Shocked by the NSA revelations? You don’t know the whole story

A review of Big Data: A Revolution That Will Transform How We Live, Work, and Think, by Viktor Mayer-Schoeneberger and Kenneth Cukier

@@@@ (4 out of 5)

While Edward Snowden bounces from one temporary refuge to another in search of safe harbor from the long arms of the U.S. government, the American public is starting to wake up to the reality of Big Data. The National Security Agency, long one of the pioneers in this burgeoning but little-appreciated field, has been teaching us — or, rather, Snowden, The Guardian, and the Washington Post have been teaching us — about the power that resides in gargantuan masses of data. Now here come Viktor Mayer-Schoeneberger and Kenneth Cukier with a new book that goes far beyond the headlines about espionage and invasion of privacy to give us an eminently readable, well-organized overview of Big Data’s origins, its characteristics, and its potential for both good and evil.

When we think of Big Data, we, or at least most of us, think of computers. However, the authors persuade us that the fundamentals of Big Data were laid down more than a century before the invention of the microprocessor. They point to a legendary American seaman named Matthew Maury. In the middle of the 19th Century, after 16 years of effort, Maury published a book based on 1.2 billion data points gleaned from old ships’ logs stored by the Navy that dramatically reduced the distances (and, hence, the time elapsed) in ocean voyages by both military and commercial ships. Maury used facts derived from decades of mariners’ observations to dispel the myths, legends, superstitions, and rumors that had long caused ocean-voyaging ships to pursue roundabout courses. Not so incidentally, Maury’s work also facilitated the laying of the first transatlantic telegraph cable.

If not the first, this was certainly an early application of Big Data, which the authors describe as follows: “big data refers to things one can do at a large scale that cannot be done at a smaller one, to extract new insights or create new forms of value, in ways that change markets, organizations, the relationship between citizens and governments, and more.” For example, if Maury had had available only a fraction of the old ships’ logs he found in the naval archives, his task would have been impractical, since each individual log doubtless included small errors (and an occasional big one). Only by amassing a huge store of data did those errors cancel out one another.

Now, in the Digital Age, the volumes of data that can be harnessed are, at times, literally astronomical. “Google processes more than 24 petabytes of data per day, a volume that is thousands of times the quantity of all printed material in the U.S. Library of Congress.” AT&T transfers about 30 petabytes of data through its networks each day. Twenty-four or 30 of something doesn’t sound like much, unless you understand that a megabyte is a million bytes, a gigabyte is a billion bytes, a terabyte is 1,000 times the size of a gigabyte, and a petabyte is 1,000 times the size of a terabyte. That’s 1,000,000,000,000,000 bytes. That’s a lot of data! But even that’s only a tiny slice of all the data now stored in the world, “estimated to be around 1,200 exabytes.” And an exabyte (I’m sure you’re dying to know) is the equivalent of 1,000 petabytes. So, 1,200 petabytes could also be stated as 1.2 zettabytes, with a zettabyte equal to 1,000 petabytes, and I’ll bet that not one person in a million has ever heard of a zettabyte before. Had you?

All of which should make clear that when we talk about Big Data today, we’re talking about really, really big numbers — so big, in fact, that almost no matter how messy or inaccurate the data might be, it’s usually possible to draw useful, on-target insights from analyzing it. That’s what’s different about Big Data — and that’s why the phenomenon is bound to change the way we think about the world.

We live in a society obsessed with causality. We often care more about why something happened than about what it was that happened. And in a world where Big Data looms larger and larger all the time, we’ll have to get used to not knowing — or even caring much — why things happen.

“At its core,” write Mayer-Schoeneberger and Cukier, “big data is about predictions. Though it is described as part of the branch of computer science called artificial intelligence, and more specifically, an area called machine learning, this characterization is misleading. Big data is not about trying to ‘teach’ a computer to ‘think’ like humans. Instead, it’s about applying math to huge quantities of data in order to infer probabilities: the likelihood that an email message is spam; that the typed letters ‘teh’ are supposed to be ‘the’; that the trajectory and velocity of a person jaywalking mean he’ll make it across the street in time [so that] the self-driving car need only slow slightly.”

The authors refer to data as “the oil of the information economy,” predicting that, as it flows into all the nooks and crannies of our society, it will bring about “three major shifts of mindset that are interlinked and hence reinforce one another.” First among these is our ever-growing ability to analyze inconceivably large amounts of data and not have to settle for sampling. Second, we’ll come to accept the inevitable messiness in huge stores of data and learn not to insist on precision in reporting. Third, and last, we’ll get used to accepting correlations rather than causality. “The ideal of identifying causal mechanisms is a self-congratulatory illusion; big data overturns this,” the authors assert.

If you want to understand this increasingly important aspect of contemporary life, I suggest you read Big Data.

Viktor Mayer-Schoeneberger and Kenneth Cukier come to the task of writing this book with unbeatable credentials. Mayer-Schoeneberger is Professor of Internet Governance at Oxford University, and Kenneth Cukier is Data Editor at The Economist.

A small publisher that thrives in a declining industry

By Steve Piersanti

Editor’s note: For the past year I’ve been serving on the board of directors of the remarkable little publishing company in San Francisco that will release my new book, The Business Solution to Poverty, in September. Berrett-Koehler publishes nonfiction exclusively, concentrating on business, personal fulfillment, and current affairs. Unlike so many other publishers, the company has been consistently profitable throughout the past decade, outpacing industry standards with rising sales as the book market shrinks. Berrett-Koehler was founded 21 years ago by Steve Piersanti, who continues to serve as editor and president.

In keeping with Piersanti’s inclusive style, more than 100 of the company’s stakeholders—board members, staff, authors, suppliers, service providers, customers, sales partners, and shareholders—as well as several industry experts unconnected to the company gathered on June 18-19, 2013, to participate in Berrett-Koehler’s strategic planning process. (Full disclosure: I also serve on BK’s Strategic Planning Team and helped prepare the event.) What follows is adapted from Steve’s opening remarks for the two-day event. He entitled his presentation “Secrets of Berrett-Koehler’s Success.” 

The article that follows is long (more than 5,000 words) but it’s well worth reading if you want to know what it takes to flourish in an industry—any industry, actually—that is experiencing disruptive change.

1.     Multiple Stakeholder Focus

This is really the foundational concept of Berrett-Koehler. This concept came before our publishing programs, our mission, our books, everything. It goes back to before Berrett-Koehler existed. Before founding BK, I had been president of Jossey-Bass Publishers during its challenging transition from being an independent company to becoming part of the media empire of Robert Maxwell and being placed as a division of Maxwell Communications Corporation. I quickly discovered that our new corporate parent was calling all the shots, and none of the other Jossey-Bass stakeholders really mattered. Not the Jossey-Bass employees who were central to the company’s success; not the authors with whom Jossey-Bass had longstanding relationships; not the suppliers and service providers on whom the company depended. All that really mattered was the call from my boss in New York City.

What was especially troubling about this new balance of power was that there was nothing our new corporate parent was doing that made Jossey-Bass more productive or profitable. Yet, without adding any value, the corporate parent presumed to unilaterally govern our company. It was easy to see that something was deeply wrong with this equation.

