Organizational and Business Storytelling In The News: Story #138
May 3, 2004
Learning from the story of a trainee at Toyota
Is Toyota the best-performing knowledge organization in the world? Some analysts would argue that it is. By the end of last year Toyota was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales. In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors.
Given Toyota's performance in terms of quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization, other companies have studied and attOrganizational and Business Storytelling In The News: Story #138
May 3, 2004
Learning from the story of a trainee at Toyota
Is Toyota the best-performing knowledge organization in the world? Some analysts would argue that it is. By the end of last year Toyota was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales. In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors.
Given Toyota's performance in terms of quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization, other companies have studied and attempted to duplicate the company’s processes. Several decades ago, General Motors famously spent some $45 billion trying to duplicate its automation processes with little success. The fact that few companies have come close to rivaling its performance suggests that the secret of Toyota does not lie in stories about its processes.
An article in the May 2004 Harvard Business Review, Steven Spear argues that a major part of the reason is that imitators focus on specific tools and practices while failing to recognize the underlying principles of the Toyota approach.
According to Spear's earlier HBR article, Toyota’s much-noted commitment to standardization is not for the purpose of control or even for capturing a best practice, per se. Rather, standardization—or more precisely, the explicit specification of how work is going to be done before it is performed—is coupled with testing work as it is being done. The end result is that gaps between what is expected and what actually occurs become immediately evident. Not only are problems contained, prevented from propagating and compromising someone else’s work, but the gaps between expectations and reality are investigated; a deeper understanding of the product, process, and people is gained; and that understanding is incorporated into a new specification, which becomes a temporary “best practice” until a new problem is discovered.
Spears describes the training of an "American hotshot", who arrived at the company thinking that he already knew the basics of TPS -- having borrowed ideas from Toyota to improve operations in his previous job -- and would simply be fine-tuning his knowledge to improve operations at his new assignment. He came out of his training realizing that improving actual operations was not his job -- it was the job of the workers themselves. His role was to help them understand that responsibility and enable them to carry it out. His training taught him how to construct work as experiments, which would yield continuous learning and improvements, and to teach others to do the same.
Toyota inculcates managers with the Toyota approach in the way it readies recruits for a higher-level position at one of Toyota's U.S. plants. According to Spear's story, the trainee learned four main elements:
• Element #1: “Direct observation”. Toyota employees are encouraged to observe failures as they occur. That includes managers who are required to watch employees work and machines operate. Spears points out how different this is from the usual forms of indirect observation such as reports, interviews, surveys, narratives, aggregate data, and statistics.
• Element #2 “Change is experiment" Toyota expects employees to embed explicit and testable assumptions in the analysis of their work -- all of which managers have to report in detail and with considerable precision. That approach helps reveal gaps between predicted and actual results.
• Element #3: "Frequent experiment" Employees at all levels strive for continuous improvement through quick, simple experiments instead of lengthy, complex ones. The manager’s training is structured so that the complexity of the experiments increase gradually, allowing mistakes without severe consequences, thereby increasing his willingness to take risks and learn by doing.
• Element #4 “Managers coach rather than fix.” Toyota managers enable and direct employees, but refrain from telling them where to find opportunities for improvements. Spears argues that this unusual manager–worker relationship produces a high degree of sophisticated problem solving at all levels of the organization.
It is also striking that Toyota provides the resources to facilitate rapid experimentation. The trainee in Spear's article had the help of a maintenance worker to move equipment, create fixtures, relocate wires and pipes, and provide other skilled trade work so that he could test as many ideas as possible. The supervisors also came to the cell of the machining operation to review the trainee's ideas and gave him tips on piloting his changes before asking support workers to make parts or relocate equipment. When the trainee wanted to rotate some gauges that tested parts, the supervisor showed him how to quickly and inexpensively make cardboard prototypes to test location, orientation, size, and so on. The result of this unusual manager–worker relationship is a high degree of sophisticated problem solving at all levels of the organization.
What is more convincing than the various lessons that the trainee learned in the article is the fact that the article is the story of the training of a single individual - a hotshot in the US environment - encountering the very different approach of Toyota. The learning lies less in the lessons than in the story.
