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January 2010

Jan/Feb issue of Harvard Business Review

Harvard Business Review has a new design! Both the print magazine and the website have changed somewhat, with a new "look" and new features. In the magazine, the executive summaries of the articles, which used to be found at the end of each issue, have disappeared; two columnists, C.K. Prahalad of the University of Michigan's Ross School of Business (click here for his Wikipedia page) and Dan Ariely of the Fuqua School of Business at Duke University (of Predictably Irrational fame, and who also has a Wikipedia page) make their debut, as well as a Life's Work section on the last page, which features Condoleezza Rice for its first installment.

I particularly enjoyed reading:

  1. The column by C.K. Prahalad, entitled "The Responsible Manager", where he shares the advice he has given to his students every year for the past thirty-three years, upon ending his MBA and executive education courses (Item #1: "Understand the importance of non-conformity. [...] Leaders have to venture into uncharted territory, so they must be able to handle intellectual solitude and ambiguity.")
  2. "Five Ways to Bungle a Job Change," by Boris Groysberg and Robin Abrahams, both of Harvard Business School. Those mistakes are: (a) not doing enough research, (b) leaving for money, (c) going "from" rather than "to", (d) overestimating yourself (in one consultant's words, people "undervalue the strengths of their organization in helping them achieve their objective."), (e) thinking short term.

The revamped magazine was a great read. I am looking forward to the March issue already.


Elie Wiesel to deliver Commencement speech at Lehigh

It was announced this week that Nobel laureate and Holocaust survivor Elie Wiesel, possibly best-known for his book Night, will deliver the Commencement address at Lehigh on May 24. He is a very inspiring public figure and I am thrilled that he accepted Lehigh's invitation.

Here are some links of interest:

  • This biographical sketch of Wiesel at the University of Virginia starts with the quote "...to remain silent and indifferent is the greatest sin of all..."
  • The Academy of Achievement has also posted a biography of him (featured quote: "Always question those who are certain of what they are saying") and a fascinating interview.
  • The Elie Wiesel Foundation oundation, which Wiesel created with his wife after receiving the Nobel Peace Prize, has for mission is to combat indifference, intolerance and injustice.
As is tradition at Lehigh, (I quote from the press release), "[t]he Commencement Speaker Committee will [now] plan academic activities to be held in the spring to showcase Wiesel’s work, using Lehigh’s own faculty experts and leaders in fields related to those of Wiesel." I am looking forward to these events and, most of all, to the Commencement speech itself.

Revenue Management and Newspapers

The New York Times has just announced it would "charge for frequent access to its website" starting January 2011. People who read less than a certain number of articles a month will continue to browse the site for free, while those who exceed the limit will have to pay a flat fee for continued access. The NYT article notes, "fundamental features of the plan have not yet been decided, including how much the paper will charge for online subscriptions or how many articles a reader will be allowed to see without paying." 

I first learned that the New York Times was seriously considering a move to a "metering" model in an excellent NPR article back in July: "'New York Times' considers risk and new revenue" (July 19, 2009), so the news does not exactly come as a surprise. Most telling is the fact that, according to the NPR journalist, the NYT also gave serious thought to a "membership" model, similar to the one used in nonprofit organizations such as PBS. The decision in favor of metering suggests people at the Times still view the company as being in the for-profit business. 

I have to admit I never understood the all-advertising business model. I usually ignore all advertisements on the newspapers' websites I visit; it doesn't seem quite right that companies I have no interest in should pay for my ability to view articles. Given the drop in online advertising, it looks like many companies have come to the same conclusion. (I am also stunned that the NYT grants free access to its archives.) I could see myself becoming an online subscriber if the monthly limit of articles to be viewed for free is low enough, but that is because the NYT sets such a standard of excellence - the experiment, if successful, will not tell other newspapers anything about their own odds of making money from a metering scheme. I particularly liked the quote by a deputy national news editor, who stated: "[W]e have to get rid of the notion that high-quality news comes free."

I have written several times about revenue management in the newspaper industry; see for instance:

Here are more articles related to newspapers' troubles:

  • "Boston Globe workers agree to cuts", New York Times, July 20, 2009.
  • "New York Times Co. calls off sale of 'Boston Globe'", USA Today, October 14, 2009.
  • "About half in US would pay for online news, study finds", New York Times, November 15, 2009. ("Among regular Internet users in the United States, 48 percent said in the survey, conducted in October, that they would pay to read news online, including on mobile devices. [...] When asked how much they would pay, Americans averaged just $3 a month, tied with Australia for the lowest figure." I wish people valued high-quality news more. "Consumer willingness and intent to pay is related to the availability of a rich amount of free content," a senior partner at the Boston Consulting Group is quoted as saying.)
  • "Adding fees and fences on media sites," New York Times, December 27, 2009. ("“Quality content is not free,” Mr. Murdoch wrote in The Wall Street Journal on Dec. 8." And also: "[M]ost industry experts agree, entertainment will be easier to charge for than news [... because] the product is unique, with no substitute being created by someone else. [...] But for most general-interest news, any paid site would be competing with alternative versions of the same articles, delivered by multiple free news sources.")