And so, when I created Berrett-Koehler’s founding document, “Vision and Plan for a New Publishing Business,” the starting place for my attempt to “rethink the concept of the publishing company” was what I called “Multiple Stakeholder Focus.” “Five ‘stakeholder’ groups – authors, employees, suppliers, owners, and communities (customer, societal, and environmental) – contribute to the success of publishing ventures. Each has a ‘stake’ or investment in the publishing business, whether that investment is time, talent, money, or other resources . . . Berrett-Koehler believes that more balance and equity is needed in the dealings among the stakeholder groups, so that the employees, authors, suppliers, and communities benefit more from the investment each makes and the value each creates for the publishing business. Berrett-Koehler also believes that the relationship among the stakeholder groups needs to be more of a partnership and more fair, open, humane, ethical, and interactive among all of the groups.”

An early manifestation of this focus was that our very first catalog in May 1992 listed many of our stakeholders by name in the catalog. We’ve done this in every catalog since then.

2.     Stewardship

This has gone hand-in-hand with multiple stakeholder focus from the beginning. We were deeply influenced by the ideas in Peter Block’s book Stewardship, which I started working on with Peter right after I began organizing Berrett-Koehler Publishers. In our first catalog I wrote: “If I were to choose one word to describe our vision, it would be ‘stewardship.’ By this I mean a deep sense of responsibility to administer the publishing company for the benefit of all of our ‘stakeholder’ groups.”

Block defines stewardship as “the willingness to be accountable for the well-being of the larger organization by operating in service, rather than in control, of those around us. Stated simply, it is accountability without control or compliance.”

So here was our role as BK managers and employees: to be accountable for serving the interests of all of BK’s stakeholders without needing to do so through control or compliance. Actually, we hope that all BK stakeholders will view themselves as stewards who are accountable for serving the interests of other stakeholders and the whole without needing control or compliance to do so.

3.     Community Engagement and Support

A couple of years into my service as president of Jossey-Bass Publishers I got a call from my boss in New York in which he said that there was a corporate-wide workforce reduction going on and all units were required to cut their headcount by 10 percent. Jossey-Bass had 68 employees, and we were instructed to reduce our headcount to 60 employees. This made no rhyme or reason for Jossey-Bass because we were highly successful and growing rapidly; we had just finished a year in which our sales were up 22 percent and our profits were up 46 percent. Moreover, our business plan of adding 8 more employees had already been approved, and now we were told that we had to instead cut 8 employees. This would have required us to lay off 8 employees, which was unjust and unjustified to me, given the circumstances.

Long story short, our management team fought this edict for two months and I refused to carry out the corporate order. On the afternoon of May 29, 1991, I was fired and told to clean out my desk. But the grapevine worked very quickly and the very next day at my home my phone started ringing with calls from Jossey-Bass authors, suppliers, and service providers who expressed their dismay at this chain of events, their belief in my work and stance, their encouragement to start a new publishing company, and their offers of support. These calls continued for many weeks, as one person who had heard the news would tell another person and encourage that person to contact me, and so on. It was through the support and engagement of all these people that Berrett-Koehler Publishers was born. Listed on the screen are some of the many people who became part of our original community in the first few months when Berrett-Koehler was being organized.

Today there are hundreds of ways that BK engages our communities and receives support from our communities. In the interests of time, I’m going to mention just one. BK authors and other community members are an army of scouts out searching for good authors and good book projects for us and recommending to those authors that BK would be the best publisher for their books. They are the most credible and influential scouts we could possibly have because they know so much about their fields and about BK.

Here’s how bestselling author Peter Block describes this engagement: “I have been a constant source of new authors. When someone comes to me about publishing a book, BK is the first place I send them. I do this partly because I know they will be treated with respect, and they will learn something about the market for their ideas. Most people I refer to BK get refused, but in a useful and sensitive way. So this publisher has a low cost feeder network for new properties, the life blood of the business.”

And here’s how bestselling author Richard Leider describes this engagement. “I have proudly referred dozens of would-be authors to BK over the years. So many that they have offered, partly in jest, to print a BK business card for me! Whether an author landed a contract with BK or not, EVERY single one of them thanked me for the care and insights that they received from BK. Now, that’s walking your talk!”

4.     Publish Books That Make a Difference

When our Editorial Director, Neal Maillet, applied several years ago to work at Berrett-Koehler, he wrote: “As a business and leadership editor whose titles frequently competed for shelf space with BK, I can only express my deep sense of admiration and, to be honest, envy, for the consistent sense of mission and values that BK titles communicate. BK books are for people who are determined to improve themselves and their organizations – not just to rely on corporatespeak or easy answers. BK titles always present a challenge and an invitation – the challenge to do the hard but rewarding work of making positive change, and the invitation to seek beyond self-gratification to community . . . More than anything, a BK book isn’t just a product to be sold. It is invariably part of a message that is consistent across the entire organization.”

It may surprise you but publishing books with a difference-making message was not part of the original concept of Berrett-Koehler. The original concept was more mainstream, which I described as “Leading-edge publications that make new contributions to professional audiences.” But this quickly changed. The books we attracted – and the books that most interested us – were books with big, path-breaking messages about changing individuals, organizations, and the world.

This started with Leadership and the New Science, which was one of the first three books BK published. When a former college advisor of mine sent me Meg Wheatley’s manuscript, I immediately saw that this was different from all the hundreds of books that I had worked on in my previous thirteen-year career as an editor and book marketer. The Library Journal review captured the difference: “Hold onto the top of your head when you read this book . . . Using exciting breakthroughs in biology, chemistry, and especially quantum physics, Wheatley paints a brand-new picture of business management . . . nothing less than an entirely new set of lenses through which to view our organizations.” A newspaper columnist called “The Lazy Literate” expressed the uniqueness of Meg’s work on her next book in a less flattering way: “Yikes! These folks have been eating too many avocados in their hot tubs!” Either way, Leadership and the New Science went on to not only sell nearly 400,000 copies but also to profoundly influence the work of thousands of other book authors, organizational thinkers, and organizational leaders.

In our 20^th Anniversary Celebration a year ago, I cited the case of how a single BK book, Future Search, has made a positive difference for tens of millions of people around the world through the many thousands of future searches in more than 90 countries that have been conducted by the more than 4,000 people who have been trained in the future search methodology.

To give a very current example, the annual meeting this month of the foreign ministers of the thirty-five member countries of the Organization of American States focused on drug problems in North America, Central America, and South America. This meeting was organized around the methodology of Adam Kahane in his new BK book, Transformative Scenario Planning. For the past year the president of Columbia and other country presidents and prime ministers have been working to develop new approaches to drug problems, and they turned to Adam Kahane and his book’s transformative scenario planning methodology to help create and articulate those new approaches.

5.     Eat Our Own Cooking

From the beginning, we have been striving to learn from the books we publish and to practice our book’s ideas in our own company and community.

For example, a central concept in Stewardship is to avoid class systems in management, employment, and compensation practices. One manifestation of class systems is that most organizations have two compensation systems, with the executive compensation system designed to pay those at the top as much as possible and the employee compensation system designed to control costs. Inspired by Stewardship, Berrett-Koehler has just one compensation system for everyone in the company, and it is designed to pay a living wage to everyone, to minimize the disparity between the lowest and highest paid employees, and to direct our company success to raising the whole boat. Accordingly, the difference between my salary and the salary of the lowest paid full-time BK employee has always been less than four to one from the beginning of our company until now. And the same benefit programs and incentive compensation programs apply to everyone.

