Big Think

We revere big hits and big ideas (this is Big Think, after all). Along come Linda Kaplan Thaler and Robin Koval with “The Power of Small,” a new book excerpted in Change This as The Small Revolution. Do not confuse this with E.F. Schumacher’s classic “Small Is Beautiful.” That was about people-focused economics. This book is about how small steps can mean big changes in a business or individual, or how small ideas can turn into big dollars.

To that end, they feature on page 8 of their essay a couple of examples of little things that yielded big rewards. One, the story of the person who decorated her children’s Crocs and wound up selling her company to Crocs itself, is really about happenstance - she happened to live near Crocs headquarters. A second one was better:

Million dollar ideas are everywhere. In fact, one just might be licking you in the face. At least that’s what happened to 52-year-old divorcee Carol Gardner. Broke, unemployed, and alone, Gardner entered her local pet store’s annual Christmas card contest in hopes of snagging the grand prize: a year’s supply of dog food. With this humble goal in mind, Gardner set forth on the photo shoot that would change her life. She plopped her 4-month-old English bulldog in the tub, fashioned a fluffy white beard out of bubble bath around her face, and pressed a button. After writing a cheeky caption, Gardner sent her entry off to the pet store, and to her surprise, she won. The card became a hit with all of her friends and family. Suddenly, the light bulb went on: she could create a greeting card business based on Zelda, her mutt of a muse. And so, Zelda Wisdom was born and shortly thereafter, Hallmark came calling, helping to turn her SMALL idea into an international line of greeting cards, gifts, clothing, jewelry, and even books.

Would this idea work in today’s economy, with small consumer spending and capital? It’s hard to say. The authors stress how small makes sense in this economy. And in theory, it does. What it means in practice may blunt the power of their book.

What do you think, BNET?

“Wired to Care” will inspire either murmurs of pleasure or groans of dismay from readers. At its heart, “Wired to Care” offers a management manual for those who think business cannot be run by the numbers. “Quantitative data and facts are no substitute for real-world experience and human connection,” write Dev Patnaik and his word wizard, Peter Mortensen.

The premise is that business people will do better when they take the time to understand others – customers, partners, suppliers, potential acquisition targets. If it sounds a bit like Dale Carnegie, well, it should. Carnegie gets a big hug from Patnaik early on, for noting the obvious, that “it’s just human nature to be interested in people who are interested in you.” What does it mean for business? Patnaik says “If you want to create products and services that other people care about, you should put aside your problems and start caring about other people’s lives.”

Not profits, not sales goals – people’s lives. We read a few pleasing success stories that prove the point. Lou Gerstner saves IBM because, as an ex-customer, he knows what customers really need. Zildjian thrives for 400 years by its ability to constantly shift where its customers want it to go. Nina Planck divines that British consumers really want fresh, locally grown produce, and creates a booming business in farmers’ markets.

Patnaik then invokes science to give the theory something less squishy to stand on. In fact, he waves the neuroscience wand, discussing things like the discovery of mirror neurons by a team of Italian scientists. He also looks at research in cognitive science that shows why it’s hard for us to identify with people who aren’t like us. It’s the gentlest, most palatable science discussion a businessperson could hope for, and it blesses the book with the miraculous secrets brain science reveals. What business can’t use miraculous secrets?

To be fair, Patnaik takes care to point out that the research cited “suggests” things, rather than being definitive. But you would have to be a careful reader not to get swept up by the idea that we are in fact wired to work together, to want to connect. Hence the chapter on the Golden Rule, arguing that business success starts by revising that fabled rule, changing ‘do unto others as you would have them do unto you’ to ‘do unto others as we would have them do unto us.’ (By the way, Patnaik gives us the biological science term for The Golden Rule, the less felicitous ‘reciprocal altruism.’)

It’s a tempting argument, but the book sits under a couple of huge shadows. One is cast by “The Innovator’s Dilemma,” which argues in part that many successful companies run into trouble exactly because they listen too closely to their most important customers, and miss important market shifts. Patnaik does try to show how empathy can overcome “The Innovator’s Dilemma.” He looks at “the car wreck in slow motion” that has been the Big Three automakers over the last several decades, and argues that the automakers gradually turned Michigan into a vast corporate town, the world they wanted to exist, and removed themselves from the world they actually had to compete in. He may be right, but a weakness of the book is that it does not do much to explain how companies can avoid this problem.