The New York Times articles were all authored by Richard Perez-Pena, who appears to have made his beat of the news industry - a great move at a fascinating time.

The Times's latest revenue scheme might go the way of short-lived Times Select, or it might usher its parent company, which has about $1 billion in debt, into an era of renewed stability; no matter what happens, I am glad to see the Times take action. High-quality news - not only the stating of facts, but also the commentary and analysis that give the Times a competitive advantage - should not come free. There are blogs for that, and bloggers usually have a day job to pay the bills. Times journalists don't, or at least they shouldn't have to take one. This is their day job.


35 Innovators under 35

The September/October 2009 of Technology Review contained TR's annual feature on "the next generation of technology" (and the people who will make it happen). I had planned on writing a post about it a while back, but the Fall semester got in the way. The TR website offers full, free access to the listing of the 35 innovators selected for this year and a detailed profile for each, so I will simply mention a handful of research ideas that caught my attention:

  • "Defeating would-be hackers of radio-frequency chips in objects from credit cards to pacemakers," by Kevin Fu of the University of Massachusetts at Amherst (Fu was also named Innovator of the Year by TR). The idea is that devices using wireless communications are not safe from hackers; for instance, "after testing more than 20 such "smart" or no-swipe credit cards from MasterCard, Visa and American Express, Fu and his colleagues found that they could lift account numbers and expiration dates from several of the cards - even cards inside a wallet - just by walking past them with a homemade scanner." The application to pacemakers - specifically, the idea that hackers would reprogram implantable cardioverter defibrillators [ICDs] to threaten patients' lives, which Fu demonstrated is doable - sounded more far-fetched; on the other hand, no one thought it possible that a madman (or madwoman) would lace Tylenol capsules with potassium cyanide until it happened. So people like Fu should be commended for working on this problem.
  • "Practical medical devices for use in poor countries," by Jose Gomez-Marquez at MIT (Gomez-Marquez was named Humanitarian of the Year by TR). TR explains: "In the poor countries where Gomez-Marquez often works, finding replacement parts [to medical devices] can be impossible, rendering the equipment useless. So he's tried to use readily available materials to make simple versions that are either easy to fiddle with, disposable, or unlikely to break in the first place." In 2005, Gomez-Marquez participated in MIT's IDEAS competition, with a team dedicated to finding a needle-free system to deliver the measles vaccine. I particularly enjoyed the following quote, about an existing prototype he studied: "The device was sitting in a fancy box in eggshell foam. If it needs foam to survive a trip to New England, it's never going to make it to Central America." The long TR profile also describes other health-related innovations Gomez-Marquez has pioneered or is currently working on, such as "kits [that] will enable doctors and medical students to devise diagnostics, drug delivery devices, microfluidic chips, and more."
  • "Free service to help blind people navigate the Web," by Jeffrey Bigham of the University of Rochester,
  • "Using personal information to improve search results," by Jaime Teevan of Microsoft Research,
  • "Complex physics simulations that can run on everyday PCs," by Adrien Treuille of Carnegie Mellon University,
  • "Easy-to-use tools that allow people to present data in creative and interesting ways," by Jeffrey Heer of Stanford University.

Are blackberries the new marshmallows?

I was preparing the syllabus for the course I will be teaching this semester (it is hard to believe the Spring semester is already upon us!) when I came across my standard statement, in my long list of policies, that students should refrain from reading the newspaper and text-messaging in class. I insert this statement in all my syllabi, and I believe it surprises some students how strongly I feel about the matter: since they are not actively distracting other students when they do those things, they often view them as harmless.

I used to explain I find it rude, and there's some truth to that, but it is more of a shortcut than the full explanation. Okay, text-messaging in front of me does send the message that emailing their best friend - or, gasp!, absolutely anyone who'll send them a note - is more interesting than class. I am not thrilled, but that is not what annoys me the most. A slightly more accurate explanation would be that I am against doing things halfway. If students bother to come, they should pay attention. Otherwise, what is the point in attending? They are just wasting their time.