Another example. Anyone who interacts with Berrett-Koehler soon learns that our culture is all about sharing information openly and freely, so that everyone knows everything. We are open source with authors, suppliers, customers, service partners, and even competitors. And I have always perceived my job to be continuously sharing information in many ways with all of our stakeholder groups. But you may not know the source of this culture and practice. It all started with internalizing the ideas in Chapter 6 of Leadership and the New Science, which is called “The Creative Energy of the Universe – Information.”  Read that chapter, and you’ll see what I mean.

BK has also been influenced by another of the first three books we published: Getting Things Done When You Are Not in Charge. Give up the illusion that you are ever in charge. None of us is ever in control. But we all can get things done when we are not in charge. Of course, this lesson applies to this event. We all can get important things done by acting on ideas that inspire us here even though none of us is in charge of others here.

Finally, here’s an example in the words of our tremendous Director of Subsidiary Rights, Maria Jesus Aguilo: “I was hired as a production and marketing assistant in 1996. At about that time we were publishing Managers As Mentors, so my boss at the time, Pat Anderson, took me aside and told me: I just finished this fantastic book and I really feel like I need to be a good mentor to you. Therefore, I would like us to talk about what it is that you expect from your work here at BK and help you all I can. I told her that I was very happy with my position and learning a lot, but what I would really like to do is rights licensing. A couple of years went by before an opportunity presented itself for me to do rights, but when it did, Pat offered me the position. I learned two things early on in my career at BK: that BK really walks the talk in ways that deeply affect others, and that my managers at BK really listened to my needs and acted upon them. Almost twenty years later, I still derive a lot of inspiration for my work from how the ideas in our books change lives in big and small ways. They changed mine!”

6.     Mission: Creating a World That Works for All

For the first eight years of BK’s history we were in search of a way to express our mission. A mission articulates the fundamental purpose of an organization or enterprise, succinctly describing why it exists. We tried many different ways of expressing our mission. Some are shown on the screen. All had good points, but we were not satisfied with any of them. So we made articulating our mission one of the central objectives of our strategic planning process in the year 2000. “Creating a World That Works for All” emerged from that process and has been our mission ever since.

What has happened over the past thirteen years is that “Creating a World That Works for All” has come to be shorthand for everything that BK community members love about Berrett-Koehler. It has come to signify – all wrapped up in one short memorable phrase – our multiple stakeholder focus, books that make a difference, stewardship, partnership, sustainability, and many other dimensions of BK. It has come to have great meaning for many BK community members, who use it frequently in telling others about BK and expressing their own connection to BK. It has also served to communicate to authors and others a BK point of view, and this point of view is one of our major competitive advantages, as book marketing consultant Todd Sattersten recently pointed out to us.

What does this mission mean in terms of seeking changes in the world, selecting publications that advance these changes, and striving to pursue these changes in our own company and community?

7.     Partnership

Partnership is the way we seek to run Berrett-Koehler and to interact with all of our stakeholder groups – with collaboration, invitation, dialogue, consent, respect, openness, integrity, and mutualism, instead of compulsion, force, violence, or hierarchy.

Partnership is at the heart of the relationship we strive to establish with authors. One manifestation of partnership is our publication agreement, which has many clauses that create a more collaborative relationship between the publisher and authors than is the norm in other companies’ publication agreements.

The fullest manifestation of our partnership with authors is the BK Authors Cooperative, the one-of-a-kind organization where our authors come together to help each other in many big and small ways to increase their success and impact.

We are now seeking to establish a Berrett-Koehler Foundation that would further extend our partnership approach to helping young leaders around the world put into practice systems-changing ideas and methods that help create a world that works for all.

This partnership approach extends to our relationships with our suppliers, service providers, sales partners, and other stakeholders, as I’ll describe in later examples.

8.     Quality and Value Added

All of our systems and approaches are designed to add value and create quality throughout the publishing process. For example, we create high quality in our books by forming longstanding, close, collaborative partnerships with about twenty of the best book production teams around the country, then by sending each new book to the book production team best matched to the unique requirements of that particular book, then by that production team, the author, and the BK staff all working closely together to customize and enhance the book.

Throughout the book publishing world there are constant lamentations about decades of decline in how much editorial guidance and support publishers offer to authors. In contrast, one secret of BK’s success is the extensive editorial guidance and support we provide to authors. We do this in three ways, of which only the third way is common today among other publishers. First, we do a great deal of up-front editorial coaching of authors to improve the core ideas, organization, and framing of books, even before draft manuscripts are written. Second, we send all draft manuscripts to multiple outside reviewers who provide readers’ views of how to improve manuscripts. And third, we arrange top-notch copyediting of manuscripts.

This quality pays off in helping many BK publications to be bestsellers, not just upon publication but for many years following publication. Three BK books have each sold well over one million copies: Confessions of an Economic Hit Man by John Perkins, Eat That Frog! by Brian Tracy, and Leadership and Self-Deception by The Arbinger Institute. In each case BK provided editorial guidance that made the book sell far more copies and have greater impact than otherwise would have been the case. For example, my and our manuscript reviewers’ guidance tremendously strengthened John Perkins’ messages in Confessions of an Economic Hit Man, anticipated the major challenges from critics, and helped Perkins add and clarify materials to address the challenges before the book was published.

9.     Author-Friendly Practices

When Corporate Responsibility Officer magazine gave Berrett-Koehler its award for “Stakeholder Accountability,” it told the following story in the article announcing the award. “At first, Howard Karger says, he couldn’t figure it out . . . A two-time Senior Fulbright Scholar, Karger is the author of multiple books. In late summer of 2004 he found himself working for the first time with Berrett-Koehler . . . [He said] ‘After 25 years of book publishing, I was suspicious . . . I was made to feel like a part of the organization. Almost like staff.’  He grew more wary when the publisher insisted that he travel to San Francisco to meet editorial, marketing, design, and publicity staff. Finally, he realized, ‘these were people doing what they believed in and producing books they were proud of. Democracy for Berrett-Koehler is not just a slogan.’ [The article concludes] In the rough-and-tumble world of book publishing, Berrett-Koehler stands out not only for its treatment of authors, but also for the manner in which it engages employees, business partners, readers, and community.”

This article is describing one of Berrett-Koehler’s many unique practices: launching each book with a full-day Author Day that connects the author to the whole BK staff, gets everyone excited about the book, and creates close collaboration between the author and publisher on all aspects of making books successful.

BK’s author-friendly practices include the following:

• Author-friendly publication agreement
• Collaboration in publication decisions
• Collaboration in cover and interior design
• Extensive sharing of information
• Open access to BK staff on ongoing basis
• Responsiveness to authors’ contacts and requests
• “Author Day” for every author
• “Bill of Rights and Responsibilities for BK Authors”
• and the unique BK Authors Cooperative, an independent nonprofit organization.

10. Integrity and Transparency

These are two elements of partnership. I’ve decided to feature them separately because they pull together so many other dimensions of what makes BK work, as does Jamie and Maren Showkeir’s book Authentic Conversations.