Another shadow comes from the obvious problem that we are not wired to care for everyone, and some people seem wired to care for little but themselves. Empathy may have evolutionary advantages, but it also comes with costs, and in business, looking out for others can make a company look less profitable than more selfish rivals.

Still, it is hard not to like “Wired to Care.” The book reads well, and can be finished in a middling-length plane ride. Its business anecdotes are powerful. In fact, the whole thing plays on our mirror neurons. You want to empathize with Patnaik’s nice, smart, caring, successful managers. You want to be like them. Unless, of course, you don’t.

Jim Collins’ famous book now stands as close to a modern management Bible as exists. But Todd Sattersten of 800CEORead looks at a series of recent takedowns on Good to Great and concludes “there is enough evidence now to force us to reconsider Good To Great as the pinnacle management book of this decade.” Sattersten has been a defender of “Good to Great,” and he isn’t abandoning it entirely. In fact, he cites Robert Sutton, who is ambivalent about “Good to Great,” finding it lacking in many ways, but also says “the simple and compelling ideas in Collins’ book are probably mostly right and have probably helped a lot of leaders and managers.”

Collins has a new book coming out in May. Will you buy it?

Title: Wired to Care: How companies prosper when they create widespread empathy
Author: Dev Patnaik (with Peter Mortensen)
Pages: 250
Price: $24.99
Type: Management/science
Theme: How to apply the Golden Rule to ‘us’, not ‘you.’
Who should read: Managers of all stripes.
Big Think Breakdown: This book will make your mirror neurons feel happy, which either proves its point or is chicanery.

Praises: The book is a great plane read, quick and direct. It gives a nice gloss of neuroscience, though it’s about the breeziest science you’re ever going to read (yet it also treats the science carefully). In fact, most of the book is common sense. Its examples are generally effective.

Peeves: Patnaik never really deals with “The Innovator’s Dilemma,” which arises from listening well. The suggestion is that empathy will solve even that problem, but I’m doubtful.

Quote: “Quantitative data and facts are no substitute for real-world experience and human connection.”

For a full review of Wired to Care, read on. (more…)

McKinsey has posted a free video interview with Robert J. Shiller. The prescient Yale macroeconomist (he wrote “Irrational Exuberance”) has co-authored a book with Nobel Laureate George A. Akerlof called “Animal Spirits.” In it, they argue that much of what underpins our economy is psychological. It does not fit into traditional economic models, and if economists and government officials don’t acknowledge that markets are not rational, the economic mess we’re in won’t get any better.

The book, which the New York Times says is the “first to try to rework economic theory for our times,” is not directly trying to be psychotherapy for the economy, but in the interview, Shiller insists that our biggest economic problem is the severe lack of confidence people have about the economy.

The video offers an interesting short introduction to the basic ideas underlying the book. McKinsey also has posted an excerpt from the book (registration required). The excerpt suggests the book accessibly integrates traditional economic theory and behavioral economics.

I just ran across a review of Woody Tasch’s Inquires into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered, which I missed when it came out last year. In fitting fashion, the book is slowly gaining attention. It was featured on NPR in March, and I ran across this thoughtful review late last week.

In it, Rebecca Coffey, who posts and tweets about books and such, lauded Slow Money, though she was unconvinced by the premise — and Tasch — for much of the early part of the book.

“the later essays…are more contemplative, and in them Tasch starts asking himself the kind of hard questions I wanted to ask. He doesn’t have all the answers, but he does show plenty of the sort of cold logic and realistic yet innovative thinking that will be necessary to create them.”

Tasch is certainly innovative; he has for almost two decades been involved in finding new models for social investing, notably as head of the Investors’ Circle, perhaps the preeminent social venture capital group. His book is timely. It’s not clear his idea can be.

Slow money is obviously much less dangerous than the fast money we’ve seen, and there’s a certain common sense to it. The challenge is, of course, speed. It is not quick to get returns and to build on them. It will not be quick to shift our food supplies back to local markets — much good farmland now grows suburban housing developments.The idea of food security is a little hard to focus on in a nation that suffers from an obesity problem.

What do you think? Is Tasch onto an important idea for economic organization?

In its gentle, brief style, 800CEORead has given the Jack Covert seal of approval to two very different recent books, Clay Shirky’s Here Comes Everybody and Don’t Bring it to Work, by Sylvia LaFair.

Shirky brings sociology to life in what Covert calls his big picture business book. Shirky breaks down the reasons that new technologies are affecting group actions, and how those group changes will — and do — affect businesses.