Read Steven Spear in the Harvard Business Review
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Organizational and Business Storytelling In The News: Story #137
May 2, 2004
The story behind the images from Iraq prisons
Amid all the talk about the horrifying images from the prisons in Iraq, and the discussion of the power of images, it is often overlooked that what is driving the outrage is not so much the images, as the stories that we are reading into the images.
Thus understanding of the meaning of these images is wildly different depending on which of the following stories we read into the images:
1. The images are fake images, aimed at discrediting the US and UK military.(an interpretation being examined by the British authorities in connection with the pictures published by the Daily Mirror in London); or
2. The images were staged images to intimidate prisoners, but no actual abuses took place; or
3. The images represent abuses by a few isoloated individuals in Iraq; or
4. The images represent systemic abuses by the military chain of command; or
If story #1 were to become the accepted story, then the images would be seen as having little significance or lasting value.
If on the other hand story #4 were to become the accepted story, then the images might represent a stain on the reputations of the governments of the coalition that might last for many generations.
Since a US investigation completed in February has established that some abuses did take place, it is implausible that stories #1 or #2 will become the accepted story.
The US administration is making a strenuous public relations effort to get the world to accept that story #3 is the "correct" interpretation.
However much of the world has already leapt ahead to story #4 as the most likely story of what has occurred. This leap of imagination has been facilitated by the apparent lack of followup to the initial report of the US military investigation, with the report of the abuses reaching the highest level of the military or political command. It seems likely that this widespread belief in story #4 could only be removed by the most open, thorough and independent investigation of what has gone on.
Whatever the outcome, the political impact will be massive -- all depending on a story.
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Organizational and Business Storytelling In The News: Story #133
April 28, 2004
Investor's Business Daily on organizational storytelling
Investor’s Business Daily’s Ten Secrets to Success: Investor’s Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have ten traits that, when combined can turn dreams into reality. Each day they highlight one. On April 27, 2004, they highlighted organizational storytelling under the heading, “Decide upon your true dreams and goals”.
Organizational and Business Storytelling In The News: Story #133
April 28, 2004
Investor's Business Daily on organizational storytelling
Investor’s Business Daily’s Ten Secrets to Success: Investor’s Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have ten traits that, when combined can turn dreams into reality. Each day they highlight one. On April 27, 2004, they highlighted organizational storytelling under the heading, “Decide upon your true dreams and goals”.
The article, by Amy Alexander, is entitled Once Upon A Tomorrow
When they needed to brand a common goal onto the minds of many, Martin Luther King, Winston Churchill and John Kennedy turned to storytelling. They didn’t tell fairy tales or fables. They painted a picture of tomorrow that their followers could make their own.
King shouted, “I have a dream,” and then spoke of all Americans working and playing together. Churchill described fighting on the beaches, landing fields, in streets and on hills, laying out what the troops would have to do to win World War II. Kennedy said, “This nation shall commit itself to achieving the goal, before this decade is out, of landing a man on the moon.”
You don’t have to be a King or a Churchill or a Kennedy to tap into the power of storytelling. It’s an effective way to get goals to gel at any company, says Stephen Denning, an organizational storyteller.
Reach Within
“You might be bale to excite the mind with analysis, but when you are trying to move people and inspire people, you have to reach for the heart,’ he said.
Denning was one of several organizational storytelling experts who gather in Washington D.C. in April for a Smithsonian-sponsored seminar on how to use storytelling as a catalyst for change.
Denning was working as director of knowledge at World Bank when he discovered that if he tried to talk higher-ups into investing in knowledge sharing by throwing around facts and spreadsheets, people’s eyes glazed over. Yet when Denning began telling and retelling a simple story of how one doctor in a village in Zambia could treat malaria by going online to find answers, attitudes changed.
That story persuaded higher-ups to invest time and money in knowledge sharing, which resulted in the World Bank becoming the leader in knowledge management.
Using Imagination
Why does storytelling so well when it comes to creating a vision? Denning explains it in his forthcoming book, “Squirrel Inc.”
“The best way to get human beings to venture into future terrain is to make that terrain familiar and desirable by taking them there first in their imaginations through a story,” Denning wrote.
The simpler the story, the better, Denning says.