One example of the power of our sharing information openly is our how our partnerships have worked with our two principal book printers, Malloy and Hamilton. There have been times in BK’s history, such as from 2001 to 2003, when we faced severe cash flow shortages and probably could not have kept operating as an independent company without agreement from our printers to extend substantial additional credit to BK even though we were far behind in payments on previous printing jobs. Here is the explanation from Bill Upton, Malloy’s president at the time, for why Malloy continued supporting BK: “One experience that stands out is how open you were with financial information, both current and projected, as you worked with Hamilton and Malloy during the years of loans and past-due payables with us. That openness is what made it possible for both printers to hang in there and continue to support BK.” He continued: “The obvious integrity and commitment of you and the entire staff was a very important factor. We’ve had experiences with other publishers in the past where they expanded their trade credit by working with additional suppliers – our old invoices were left unpaid while the publisher worked with new suppliers on a cash terms basis. We’ve also had publishers simply throw in the towel. Those scenarios were unimaginable with BK.” Fortunately, this trust paid off both for our printers and for BK. For some years BK has been, in Bill Upton’s words, “a model of correct, prompt, complete, problem-free bill paying.”

Our focus on doing what we say we will do, not overpromising, creating systems to fulfill promises, and holding ourselves accountable is especially noteworthy in the area of sales and marketing. Publishers are notorious for making lofty sales and marketing promises in their early discussions with authors and then not fulfilling their promises. Berrett-Koehler has just the opposite approach, which begins with being straight with authors about “The 10 Awful Truths about Book Publishing” [which can be accessed by clicking on its title here]. The rubber really hits the road with the extensive systems that our Sales and Marketing Department has set up (1) to explicitly tell authors all the things we will and will not be doing to market their books, (2) to follow through on everything that we said we would do, and (3) to report back to authors that we have done what we said we would do.

We strive to create systems of integrity and transparency in all areas of the company. For example, our book production systems are set up to enable us to publish books almost always on the schedule laid out at the beginning of the production process.

All of this is extremely challenging in an industry as complex as book publishing. BK Editorial Director Neal Maillet reflects this challenge when he reports, “I once asked the manager of a publisher’s royalty department how she kept track of all the tricky contractual exceptions editors negotiated and was told ‘We don’t – we just use the boilerplate and apologize profusely when an author or agent catches the mistake.’”

BK’s approach is to only commit to things that we can deliver, to create systems that enable us to actually fulfill our commitments, and to share information with our stakeholders that show how we have performed what we promised to do.

11.  Sustainability

Here I am focusing on two dimensions of sustainability. The first dimension is the thrust of many of our books, such as those pictured here, to establish lifestyles, institutions, economic systems, environmental systems, and other ways of living and interacting that are sustainable for generations going forward. The second dimension is establishing strategies and practices that make Berrett-Koehler Publishers sustainable both in terms of being able to stay in business and in terms of the environmental and social responsibility of our own business practices.

One embodiment of our commitment to sustainability is that Berrett-Koehler is a Certified B Corporation. B Corporations meet rigorous standards of social and environmental performance. To qualify as a B Corp, Berrett-Koehler had to complete and pass a 230-question “Impact Assessment” that examined BK’s performance on measures of corporate accountability, transparency, compensation, benefits, employee training, worker environment, worker ownership, social benefit, community service, local involvement, diversity, job creation, and environmental practices.

12.  Multichannel Marketing and Sales

This has been part of BK’s formula from the very beginning. Our June 1991 “Vision and Plan for a New Publishing Business” listed 17 sales and marketing channels for the company. Today we still are active in all of the original 17 channels and have added many other channels, such as online booksellers and social media, which did not exist in 1991.

Our multichannel approach is good for authors and book sales because it increases each publication’s chance to succeed in the marketplace by giving each publication many diverse channels in which to find a market. For example, some books do poorly in bookstore sales but do well in special sales or foreign language translations.

Of course most publishers market through multiple channels. But most do not market as extensively in as many different channels as does BK.

The downside of BK’s approach is that it is very expensive. Berrett-Koehler devotes over 20 percent of our revenues to sales and marketing, which is far above publishing industry averages.

13.  Independence

In an age of corporate consolidation, BK has remained fiercely independent. Berrett-Koehler is owned by our stakeholders, including our employees, authors, customers, suppliers, service providers, and sales partners.

This independence allows us to chart our own course and to not have our unique values and practices submerged in a giant corporate bureaucracy. And it allows us to own our own future and to not be governed by short-term stock market pressures and shifting corporate edicts.

14.  Continuity, Constancy, Fidelity

One of BK’s great strengths has been our ability to keep good people and the resulting continuity of our staff. 18 of our 25 employees have been with BK for 5 or more years. And our average staff tenure with BK is 10 years. Love ‘Em or Lose ‘Em has not only been a bestselling BK book, it has also been a guide to our company.

Another secret to our success has been the constancy of our purpose, vision, and distinctive practices over many years. Our list of 11 “Guiding Concepts for Berrett-Koehler Publishers” was written 21 years ago. All of these “Guiding Concepts” are still our touchstones today – such as multiple stakeholder focus and environmental consciousness and action. This constancy increases our ability to move Full Steam Ahead!, as the title of Jesse Stoner and Ken Blanchard’s book proclaims.

When people ask me what about Berrett-Koehler I am most proud about, my answer is our fidelity to our mission and values during the many challenging periods we have had over the years. For example, when the great recession hit in 2008 and 2009, like most publishing companies we experienced a substantial revenue decline. However, we decided to respond to this crisis by doing more of what BK stands for – under the headings of Integrity, Mission and Strategies, Participation, and Efficiency and Effectiveness – rather than compromising our mission and values. Whereas Publishers Weekly reported that approximately two thirds of publishing companies laid off employees and cut back their publishing programs during this period, Berrett-Koehler did neither. Instead, we shared full information with all employees, and the employees collectively decided to take a 10 percent across-the-board salary reduction (except for the lowest-paid employees, who received smaller reductions), which the employees then lifted after revenues recovered. My hope is that our identity as a company and community is so deeply imprinted that it will be our destiny and carry us through the many other challenging periods that are surely yet to come.

15.  Continuing Innovation

The previous 14 secrets may make it sound like BK is in good shape. However, it is clear that we cannot stand still. Everything is going through continuous change around us in our business and publishing environments. Unless we are leaders ourselves in making the future, unless we do new and surprising things to leapfrog over obstacles that have constrained us in the past, and unless we continue developing new ways of doing business that bring greater value to our customers and other stakeholders, Berrett-Koehler will not survive over the long term.

Larry Ackerman, author of Identity Is Destiny, recently observed that BK is now 21 years old and that this age can be viewed as having reached “adulthood.” I think that is a good image for where we are now. At 21, it is time to turn more of one’s focus outward to contributing to a larger work and to making a bigger difference in the world through service to others. This can be true of Berrett-Koehler as well and this event can help BK reach out in new and better ways to make a greater positive difference in the world.

As we seek to innovate in new ways, it is my prayer that we will continue to be guided by the secrets named in this address. I believe that there is great power within these ideas and that they will make our innovations better and more likely to succeed. We can do more to create a world that works for all. Thank you.

