportunity to talk to a few “big cheaters” – people who acted very badly, got caught, and wound up in prison for a long time. My discussions with these individuals shows very clearly how good people can get trapped in bad situations and take one step in the wrong direction, rationalize their actions, take another step, and so on. And although they only take one misstep at a time, the trend escalates and at some point they find themselves in terrible situations with no escape.

From an outside perspective, we can easily look at the sequence of actions and say to ourselves that we could have never found ourselves at the end of these paths. But the big cheaters did not start stealing millions or misleading their shareholders. They started with one wrong step, and this is something that under the “right” conditions we could all engage in.

What advice would you give to new nonfiction authors seeking to write successful books?

I’m not sure that I am in any position to give advice, but what works for me is a mix of social science research, stories that link these to our daily realities, and implications for daily life.


I would like to thank Dan Ariely for his time and thoughtful answers. It would be interesting if everyone reading Dan’s book watched the classic movie Used Cars (Rated R) on DVD and used it to discuss the concepts in the book. It is possibly the best movie on trust and honesty issues ever made – back when movies still had a plot. It can create a basis for creating a larger dialogue about the issues in Dan’s book! Go purchase a copy of the book to read now! I look forward to learning more about his important research in this arena.