LaFair’s book covers psychology, specifically how your family environment affects your work life. These sorts of books, if well done, can be powerful (Robert Chope’s “Dancing Naked” is a favorite of mine). Often they are not successful, but Covert, who says he is “not usually a fan of books like this,” gives this one a thumbs up. He cites its compelling discussion of the various roles people adopt, how they disrupt work teams, and for its recommendation of ways to get around them.

Looking for a little inspiration for your business? TechCrunch’s Michael Arrington argues you should pick up some science fiction novels. In fact, he says,

my advice for most entrepreneurs is to ignore most business books. Reading too many of them will only confuse you anyway, since so many of them have conflicting advice on how to grow your company, or how to be a better manager, or how to get more done by working less. Most of the really successful people I’ve met certainly don’t read them - they’ve forged their own path to winning.

In fact, many business people don’t read anything, except email. True, too, that business books aren’t usually as much fun as science fiction, or any decent bit of fiction or narrative nonfiction. But let’s take him seriously. He recommends:

• “Dune” by Frank Herbert
• “Foundation Trilogy” by Issac Asimov
• “The Hitchhiker’s Guide to the Galaxy” by Douglas Adams
• “Anathem” by Neal Stephenson
• “The Wasp Factory” by Iain Banks
• “Stranger in a Strange Land” by Robert Heinlein
• Frankenstein by Mary Shelley

I’m all for a good book, and I liked a number of these books as well, though I would not recommend the later Stephenson to casual readers (I haven’t read Banks or Shelley). But he makes weak arguments for why these particular books would be more inspiring and useful to business leaders, even to the high-tech entrepreneurs likely to read his blog, than other good novels, good biographies, the Bible or even particularly good business books.

Frankly, this list reads like Arrington got bored one day and riffed about books he liked in high school and books he liked after law school. This post, however, got plenty of response, including this one from 800CEORead’s Todd Sattersten. Sattersten, not surprisingly, says business books matter too!

Let’s stick with the theme: here are three science fiction authors he should have on there and doesn’t: John Brunner (”Squares of the City” is the one I’ve read, though “Shockwave Rider” is probably more relevant), Vernor Vinge (”Rainbows End” is his most recent, and I posted on its vision for the Future of Business, but “True Names” would matter more to high-tech entrepreneurs), and William Gibson (”Neuromancer,” natch…). Who do you think he’s missing?

The best book for business owners? “Against the Gods: The Remarkable Story of Risk,” by Peter Bernstein.

That’s according to Inc. magazine’s 30 best books for business owners.

The rest of its top five:

The Art of the Start, Guy Kawasaki
The Box, Marc Levinson
Brand New, Nancy F. Koehn
The Dilbert Principle, Scott Adams

The list offers something for any business owner’s taste, from “The Wealth of Nations” to “How to Win Friends and Influence People.” Though seriously, how many people are going to read 30 books and put them to use? Pick three and start from there. As always, when a list like this ignores “Startup” by Jerry Kaplan, I feel compelled to mention it. Look through the list and see whether your favorite is missing.

Will debt go out of style in the wake of the economic crisis? Payback: Debt and the Shadow Side of Wealth, a book about debt published last October, argues that debt is done for.

Payback is not the typical economics book. It’s written by the novelist and poet Margaret Atwood. Despite her humanities background, The New York Review of Books‘ John Gray calls her book “the most probing and thought-stirring commentary on the financial crisis to date.”

By drawing on debt’s role in religion, literature and society, Atwood reminds us that “market economies are not underpinned chiefly by economic theories,” Gray writes. “They rely for their legitimacy and continued functioning on ideas about right and wrong, fairness in society, and orderliness in the world.”

No longer are those ideas quaint, as they were during the boom years, Gray says.

For the obvious objection that her views are simply weak analogies, Gray says “in fact she is advancing the contrary and more interesting claim that economic activities involving borrowing and lending are metaphorical extensions of an underlying human sense of indebtedness. Beliefs about debt are not shadows cast by processes of market exchange. They are presupposed throughout much of human activity. Economic life invokes a sense of order in human affairs, widely dispersed throughout society.”

Atwood argues that debt is shifting from being fashionable to being sinful. If she’s right, it will create huge problems for governments in the U.S., U.K. and elsewhere, because it will make it much harder for them to borrow their way out of trouble. We shall see.