Delivering healthcare to billions of the world’s poor

A review of Pharmacy on a Bicycle: Innovative Solutions for Global Health and Poverty, by Eric C. Bing and Marc J. Epstein

@@@@ (4 out of 5)

Despite the widespread conviction that the state of the world is deplorable and getting worse by the day, the human race has made measurable, even dramatic progress in some important ways. The collective state of our health is the most telling example. In part because of the eradication of smallpox, the near elimination of polio, and the significant recent progress on HIV/AIDS, humanity in general is living longer and healthier lives. Average life expectancy at birth in India around 1950 was 38 years; today it is 65. In China, it was 41; today it is 77. Over the same period, average life expectancy in the United States has risen from 65 to approximately 80. Numbers can be misleading, but these tell a compelling story.

Building on this amazing success story, major institutions — the United Nations, the U.S. Government, and the Bill and Melinda Gates Foundation, for example — have invested billions of dollars in recent years, targeting specific diseases, promoting the use of vaccines, and building public health infrastructure in developing nations. All these admirable efforts promise to continue the favorable trend in healthcare that has unfolded over the last half-century.

However, there is a hidden dimension in this picture. As Eric Bing and Marc Epstein explain in Pharmacy on a Bicycle, billions of poor people living in rural areas all too frequently fail to gain the benefit of these advances in healthcare. It’s fashionable to look on the world today from the perspective of the cities, but in spite of the massive migration of the last several decades, nearly half (49%) of the world’s population still resides in rural areas. Great numbers of these people live far from transportation hubs, often hours or even days of walking from the nearest road. It’s to these billions of people, nearly all of them desperately poor by American or European standards, that Bing and Epstein turn their attention in their illuminating little book.

Pharmacy on a Bicycle rests on a single, fundamental premise: “Most poor outcomes [in healthcare] are caused not by lack of effective medicines or medical know-how. The ability to prevent and treat many of these diseases inexpensively has been available for a very long time. But getting the right remedies to the right people in the locations where they are needed, in a way they will use them, and at a cost they can afford is continually a challenge. This is not a scientific problem. It’s a business challenge.”

Bing and Epstein argue that humankind has never before been in such a good position to meet this challenge. The costs of many widely-used drugs have fallen dramatically, and scientists have greatly simplified the treatment of many diseases by combining multiple drugs into single capsules or tablets. Extremely cheap diagnostic techniques that provide nearly instant assessments are now available. Through telemedicine, a single well-trained physician can now offer her or his expertise to much larger numbers of patients. The widespread use of clinical checklists and the application of franchising to the healthcare industry have both improved access and lowered costs. And new business models, successfully piloted in many countries, using bicycles, motorcycles, and trained village-level representatives, make it possible for healthcare agencies and for-profit companies to overcome the “last mile problem” that has traditionally limited most of the benefits of the market economy to population centers. “We are now at a tipping point to make lasting global health impacts,” the authors write.

One of the most promising recent developments is the now near-universal access to cell phones; by next year, the number of mobile phones is expected to be greater than the world’s population. “Mobile phones are now being used for patient education and awareness, treatment compliance, health care worker training, data collection, disease and epidemic outbreak tracking, and diagnostic and treatment support.”

Pharmacy on a Bicycle is intended to spark much wider adaptation of these advances by making them more widely known. The book presents a seven-point implementation model called IMPACTS, which encompasses innovation and entrepreneurship, maximizing efficiency and effectiveness, coordinating with partners, accountability, creating demand, task shifting (e.g., empowering nurses to take on some doctors’ responsibilities), and scaling. The book includes an abundance of excellent examples that bring these deadly-sounding prescriptions to life.

Eric Bing is an M.D. who also possesses a Ph.D. in epidemiology and an MBA. He’s the director of global health at the George W. Bush Institute at Southern Methodist University. His co-author, Marc Epstein, is an eminent and much-published professor of management at Rice University in Houston whose previous teaching posts were at the Harvard and Stanford business schools and INSEAD (European Institute of Business Administration).

 

If you own stock, invest in companies, or are starting a new business, read this book!

A review of The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, by Lynn Stout

@@@@@ (5 out of 5)

If you so much as skim the business pages in a newspaper, there’s little doubt you’ve heard it said or seen it written that corporate officers and directors are required by law to maximize shareholder value and that they’re subject to lawsuits if their decisions favor any other stakeholder such as employees, customers, or suppliers over profit. The well-entrenched view that shareholders are paramount is widely regarded as the cornerstone of contemporary business law — and it’s flatly untrue.

In The Shareholder Value Myth, business law professor Lynn Stout proves this point, citing chapter and verse in court decisions going back more than a century. “So long as a board can claim its members honestly believe that what they’re doing is best for ‘the corporation in the long run,’ courts will not interfere with a disinterested board’s decisions — even decisions that reduce share price today.” Having laid the legal groundwork, Stout then proceeds to explain how this mistaken view of shareholder primacy is bad for business.

“Put bluntly,” she writes, “conventional shareholder value thinking is a mistake for most firms — and a big mistake at that. Shareholder value thinking causes corporate managers to focus myopically on short-term earnings reports at the expense of  long-term performance; discourages investment and innovation; harms employees, customers, and communities; and causes companies to indulge in reckless, sociopathic, and socially irresponsible behaviors.” Among the examples Stout cites is the Gulf oil spill, caused by excessive cost-cutting on the part of BP. “In trying to save $1 million a day by skimping on safety procedures at the Macondo well, BP cost its shareholders alone a hundred thousand times more, nearly $100 billion.” Q.E.D.

Stout deftly demonstrates that this irrational focus on shareholder value has been harmful in other ways as well. For example, “[b]etween 1997 and 2008, the number of companies listed on U.S. exchanges declined from 8,823 to only 5,401.” Of several factors that help explain this trend, shareholder primacy clearly stands out. Smart people know that there’s more to success in business than a rising stock price.

The origin of this misguided notion lies in the thinking of the so-called Chicago School of free-market economists best known through the work of the late Nobel Prize-winner Milton Friedman. Friedman had written a book in the 1960s that highlighted the idea, but it was his essay in 1970 in the New York Times Magazine that gained wide attention. There, he “argued that because shareholders ‘own’ the corporation, the only ‘social responsibility of business is to increase its profits.'” Stout argues that “shareholders do not, and cannot, own corporations . . . Corporations are independent legal entities that own themselves, just as human beings own themselves.” Shareholders merely own shares of stock that constitute a contract with the corporation to receive certain financial benefits.

They’re not in charge of the show, either. Some lawyers and economists writing after Friedman contended that  shareholders appoint the directors as their agents. This too, Stout contends, is mistaken. She devotes two chapters to prove that this description of shareholders as principals “mischaracterizes the actual legal and economic relationships among shareholders, directors, and executives in public companies . . . Moreover,” Stout writes, this assumes “that shareholders’ interests [are] purely financial,” when in fact shareholders may have any one of a great many different reasons for buying and holding shares in a company.

A fair portion of The Shareholder Value Myth is focused on analyzing the impact of several popular measures promoted by shareholder advocates, the SEC, and Congress over the past two decades: “de-staggering” boards, so that all directors may be removed at once; giving shareholders the right to circulate proxies to all other shareholders on issues of interest; and equity-based compensation. Ask yourself: How often have shareholders removed the entire membership of a corporate board with a single vote? And how often have shareholders of a public company — other than corporate raiders or hedge funds — successfully obtained proxies to overturn a corporate board policy? You can guess the answer to those questions. But the very worst impact of these efforts to strengthen the shareholders’ hand has come from the popularity of equity-based compensation. “In 1991, just before Congress amended the tax code to encourage stock performance-based pay, the average CEO of a large public company received compensation approximately 140 times that of the average employee. By 2003, the ratio was approximately 500 times.” That policy isn’t the only factor to account for this dramatic rise in the ratio, but it’s certainly a major one. And it only seems to work on the upside. How many times have you read about board decisions to lower a CEO’s pay in proportion to the decline in its stock price the past year? You probably know the answer to that one, too. 