“Future narratives sketch a vision that points in a general direction but little else,” he said. “if these narratives are effective, it is because the listeners themselves put flesh on the skeleton. The listeners contribute the narrative detail.”
A brief evocative, general story makes it easier for listeners to adapt when the unexpected happens. “People can remold the narrative in their imaginations on the fly,” Denning said.
Shake things up,. What would a better future look like for your organization? Don’t’ get too caught up in “what ifs” and “yeah, buts.” When you’re crafting your vision – your company’s story of tomorrow – it’s important to keep an open mind. “A vision doesn’t offer exclusionary moves,” Denning said. “It opens up the landscape of possibilities still to come.”
Read the Investor's Business Daily
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Organizational and Business Storytelling In The News: Story #131
April 26, 2004
The story of Google going public
Some months ago, we noted the article in which of Nobel-Prize-winning economist Daniel Kahneman commented on whether those people who lost their shirt in the dot-com crash have actually learned anything. Kahneman said, "Oh, many people will admit that they made a mistake.
But that doesn’t mean that they’ve changed their mind about anything in particular. It doesn’t mean that they are now able to avoid that mistake."
Now as Wall Street salivates at the prospect of Google launching an IPO and possibly becoming a $20-25 billion company, Kahneman's advice is salutary.
The founders of Google built a business out of selling paid ads alongside search results, which turned Google into a money machine. Most important, they provided fast and reliable results, propelling Google from handling less than 1% of Web searches in 2000 to over 50% today.
While most analysts are envisaging a bigger and ever more brilliant future, BusinessWeek points out the competitive threats to Google:
• Yahoo is leading the assault. In February, the portal giant fired up a new search engine that analysts say nearly matches Google's performance. More worrisome, Yahoo CEO Terry S. Semel is driving Yahoo to the next frontier, customized search. Instead of today's one-size-fits-all searches, he wants to offer queries tailored for an individual's tastes, interests, even location. Advertisers are ready to pay royally to reach this type of targeted audience. And Yahoo is off to a big head start in gathering the personal information necessary to deliver such customization. It has amassed 141 million customer profiles; Google next to none. "They're quite vulnerable," says Michael A. Cusumano, professor of management at Massachusetts Institute of Technology.
• Even if Google sidesteps that threat, it faces another, perhaps more daunting one. Microsoft is working to leverage every bit of its Windows monopoly in the effort to win the search market. Ballmer and Chairman William H. Gates III are working to embed search capabilities into nearly every aspect of future versions of the operating system. Have a question? Search the Web and the hard drive too from a Word document, an instant chat box, even an Excel spreadsheet. No need to pay a visit to a search site. If Microsoft makes good on this sweeping expansion, it could turn Googling into a quaint ramble down memory lane.
• Google's trials would strain even a battle-hardened outfit geared for war. But the company still operates under freewheeling management, a vestige of its peaceful prosperity as a private company. Under a ruling triumvirate, no one exec has clear control. CEO Eric E. Schmidt, 48, was hired three years ago to provide experienced leadership. But his role, as he describes it, sounds more like a chief operating officer's than a CEO's. He says he handles "the day-to-day stuff," making sure the right people are talking and reaching out to partners.
• Decisions emerge from three-way negotiations between Schmidt and co-founders Page and Sergey Brin. It's the founders who chart Google's path, wielding veto power on strategy and technology moves. Engineers, meanwhile, work in the same culture of controlled chaos that built the startup. All are free to pursue pet projects. The result is an engineer's dream -- but hell for planners. Some investors find the approach unsettling. "They do not sound even remotely like a fiercely competitive world-class company, [but] rather kids playing in a sandbox," says one Google investor, who plans on selling shortly after the IPO.
As BusinessWeek notes, the kids will have to grow up fast. Dot-com investors will also have contain their "irrational exuberance" if they don't want to lose their trousers as well as their shirt.
Read the Wall Street Journal
Read BusinessWeek
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Organizational and Business Storytelling In The News: Story #129
April 24, 2004
Global Province: Growing role of storytelling in business
This month, Global Province has an interesting piece on organizational storytelling entitled, From a Sow's Ear to a Silk Purse.