I am indeed very much against doing things halfway, but there is more to it than some philosophical stance on giving a task one's best effort. I think I react so strongly to text-messaging because it worries me to see students (especially good college students with a bright future in front of them) unable to delay gratification and wait until the end of the lecture to check their Blackberries. They are not the only ones - some industry professionals behave even worse, for instance checking their Blackberries in the middle of a meeting. But since students' careers haven't started yet and they haven't established a track record, they might suffer most from the consequences. I can't imagine that a short attention span would be useful for anything, and it bothers me to see students shoot themselves in the foot by developing poor work habits. I like to say that students who are also varsity athletes or music players will be in high demand a couple of years from now, simply because their mastery of a sport or an instrument will show recruiters they are able to focus for extended periods of time.

This reminds me of the Stanford Marshmallow Project, about which I wrote this past June as a comment to a post of mine on the dropout crisis. Here is part of what I wrote.

"I recently read about a fascinating study done in the 1960s at Stanford, about four-year-olds and marshmallows. In the study, a researcher gave a kid a marshmallow and said he had to leave for a while, but if the kid could resist eating the marshmallow while he was away, the researcher would give him a second one when he came back and the kid could then eat both.

About 1/3 of the kids were able to wait until the researcher's return and received a second marshmallow. Another 1/3 ate the first marshmallow right away. The last 1/3 waited a little bit and then gave up. Years later, the study participants were asked questions about their life satisfaction etc. The result was that the adults who showed the more self-discipline at age 4 (four!) performed better on a number of metrics and were more likely to succeed in life. [...]

You can read more about the study at http://www.sybervision.com/Discipline/marshmallow.htm or http://econlog.econlib.org/archives/2007/10/stanford_marshm.html or http://www.kaganonline.com/KaganClub/FreeArticles/ASK14.html among other places."

The one redeeming factor is of course that people get cell phones or Blackberries when they're much older than four, so the effects might not be as severe as those described in the Stanford study. There are plenty of occasions where having a Blackberry can come in handy. But the ability to focus on the task at hand is likely to remain a key attribute of successful people for years to come, and Blackberries do get in the way of concentration. There is no way around that and this will certainly yield many psychology studies in the near future. For an overview of early findings, see "Slow down, brave multitasker, and don't read this in traffic" (New York Times, March 2007), "Drop that Blackberry! Multitasking may be harmful" (CNN, August 2009) and "Multitasking can make you lose... um... focus" (New York Times, October 2008).

Both NYT articles in particular have surprising statistics:

  • "In a recent study, a group of Microsoft workers took, on average, 15 minutes to return to serious mental tasks, like writing reports or computer code, after responding to incoming e-mail or instant messages. They strayed off to reply to other messages or browse news, sports or entertainment Web sites." (NYT 2007)
  • "A 2005 study, “No Task Left Behind? Examining the Nature of Fragmented Work,” found that people were interrupted and moved from one project to another about every 11 minutes. And each time, it took about 25 minutes to circle back to that same project." (NYT 2008). A professor at UC Irvine who co-authored the study commented: "Ten and a half minutes on one project is not enough time to think in-depth about anything."
The resulting loss of productivity has been estimated to hundreds of billions of dollars, although one cannot hope for a precise number. The behavior even has a name, attention deficit trait, which, in contrast with attention deficit disorder, is entirely environment-related. The researchers suggest simple steps - such as turning cell phones off - to improve one's productivity, but recognize it might be difficult for people to re-learn the art of single-tasking.

On Grade Inflation

Although grade inflation is nothing new by now, it continues to generate many articles in the media. Inside Higher Ed ran a fascinating article on the topic back in March ("Grade Inflation Seen Rising", March 12, 2009), noting for instance that: "[A] new analysis found that the average grade-point average at private colleges rose from 3.09 in 1991 to 3.30 in 2006. At public colleges and universities, the increase was from 2.85 to 3.01 over the same time period." The study is due to Stuart Rojstaczer, a retired Duke University professor who authored an op-ed in the Washington Post in 2003 ("Where All Grades Are Above Average", January 28, 2003) and more recently created the website GradeInflation.com to gather his findings.

While the Washington Post op-ed takes somewhat extreme views, as many op-eds do (the author states that he no longer gives Cs and neither do most of his colleagues; Ds and Fs are - he says- avoided even more strenuously at his institution), it gives interesting statistics and makes valuable points. ("This trend of the dominance of the A and the diminution of the C began in the 1960s, abated somewhat in the '70s and came back strong in the '80s. The previous signs of academic disaster, D and F, went by the wayside in the Vietnam era, when flunking out meant becoming eligible for the draft.") 