The Shareholder Value Myth is an important contribution to a growing body of thought that seeks to re-conceive the role of the corporation in a more expansive manner commensurate with its growing importance in contemporary society.

Heads up: My new book will be in stores Sept. 9

My co-author, Paul Polak, and I are now putting the final touches on the manuscript, and it’s got months of design and production ahead. But the new book will be published this year by Berrett-Koehler, the San Francisco firm that brought out an earlier book of mine, Values-Driven Business: How to Change the World, Make Money, and Have Fun (co-authored with Ben Cohen of Ben & Jerry’s fame). The official publication date for the new book is Sept. 9.

Its title is The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers.

It’s premature to tell you much about the book, but I thought you might like to know a little about my co-author, Dr. Paul Polak.

Paul Polak is widely regarded as the father of market-centered approaches to development. He started harnessing the energy of the marketplace 30 years ago when IDE, the organization he founded, sold one-and-a-half million treadle pumps to small farmers in Bangladesh, increasing their net income by more than $150 million a year. Over the past 30 years, he has had long conversations with more than 3,000 small farmers who live on less than $1 a day and walked with them through their fields. IDE has now enabled 20 million of the world’s poorest people to move out of poverty by selling them radically affordable irrigation tools made available through thousands of small village manufacturers, dealers, and well drillers, and opening smallholder access to markets where they could sell their crops at a profit.

Paul’s earlier book, Out of Poverty: What Works When Traditional Approaches Fail, has been widely used as a basic text on practical solutions to rural poverty. He is the founder and CEO of Windhorse International and co-founder and board chairman of Spring Health India, for-profit companies with the mission of bringing safe drinking water to 100 million poor rural customers in the world. Paul is the prime mover for creating and implementing the four social impact multinationals in this book, each designed to transform the lives of 100 million $2/day customers and generate annual sales of $10 billion.

Prior to founding Windhorse, in 2008 Paul established D-Rev, a nonprofit that seeks “to create a design revolution by enlisting the best designers in the world to develop products and ideas that will benefit the 90 percent of the people on earth who are poor, in order to help them earn their way out of poverty. Paul’s vision inspired Smithsonian’s Cooper Hewitt travelling exhibit, “Design for the Other 90 percent.” He was named by The Atlantic as one of the world’s 27 “Brave Thinkers” along with Steve Jobs and Barack Obama. He has also received the Ernst and Young Entrepreneur of the Year award and the Scientific American “Top 50” award for agricultural policy.

Paul graduated from medical school in 1958, worked for 23 years as a psychiatrist, creating innovative models of community treatment, and at various points in his career also worked as a farmer and a hands-on investor in oil and gas, real estate, and equipment leasing. He and his wife Agnes have been happily married for 53 years, and have three grown daughters. At the age of 79, he still puts in an 80-hour work week and loves what he does.

Set up your own religion, and make a billion dollars

A review of Inside Scientology: The Story of America’s Most Secretive Religion, by Janet Reitman @@@@@ (5 out of 5)

When L. Ron Hubbard died in 1986 at the age of 74, one of the world most confounding and controversial public figures passed from the scene — though not from memory.

• Borrowing a 19^th-century approach to mental therapy from psychiatrists Sigmund Freud, Josef Breuer, and others, as the basis for his own self-help method, Hubbard had become psychiatry’s most prominent critic for its dismissal of the therapeutic techniques he claimed could be administered by anyone without the benefit of training in medicine or psychology.
• Having declared in 1945 when flat broke that he would found his own religion, by the time of his death he had built a worldwide “church” through which he amassed an estate of $400 million—$826 million in 2012 dollars.
• Never having graduated from college, he styled himself as an explorer, a nuclear physicist, and a philosopher with advanced degrees to match, all the figments of his fertile imagination.
• A second-rate writer of pulp adventure fiction in the 1930s and of science fiction in the 1940s and 50s, he attained a ranking on the New York Times bestseller list only through his self-help book, Dianetics, published when Hubbard was approaching age 40.
• Upon his passing, Hubbard had achieved a semblance of immortality, elevated to spiritual sainthood by millions of followers around the world who treated his every written word and every utterance as unchallengeable truth.

Adding to the irony of Hubbard’s existence, this champion of mental health and outspoken opponent of psychiatry spent his last several years, by all accounts, an abusive and paranoiac lunatic whose erratic behavior was moderated only by the very anti-psychotic drugs he had crusaded against for more than three decades.

Thus ended the life of the founder of Scientology.

Since Hubbard had failed to name a successor, a vicious struggle for power in the “church” ensued upon his death. In hindsight, however, the victor in this struggle had been foreordained. Beginning four years earlier, once Hubbard had gone into seclusion, his whereabouts a secret from all but a handful of his staff, a 19-year-old named David Miscavige had begun forcing out all those in Scientology’s leadership who stood in his way. The process resembled nothing so much as the purges launched by Josef Stalin in the 1920s following the death of Lenin. By 1988, the 25-year-old Miscavige stood at the pinnacle, the undisputed leader.

To judge from Janet Reitman’s exhaustively researched and detailed reporting in Inside Scientology, Miscavige has run the multi-faceted Scientology establishment for nearly a quarter-century now with a style that is at once obsessive, rigid, humorless, unforgiving, and dedicated almost exclusively to the pursuit of profit. He appears to exhibit virtually none of L. Ron Hubbard’s good qualities—irresistible charm, a forgiving nature, managerial ability, and a lively imagination—and all of his bad ones, including extreme litigiousness and a tendency to strike out at those closest to him. In recent years, Reitman reports, Miscavige has even demonstrated a clear pattern of severe paranoia much like what drove Hubbard into seclusion, sometimes attacking aides and senior executives with physical violence, at other times submitting them (or anyone else who so much as utters a hint of criticism) to humiliating punishment.

Just as he had engineered the “first Exodus” from Scientology on his drive to power in the 1980s, Miscavige’s extreme behavior led to a second Exodus in the middle of the last decade, driving away most of the senior executives who had managed the far-flung business, in some cases for decades.

As you’re no doubt aware, the Internal Revenue Service classified the Church of Scientology as a religion, exempting all its innumerable affiliates and subsidiaries from the payment of Federal taxes and allowing them to receive tax-deductible donations. However, what you may not be aware—I certainly wasn’t, before reading Reitman’s book—is that the agreement signed by the “church” and the IRS in 1993 came about because the then-Director of Internal Revenue cried chicken in the face of literally thousands of lawsuits filed by the Scientology establishment under Miscavige’s direction and its constant use of private detectives to harass and apparently even blackmail IRS agents and staff.