After going through the storytelling fell into disrepute in business, and how business communications became less and less intelligible, the Global Province says that things are changing.
It says that what’s new in 2004 is that the story today not only is at the heart of culture but is also cropping up more and more in business practice as enterprises try to build more authentic connections with their employees, customers, and other constituencies. In part, this seems to be a reaction to our digital world, where we are assaulted by proliferating bits of information that never seem to add up to anything. Somebody has to put all this stuff together.
Story, Inc. Numerous large companies are now using storytellers in a host of ways. Hewlett-Packard, the W.K. Kellogg Foundation, and Pixar use story consultants to reinforce corporate beliefs and to teach managers the art of the story and its use in their work. See “Fabulists at the Firm,” The Wall Street Journal, January 9, 2004, p. W11.
Stephen Denning writes about the use of storytelling in knowledge transmission in The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations.
“In Britain,” says the Journal, “corporate storytelling is part of a larger fashion for trying somehow to mesh the arts with business. One prominent advocate is theater director Richard Olivier, who has a second career going as the director of the Olivier Mythodrama Associates Limited.” The Brits, we think, theorize that storytelling and literary excursions do more than spread knowledge: They see fiction, plays, even poetry as devices for inspiring creativity.
Stories are creeping into advertisements as well. Years ago an advertising guru was heard to say, “Truth is what really sells. Now if we could only package truth.” Short of that, company brand managers now employ fiction to make a point.
For instance, Ford of Great Britain has hired British “chick-lit” novelist Carole Matthews to bring spice to its Ford Fiesta by weaving it into her books, by doing monthly stories for its website, and by heading up a Ford short story competition. It’s thought that this tactic will hook 25-to-35 year-old women. (See The New York Times, March 23, 2004, p.C2)....
Some medical schools, by popular demand, are now offering courses on medical narrative. See “The Writing Cure: Can Understanding Narrative Make You A Better Doctor?” New York Times Magazine, April 18, 2004, pp.42-47. Many physicians scoff at the value of such courses, but we suspect that the story is integral to good healthcare. Specialists who only deal with events and procedures can ignore histories. Physicians who care about lives must embrace the whole of the patient they would seek to treat, capturing the totality in a story.
The story is a tool for business, for healthcare, and, critically, for education. In her essay, “Ojos Sobre Cuba,” San Francisco speechwriter Rebecca Otto remarks on the presence of readers or lectors in Cuba’s cigar factories. They sit in front of the workers, reeling off the news of the day and reciting stories from current, popular books. Cuba has achieved a 97% literacy rate, in part by bringing books and knowledge to workers wherever they might be—in a factory or picking sugar cane out in the fields.
The Global Province concludes: "Everywhere we go, stories entertain, instruct, engage, and enrich. Society, it seems, needs good yarns with a touch of vision, not just to pass the time but to keep moving forward into the future. Without a story, all our todays seem like yesterdays, and there are no tomorrows. Stories turn sows’ ears into silk purses."
Read the Global Province
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Organizational and Business Storytelling In The News: Story #127
April 22, 2004
The story of Nokia and Samsung: who's hot and who's not
A few months ago, a colleague was telling me about his cool new phone and showing off its bells and whistles. My daughter was listening in and soon she had bought the same phone. I don't own a cell phone, and it was only later that I realized that they had both discarded Nokia phones to buy what they saw as cooler Samsung products.
Samsung is hot - Nokia is not
Now John Gapper reports in the Financial Times that my observations are instances of a global phenomenon. Although Nokia's share of the global market for mobile handsets is still large, its South Korean competitor, Samsung, has momentum. Samsung's camera phones, with twisting flip-up screens that allow users to take, send and display photos quickly and easily, are hot; Nokia's are not.
The financial impact of this assessment became apparent last week as news came last week that Samsung's market capitalization exceeded that of Nokia, following Nokia's disappointing first-quarter results. Even more galling to the Finnish company is the transfer of the intangible narrative quality known as market leadership. The high end of the market - phones that retail for $300 or more in the US - is no longer Nokia's. Samsung makes the expensive camera phone that a young consumer wants to tell friends about.