The Inside Higher Ed article gives the example of Princeton, which has apparently tamed grade inflation, and of Brown, which supposedly has not. (More information on the Princeton case is available on this Wikipedia page.) It also mentions another analyst who is critical of Rojstaczer and believes grade inflation to be "marginal." My favorite part of the article is about the absence of grade inflation Rojstaczer has observed at community colleges, which I comment on below.

Rojstaczer reiterates his stance in a new op-ed - this one in the Christian Science Monitor, dated March 23, 2009 ("Grade inflation gone wild") - and worries students give minimal effort. ("A recent survey of more than 30,000 first year students across the country showed that nearly half were spending more hours drinking than they were studying. If we continue along this path, we'll end up with a generation of poorly educated college graduates who have used their four years principally to develop an addiction to alcohol.") This has certainly not been my experience in the classes I have taught; I like to think that students in career-oriented majors such as engineering or accounting also care about doing their job well after graduation, and study not only for the grade but also to avoid embarrassing moments once they are left to their own devices in the workforce. Besides, first year students can hardly be viewed as a representative sample of the college population. They are on their own, often for the first time, and eager to enjoy it. Answers would certainly be affected by the time in the school year when this survey was administered - in particular, whether it was before or after the grades of the first semester became available.

Also, I believe required courses and electives should be analyzed separately. My guess is that, at least for engineering students, the average grade given becomes higher as the student progresses in his college career. As an academic advisor at Lehigh, I have heard again and again from students and from the administration that GPAs tend to increase as (engineering) students make their way toward graduation: first-year courses help identify students who would be better off pursuing a non-engineering major; sophomore courses help identify students who made a mistake choosing that specific engineering major. Juniors and seniors can pick more electives and hopefully select topics they are truly interested in, which motivates them to get good grades. (The prospect of impending graduation and the importance that companies give to GPAs also act as powerful motivators.) I am not convinced at all that grade inflation is at play. This being said, Lehigh did raise its threshold to make the Dean's List from 3.5 to 3.6 a few years back, and to graduate with honors (from 3.25 to 3.4), high honors (3.5 to 3.6) and highest honors (3.75 to 3.8) at about the same time. This makes the accomplishments of students who do graduate with honors all the more impressive.

The extent of grade inflation at the college level remains open to debate, with some universities making occasionally the headlines for the wrong reasons. (In October 2001, the Boston Globe revealed 91% of Harvard students graduated with some kind of honors - see this New York Times article ["Debate at Harvard asks if its As are too cheap," December 5, 2001] which mentions the report. Harvard has since taken steps to curb grade inflation.) As a potential solution, Rojstaczer suggests university-wide guidelines (recommendations rather than rules) on the percentage of As to be given in a course - an approach Princeton has followed with success.

Another fascinating point is that Rojstaczer found no evidence of grade inflation in California's community college system, the data of which he analyzed extensively. A community college president interviewed by Inside Higher Ed provided two possible reasons: (1) "community colleges use grades to track how their students do when they transfer to four-year institutions" and (2) "because community colleges admit students with a range of academic backgrounds, accurate assessment is seen as important to help students enter the best possible programs and to track their progress." Furthermore, a community college professor explains that her students "are focused on how improving their writing will help them professionally, and they want to see that the course will give them new skills they can use, not a letter grade." This is quite similar to the situation in engineering and other career-oriented majors at four-year institutions.

Assuming grade inflation continues to be a concern, we might see prospective employers require a ranking of the students in the same major - possibly not a precise ranking, but at least a percentile number. Ranking, though, introduces an element of competition, which goes against the trend of team projects and other collaborations now prized at the college level, on the grounds that they better prepare students to working in teams in the workforce.


HBR Spotlight on Innovation

The  December 2009 issue of Harvard Business Review has a spotlight on innovation. Its flagship article, “The Innovator’s DNA”, by Jeffrey Dyer, Hal Gregersen and Clayton Christensen (of Innovator’s Dilemma fame) describes the five skills that “separate true innovators from the rest of us”: questioning, observing, experimenting, networking and finally associating, which is “the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields.” The authors also provide advice to help managers develop such skills.

It was an interesting read, but I was most impressed by “How Open Innovation Can Help You Cope in Lean Times”, by Henry Chesbrough and Andrew Garman, which details five open-innovation moves that can benefit companies as they attempt to leverage their research initiatives.