Janet Reitman’s book began as an article in Rolling Stone magazine but took years to complete. It’s a stellar example of the reporter’s craft, balanced and objective. Yes, balanced: Reitman quotes Scientology officials and long-time faithful adherents at length — and even in the book’s closing thoughts — demonstrating that for some, perhaps a great many, who give over their lives to Hubbard’s “technology” (as he styled it), life can be rewarding. However, there are far too many former Scientologists who have spoken out, especially in recent years, blasting Miscavige’s administration if not the core ideas of Scientology itself, to think of this now six-decade-old movement as anything other than a diversified, multinational business built by a movement that operates precisely like the cult it is so often accused of being.

Like McDonald’s, which earns more revenue from its real estate than from Big Macs and Chicken Nuggets, the Church of Scientology now derives the lion’s share of its income from its real estate holdings around the world. Other businesses contribute additional funds. And yet the “church” itself seemingly continues to gush money, even as the faith is in decline: one of its centers alone, in Clearwater, Florida, the movement’s spiritual headquarters, reportedly was grossing more than $1 million a week as recently as a decade ago. If that’s the case, and hundreds of other Scientology centers in cities and towns around the world remain in business only because they’re profitable (the yardstick the “church” applies), I can’t begin to imagine how large is the asset base ruled today by David Miscavige. If he began 24 years ago with the equivalent of the $826 million that Hubbard left to the movement, surely the “church” today possesses wealth in the billions.

A mind-boggling tale: How America rearmed to win World War II

A review of Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman

@@@@@ (5 out of 5)

Since I was born six months before the U.S. entry into World War II, I grew up familiar with a long list of names — little-heard now, more than half a century later — that were associated with the U.S. role in the war that seized hold of Planet Earth for a half-dozen years and set America’s course as a superpower for the balance of the 20th Century. Jimmy Doolittle, Henry Kaiser, George Marshall, Hap Arnold, Curtis LeMay, Paul Tibbetts, and a host of others — every one of whom figures in the epic story so skillfully told in Freedom’s Forge.

As the book’s subtitle suggests, Freedom’s Forge focuses on the role that America’s business community, and especially Big Business, played in the monumental effort that resulted in the unconditional surrender of Germany and Japan just months apart in 1945.  Two extraordinary men — William S. Knudsen and Henry Kaiser — are the stars of this story, business impresarios who marshaled the stupendous numbers of men and women and the unprecedented mountains of raw materials that supplied the U.S. and its Allies with the weapons of war.

Nothing since — not the Apollo moon landings, not the war in Vietnam, not even America’s protracted wars in Afghanistan and the Middle East — has come even remotely close to the magnitude of World War II. Over the five-year period from July 1940, when the U.S. began to rearm, until August 1945, when Japan surrendered, “America’s shipyards had launched 141 aircraft carriers, eight battleships, 807 cruisers, destroyers, and destroyer escorts, 203 submarines, and . . . almost 52 million tons of merchant shipping. Its factories turned out 88,410 tanks and self-propelled guns, 257,000 artillery pieces, 2.4 million trucks, 2.6 million machine guns — and 41 billion rounds of ammunition. As for aircraft, the United States had produced 324,750, averaging 170 a day since 1942.”

Can the human mind today even comprehend what must have been involved in manufacturing 300,000 airplanes and 100 aircraft carriers?

This staggering output of weapons came as a result of a profound transformation of the American economy, engineered in significant part by Bill Knudsen and Henry Kaiser. The two could hardly have been more different, and they didn’t like each other. Knudsen was a modest and unassuming Danish immigrant who worked closely with Henry Ford on the Model T and later built and ran General Motors into the world’s largest industrial corporation, dwarfing Ford’s output. Kaiser, a West Coast construction magnate who was the son of German immigrants, was flashy, outgoing, and immoderately persuasive — a model of self-promotion. Together with a host of others in and out of government, these two men led the conversion of the U.S. economy to unparalleled heights as the “arsenal of freedom.” Nonetheless, “[i]n 1945 Americans ate more meat, bought more shoes and gasoline, and used more electricity than they had before Hitler invaded France.”

Though I thoroughly enjoyed reading Freedom’s Forge, there was one discordant note. Author Arthur Herman, a free-market conservative who wrote this book as a visiting scholar at the right-wing American Enterprise Institute, advanced a political message throughout. That message could be summed up as “FDR, the New Deal, labor unions — bad. Business, businessmen, military leaders — good.” He could hardly have been more blatant. But the man writes well, and he did a stellar job of telling this unimaginably complex story between the covers of a single volume.

In the conclusion, Herman quotes Josef Stalin when he first met at Tehran with Roosevelt and Churchill in 1943: he “raised his glass in a toast ‘to American production, without which this war would have been lost.'” There could be no higher praise for capitalism, coming as it did from the dictator of the Communist Soviet Union.

A brilliant new marketing book destined to become a classic

A review of Winning the Story Wars: Why Those Who Live — and Tell — the Best Stories Will Rule the Future, by Jonah Sachs

@@@@@ (5 out of 5)

If you’ve never seen the wildly popular online videos The Story of Stuff and The Meatrix, do yourself a favor and check them out. These two outstanding examples of the marketer’s craft embody the insights revealed in Jonah Sachs’ outstanding new book, Winning the Story Wars.

For years now, everyone involved in marketing, fundraising, communications, social media, or any related field has been intensely aware that the key to successful messaging is a story. In this beautifully written book, Jonah Sachs explains why that is so, what’s needed for a successful story, and how to construct one, step by step.

As Sachs writes, “the oral tradition that dominated human experience for all but the last few hundred years is returning with a vengeance. It’s a monumental, epoch-making, totally unforeseen turn of events.” If these statements strike you as hyperbolic, consider this: the nearly universal distrust of institutional authority (whether governmental, corporate, or religious) that has become a distinguishing feature of our society over the past five decades, combined with the atomization of our information sources (500 TV channels, one billion Facebook users, 500 million Tweeters), makes it absolutely essential that anyone who needs to deliver a message to a very large number of people must couch it in the form of a story with broad appeal across all the lines that divide us (and define us). As Sachs explains, “Great brands and campaigns are sensitive to the preferences of different types of audiences, but the core stories and the values they represent can be appreciated by anyone. Universality is the opposite of insincerity.”

Winning the Story Wars is, simultaneously, an honest and occasionally embarrassing tale of Sachs’ own halting progress toward understanding the craft of story-making, an exploration of the cultural and anthropological roots of the archetypal stories that live on in our consciousness, and, ultimately, a lucid, practical guidebook to building your own stories.

Sachs has done his homework. He has read Joseph Campbell and Carl Jung as well as the Bible, delved deeply into the history of marketing and advertising, and explored contemporary advertising, as exemplified by the Marlboro Man, the rule-breaking 1960s campaign for the Volkswagen Beetle (“Think Small.”), and Apple’s more recent “1984” and “Think Different” campaigns. He manages to tie together all these disparate sources and examples within the framework of an entirelly original analysis. Along the way, Sachs reveals how three men — Presidents Calvin Coolidge and Herbert Hoover, and “the father of public relations,” Joseph Bernays — transformed the American economy by shifting  public consciousness from the values of our Puritan heritage to the dictates of the marketplace, enshrining consumerism as the dominant feature in our ethos. It’s truly brilliant.

Sachs bases his analysis on ‘the ‘three commandments’ laid out in 1895 by marketing’s first great storyteller, John Powers: Tell the Truth, Be Interesting, and Live the Truth.” Sachs emphasizes the importance of avoiding “Marketing’s five deadly sins: vanity, authority, insincerity, puffery, and gimmickry.”