Gapper argues that Nokia realizes how potentially serious is its predicament, even if its initial response - six of its 40 planned new models are clamshell-shaped - is a bit scatter-gun. But two obstacles stand in the way of its regaining authority. One (product design) should be soluble, given the company's heritage. The other (that Samsung is South Korean) will be harder to tackle, as other western companies are likely to find as well.
According to Gapper, design should be Nokia's forte, since it originally overtook Motorola by turning handsets into handsome and desirable consumer goods, rather than bland technological objects. Yet in its recent models, Nokia appears to have forgotten the first precept of modernist design - that form follows function. Instead, it has placed most emphasis on making its handsets colorful and zappy, with snap-on fascias.
Gapper argues that Nokia should be able to regain its poise in design. But Samsung has another advantage, which is more difficult for any European rival to counter: the willingness of young South Koreans to pay high prices for new electronic devices. In terms of access to broadband and telecommunications infrastructure, Samsung happens to be sitting in one of the world's most wired - and wireless - markets.
In the end, that is a bigger problem for Nokia than being ambushed by Samsung's designers. Design skills are transferable in a way demographics are not. Western companies often talk of Asia as a vast market waiting to be tapped, but Samsung has shown that it can bite back. Every western business executive visiting the continent probably experiences that fear: they're hot and we're not.
Bottom line
The narrative line is the same among consumers and analysts: Samsung is hot - Nokia is not. Whether people really need a camera in a cell phone, or a twisting flip-up screen that swivels back, or the capacity to have multiple musical tunes to be assigned to different callers, hardly matters. What really counts is whether customers and analysts are telling positive stories about these features. Regardless of the inherent quality of the products, the stories that customers and analysts tell about have a huge impact, first, on what people are thinking and talking about, then on sales, and then on profits and market share.
Read the Financial Times
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Organizational and Business Storytelling In The News: Story #126
April 21, 2004
The story of Eli Lilly: Learning from failure
Some of the notable advances and innovations in business and science have come from failure:
• Alexander Fleming discovered penicillin when mold started growing in a Petri dish in his untidy laboratory.
• Post-it Notes got their start in 1968 when a 3M researcher was aiming to improve adhesive tape and failed. Instead, he got was a semi sticky adhesive, which turned out to be what another another 3M scientist needed to keep his bookmarks from falling out the hymnal in his church choir.
• Another 3M scientist came up with Scotchgard, which helps prevent dirt from staining fabric, what she she set out to create was something quite different - a synthetic rubber to be used in airplane fuel lines. One day some of the new substance spilled on her assistant's canvas shoe, and they couldn't get it off. As the tennis shoe grew older, it got dingy--everywhere except where the substance had spilled. .
Learning from failure at Eli Lilly & Co
Drug companies see the importance of tolerating -- and learning from -- failure, a valuable strategy since about 90% of experimental drugs in the industry fail. Pfizer Inc. originally developed the blockbuster impotence drug Viagra to treat angina, or severe heart pain
Now the pharmaceutical company, Eli Lilly & Co, is singing the praises of consistently learning from failure, in an interesting article by Thomas Burton in the Wall Street Journal. According to Burton, Lilly has long had a culture that looks at failure as an inevitable part of discovery and encourages scientists to take risks. If a new drug doesn't work out for its intended use, Lilly scientists are taught to look for new uses for a drug. In the early 1990s, W. Leigh Thompson, Lilly's chief scientific officer, initiated "failure parties" to commemorate excellent scientific work, done efficiently, that nevertheless resulted in failure.
According to Burton, Lilly has taken this approach to unusual lengths. It assigns someone -- often a team of doctors and scientists -- to retrospectively analyze every compound that has failed at any point in human clinical trials. Blair Sheppard, a management professor at Duke University who's done consulting work for Lilly and other pharmaceutical companies, says that Lilly developed "a formalized and thoughtful process in which it reviewed failures more honestly, more deeply and started the process sooner than anyone else."
• Evista, now a $1 billion-a-year drug for osteoporosis, was a failed contraceptive.
• Strattera, a hot-selling drug for attention deficit/hyperactivity disorder, bombed out as an antidepressant.
• A promising cardiovascular drug called a PPAR-alpha-agonist, which lowers fat levels in the blood, arose from a failed asthma project.