1.       “Become a customer or supplier of your former internal projects” (example: Eli Lilly)

2.       “Let others develop your nonstrategic initiatives” (example: Lucent)

3.       “Make your IP work harder for you and others” (example: Royal Philips Electronics)

4.       “Grow your ecosystem, even when you are not growing” (example: Unilever)

5.       “Create open domains to reduce costs and expand participation” (example: Philips)

I particularly liked how the authors tied the five moves to behavior from actual companies, and I felt the recommendations were a bit more concrete and original than those for the “Innovator’s DNA” article.

The last article in the Innovation spotlight was “Create Three Distinct Career Paths for Innovators” by Gina Colarelli O’Connor, Andrew Corbett and Ron Pierantozzi. This very short piece draws attention to talent mismanagement: “Expecting innovators to grow along with their projects – from discovery to incubation to acceleration – sets them up to fail. Most people excel at one of the phases, not all three.” This has applications beyond innovators – senior scientists on technical staff are often promoted to management positions on the grounds that everybody wants to move up (right?) But the jobs have significant differences, and a superb scientist might turn out to be incompetent when time comes to manage people. For each of the three career paths, the authors describe typical activities as well as entry-level, midlevel and senior-level skills in a table.

To stay on the topic of innovation a little bit longer, Clayton Christensen emphasized the distinction between disruptive and sustaining technologies in his classic “The Innovator’s Dilemma”, which I finally finished reading. One of his main themes is that “small markets cannot satisfy the near-term growth requirements of big organizations” (p.151 of the Collins Business  Essentials, because companies think in growth as a percentage of their revenues, and a small percentage of a large amount is a much bigger number than the profit a small market can bring). Another idea is that constrained resources and initially small sales forecasts make it almost impossible for a large organization to take advantage from a disruptive technology without spinning off a company to nurture its development. (“Sustaining projects addressing the needs of the firms’ most powerful customers…  almost always preempted resources from disruptive technologies with small markets and poorly defined customer needs,” p.48) Christensen provides a fascinating six-step pattern of decisions on pp.49-54:

  1. “Disruptive technologies were first developed within established firms.”
  2. “Marketing personnel then sought reactions from their lead customers.”
  3. “Established firms set up the pace of sustaining technological development.”
  4. “New companies were formed, and markets for the disruptive technologies were found by trial and error.”
  5. “The entrants moved upmarket.”
  6. “Established firms belatedly jumped on the bandwagon to defend their customer base.”

A key aspect of innovation is Step 5: entrants move upmarket as technology improves. The author argues that established companies focus upward; their inability to look downward at the competition improving a product that used to be inferior explains why they are often unable to spot the danger before the entrants have captured significant market share.

“The Innovator’s Dilemma” was a very enjoyable read overall, although the constant references to the 1980s and the early 1990s date the book a little – it was first published in 1997.

Ultimately, my favorite article of HBR’s December issue was not in the Innovation spotlight. Instead, it was “Don’t Be Undersold”, by Jan-Benedict Steenkamp and Nirmalya Kumar, an article on hard discounters (think Aldi and Lidl), and their impact in the US. Hard-discount stores, which have caught US brand executives off guard, are “responsible for destroying between a quarter and a half trillion dollars in mainstream brand sales annually” by focusing on a limited number of products on their shelves, especially their private label, which allows them to keep their staffing costs low and enjoy an extremely efficient supply chain. And that is innovation enough.   


Happy retirement, Dad!

Today marks my father’s first day of retirement, so I would like to use this post to give him a big shout-out for the thirty-six years of good and loyal services he rendered to his company. He started with nothing and I am amazed by what he has been able to achieve solely through hard work, perseverance and a commitment to education and learning. He is the one who taught me that you never do anything worthwhile in life without making some people jealous and you’d better make your peace with that early on. There will always be some folks who try to take credit for what you do, and people who try to pull you down because they don’t like to be reminded that you can get more from life if you put all your energy into improving your situation, even if you haven’t been dealt a good hand of cards. (Basically there will always be people who try to pull you down because it takes a lot less effort for them than to lift themselves up. They think the result is the same: you end up side by side.) But it’s a reflection of these people’s own sense of inadequacy more than it is a comment on what you do, and you learn to shrug it off and move on. As it turns out, my mother has a very similar life story (actually worse, because the surviving-the-genocide part happened on her side of the family). We never ate out when I was little. We didn’t have fancy cars. But my parents worked hard and my brother and I studied hard and we made it happen. It took a lot of time – decades, even – for us to get where we are now. We didn’t have connections to give us a break, but it makes our accomplishments all the sweeter. My father gets most of the credit, though, for the tireless example and never-wavering commitment he displayed all those years. Now he gets to enjoy the reward for his hard work.

Happy retirement, Dad! You’ve earned it. I am so proud of you.