If you’re engaged in marketing, advertising, fundraising, or anything even reasonably related to them, you must read this book.

Social entrepreneurship: what it is, how it works, and where it’s going

A review of Social Entrepreneurship: What Everyone Needs to Know, by David Bornstein and Susan Davis

@@@@@ (5 out of 5)

After three decades of increasingly widespread public attention, a surprisingly large number of commentators in the field of social entrepreneurship continue to argue about the most basic question of all: What is a social enterprise, and what isn’t? In this superb little book, David Bornstein and Susan Davis straightforwardly put this question to rest: “Social entrepreneurship is a process by which citizens build or transform institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses, and corruption, in order to make life better for many.” So much for all those deconstructionists who contend that a social enterprise must never turn a profit, or must always turn a profit, or must address some sorts of problems but not others!

As an introduction to the field, Social Entrepreneurship is unmatched.

Most books on social entrepreneurship feature case studies or vignettes starring some of the field’s most innovative and successful individuals. This was the case with an earlier book of Bornstein’s, How to Change the World, which is widely (and rightfully) regarded as “the bible” of the field. By contrast, the three short chapters that constitute Social Entrepreneurship ask and answer the most fundamental questions that any reader unfamiliar with the pursuit of social change might ask, first clarifying the definition of social entrepreneurship, then examining the practical challenges practitioners face, and finally “Envisioning an Innovating Society.” In that third chapter, Bornstein and Davis discuss how government, academia, business, philanthropy, and the news media might contribute to fashioning the “everyone a changemaker” world posited by Ashoka’s Bill Drayton.

As the authors point out, “Social entrepreneurs have always existed. But in the past they were called visionaries, humanitarians, philanthropists, reformers, saints, or simply great leaders. Attention was paid to their courage, compassion, and vision but rarely to the practical aspects of their accomplishments. Thus, people may know about the moral teachings of St. Francis but not about how the Franciscans became the fastest growing religious order of its day. Children learn that Florence Nightingale ministered to wounded soldiers but not that she built the first professional school for nurses and revolutionized hospital construction. Gandhi is remembered for demonstrations of nonviolent rsistance but not for building a decentralized political apparatus that enabled India to make a successful transition to self-rule.” And if St. Francis, Florence Nightingale, and Gandhi exemplified the isolated and occasional social entrepreneurs of yesteryear, there are thousands of courageous individuals now walking parallel paths to institutional change on every continent — backed up by a growing suport network that includes Ashoka, the Skoll Foundation, the Schwab Center for Social Entrepreneurship, Avina, and many other organizations. Given the enormity of the challenges facing humanity in the 21st Century, their combined efforts may represent our last, best hope to create a world in which our grandchildren can live healthy, rewarding lives.

David Bornstein and Susan Davis came to the task of writing this book with impeccable qualifications. In addition to How to Change the World, which went into a second edition in 2007, Bornstein wrote The Price of a Dream: The Story of the Grameen Bank, first published in 1996. He is the preeminent journalist in the field. Davis is a supremely accomplished activist, having served as a founding member of the Grameen Foundation and then co-founding BRAC USA, which she serves as President and CEO. (BRAC began its institutional life as a Bangladeshi nonprofit, later expanding to many other countries around the world. It is regarded as the world’s largest NGO.) She also helps select Ashoka Fellows. Previously, she held a series of senior positions with the Ford Foundation, Women’s World Banking, the International Labor Organisation, and other institutions.

Before Silicon Valley, Bell Labs was America’s hub of innovation

A review of The Idea Factory: Bell Labs and the Great Age of American Innovation, by Jon Gertner

@@@@ (4 out of 5)

Ask yourself why the United States of America has remained the dominant economic and military power on the planet for nearly a century now. Is it the superior universal public education system we used to brag about? Is it the wealth of our natural resources: millions of acres of rich, arable land and bountiful mineral and petroleum wealth? Is it the peculiar American ability to build and manage efficient large enterprises? Is it the size and the demographic richness of our population, constantly renewed by the influx of resourceful people from other lands and cultures?

Jingoistic rhetoric aside, it’s most likely that your list of reasons — even, possibly, your only reason — is “American know-how,” the homegrown phrase that points to what seems an unusual national talent for creative thinking and innovation. In fact, it’s difficult to overlook the disproportionate presence of the United States on the lists of Nobel Prizewinners, industrial patents, and other markers of forward thinking in science and engineering throughout much of the 20th Century.

In The Idea Factory, Jon Gertner examines one period and one place where the evidence of American know-how was most pronounced: the time from the end of World War II to the late 1970s in Murray Hill, New Jersey, where AT&T’s Bell Laboratories was headquartered. There, an extraordinary assemblage of brilliant scientists and engineers, guided by a succession of equally brilliant managers, invented or developed into practical form the fundamental advances in science and technology that have shaped the world we live in today: the transistor, the laser, quality assurance methods, communications satellites, mobile telephony, digital photography, fiber-optic communications, and a number of much less well-known but equally important technological advances as well as a long list of innovations in weaponry and spy technology that many of us would prefer not to know about. (In fact, the relationship of Bell Labs to the Pentagon, especially its National Security Agency, remained close throughout the period studied in this book.)

It’s difficult to exaggerate the impact of the work at Murray Hill and its outlying sites following World War II. The transistor — the brainchild of three Bell scientists, John Bardeen, Walter Brattain, and William Shockley — is frequently cited as the single most important invention of the century. Certainly, the transistor lies at the heart of all things digital today. Even more fundamental to the world we inhabit is the information theory of Claude Shannon, who explained how computers might communicate with one another long before anything resembling today’s computers existed.

As Gertner explains in great detail, most of Bell Labs’ work was carried out in service of the growing AT&T telephone network. (If you’re young enough to confuse that AT&T with today’s business of the same name, be advised that AT&T was America’s government-regulated telephone monopoly from the 1920s through the 1970s.) Those familiar with the network called it the biggest and most complex machine in the world. “The system’s problems and needs were so vast that it was hard to know where to begin explaining them,” Gertner writes. “The system required that teams of chemists spend their entire lives trying to invent new, cheaper sheathing so that phone cables would not be permeated by rain and ice; the system required that other teams of chemists spend their lives working to improve the insulation that lay between the sheathing and the phone wires themselves. Engineers schooled in electronics, meanwhile, studied echoes, delays, distortion, feedback, and a host of other problems in the hope of inventing strategies, or new circuits, to somehow circumvent them.”

Gertner makes absolutely clear, however, that “this book does not focus on those tens of thousands of Bell Laboratories workers. Instead, it looks primarily at the lives of a select and representative few,” chiefly scientist-managers Mervin Kelly, Jim Fisk, and William Baker and scientists John Pierce and William Shockley. Every one of these individuals was exceptional, and Gertner does an excellent job giving us glimpses of their eccentricities and missteps as well as their extraordinary lives and character and their accomplishments.

I can fault this exhaustive study in only one way: it’s exhausting, expecially in its concluding chapters, where Gertner spends far too many pages dwelling on the eulogies offered up by the managers who ran Bell Labs when it was alive and well, before the break-up of the old AT&T that was consummated in 1983.