• The antidepressant Cymbalta, for which Wall Street has high hopes, failed in its original trials until a Lilly scientist upped the dosage.
• Eli Lilly & Co. had high hopes for an experimental chemotherapy drug called Alimta. But after three patients taking Alimta died suddenly in 1999, Lilly halted trials of the drug. It eventually emerged that patients with the most severe side effects were those with high homocysteine -- and low folic acid -- in their blood. The researchers decided on a disarmingly simple solution: Give all patients folic acid pills in addition to their dose of Alimta. "When I first heard about it, I thought it was crazy," says Bruce A. Chabner, clinical director of the Massachusetts General Hospital Cancer Center.
Although Lilly's share price has suffered due to the expiry of the patent for Prozac, approval problems with the FDA, and competition from other drug companies, Eli Lilly & Co's track record is interesting, in an industry where getting two new drugs approved by the FDA is considered a banner year. Lilly already has six approved so far in 2003 and 2004 combined and hopes to get another two approved by year-end. And it has another 11 promising drugs in the middle- to late-stage pipeline.
Read the Wall Street Journal
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Organizational and Business Storytelling In The News: Story #121
April 16, 2004
Inflation and the story of money
The most important story on Wall Street these days is not whether but when? When will the Fed move up interest rates. The destiny of hundreds of billion dollars depends on which story is told.
Lingering concerns about deflation felt by investors were allayed last week after the government reported brisk March retail sales and the biggest surge in consumer prices in more than two years.
The story that inflation was on the rise roiled the bond market, where expectations of a Federal Reserve rate increase and concerns about inflation have combined to push longer-term interest rates up more than half a percentage point since mid-March.
Many investors see the story of the economy as having reached a turning point, with the recovery on a self-sustaining path but facing a period of adjustment as investors, companies and households confront the implications of a world without cheap money.
Managing that adjustment falls to the Fed, which for a year has been saying that the primary fears were slow growth and price deflation, not inflation.
The issue isn't whether prices are rising so fast that the Fed needs to step on the monetary brake -- they're not -- but whether it's finally time to begin easing off the accelerator, in the form of the lowest federal funds rate in 46 years. Just the process of moving the Fed to a "neutral" position would involve increasing the funds rates from 1 percent to 3 percent. And last week the message from the bond market and a growing number of economists is that the time to begin moving in that direction is at hand.
The stakes for financial markets of this story are profound. Over the past year, hedge funds, banks and speculators have borrowed heavily to buy stocks, bonds, real estate and commodities, helping to drive up prices of those assets and leaving markets vulnerable to any backup in rates. Now that rates have indeed begun to rise, the danger is that there could be such a rush to unwind those positions that these asset bubbles could burst. Just such a panic was reflected in the sharp decline last week in the share prices of once-hot real estate investment trusts.
Perhaps even more important than where to go in equities is simply to trim back exposure to bonds. Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis spoke to the Wall Street Journal. "The bond market bores you to death – then it kills you," he said. He thinks the Fed-funds rate could reach 2.5% to 3% by the end of the year, and that the 10-year yield will hit 5.5% by the end of the year – a steep increase from 4.34%, where it stands as of Friday. "I think the best thing you can do as an investor is reduce your bond exposure and reduce the duration of remaining bond exposure," he says.
Historically, bonds do much worse than stocks when inflation is rising, Paulsen says, citing 1984 and 1994 as two years of inflation fears when bonds got killed and stocks held up better – even if that meant staying flat for awhile. In 1984, the 30-year bond's yield soared from 10% to 14% as bond prices tumbled. In 1994, the yield rose from 6% to 8.5%. In both cases, he says, stocks were almost completely flat for the year and saw big gains in the years following.
Investors are also beginning to cast a nervous eye on China's overheated economy. While China's appetite for goods and capital is helping to fuel economic growth around the world, it is also driving up world prices for everything from cement to soybeans. But cooling things down would require Beijing to untether its currency from the dollar, which risks destabilizing China's already frail banking system and slowing its transition to a market economy.
Bottom line
Thus, investors sit watching, in part constructing their own story of the likely path of the economy, but even more important, trying to figure out what story other players will follow - the Fed, other investors and analysts - will concoct. The choice of story will have a determining impact on the placyment of hundred billions of dollars.
Read the Wall Street Journal
Read the Washington Post
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
Organizational and Business Storytelling In The News: Story #116
April 11, 2004
Role of narrative in fashion photography
This morning, the New York Times notes in its discussion of the current Museum of Modern Art (MOMA) show on "Fashioning Fiction," that in the 1990's fashion photography made clothing subservient to narrative. The show is built around the idea that in the 1990's fashion photography became fixated with narrative, with storytelling.
The story however is minimalist, leaving the viewer to complete the narrative. You have to stand in front of them for a while to d figure out a story line — it was her birthday, they got together, they broke up, etc. They are evocative of narrative circumstance rather than telling a story, step by step.
Holly Brubach notes that people used to complain that Balanchine's ballets were too abstract, they lacked story lines, and he used to say, "Boy offers hand, girl takes hand, how much story do you want?" That's what she's reminded of by this exposition. The narrative is vague, but that's not such a bad thing.
Brubach also notes that fashion photography satirizes itself and the whole notion of glamor. "There's a send-up of female perfection, which seems logical given what happened in the 80's — the supermodel obsession and the idea of the sleek goddess that was projected in so many fashion images. We have to remember that there is this dialectic in fashion where it swings back and forth between perfection and ideal beauty and then toward a kind of revulsion with all that. And you see it in different forms here. You see it in Cindy Sherman, photographed with a face that's partially scarred, or you see it in the Nan Goldin or Mario Sorrenti pictures. They're consciously in your face with the idea that these are not supermodels. And then you see the whole idea played out again in more humorous form in the Meisel Italian Vogue shoot satirizing the 50's, which illustrates perfection but taken to such a degree that it becomes absurd and amusing."
Ginia Bellafante notes that the photograph taken in Havana by Philip-Lorca diCorcia (see detail above), of a woman standing by a bar is a direct reference to Edward Hopper's paintings — and with its mood of romanticized disconnection, of alienation, it seems to represent the feel of the whole show.
Bottom line
The theme of the MOMA show also reflects a deeper point -- photographs in general only make sense when we know the story that they embody.
Read the New York Times
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Squirrel Inc: A Fable of Leadership Through Storytelling,
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a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
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Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Organizational and Business Storytelling In The News: Story #115
April 10, 2004
Story of biotech research: role of individuals in innovation
Further to an earlier story in these pages on the tension between big organizations and innovation, BusinessWeek reviews a new book, The $800 Million Pill: The Truth Behind the Cost of New Drugs by Merrill Goozner (University of California, 2004) and highlights a couple of examples where the persistence of an individual researcher made the difference between success and failure:
• Amgen Inc.'s (AMGN ) blood-boosting EPO, the world's best-selling biotech drug, was based on decades of work by an academic scientist -- and the collection of 2,550 liters of urine from Japanese patients.
• Novartis (NVS ) is reaping plaudits and billions of dollars in revenues right now from its cancer drug Gleevec, but the treatment would have never come to market without Brian Druker at the Oregon Health & Science University. The company originally thought that the market -- patients with a rare leukemia -- was too small to justify developing the drug. Druker, however, lobbied hard for human trials after showing that the medicine worked in a test tube. He even gave Novartis an ultimatum. "Either get it into clinical trials or license it to me," he said. Now, Gleevec is a blockbuster. It took a dedicated researcher before a reluctant drug company delivered on the promise of its proprietary product.
Organizational and Business Storytelling In The News: Story #109
April 4, 2004
Cyclical vs linear storytelling in organizational change
During my stay in Australia last week, I participated in a workshop in a storytelling program that has reached some 60,000 participants and evaluated as a success by the Australian Government. Although the program is focused on helping individuals cope with personal transitions and loss, it has implications for organizational change programs, which often founder on unexpressed grieving for "the way things used to be".
Change and and the loss of personal identity
These days, personal identity is bound up with what we do in the context of our work. When that work context suddenly and significantly changes, the individuals involved are essentially being asked to change their personal identities. It's hardly any wonder that this doesn't happen easily or quickly or naturally.
While participants may appear to be going along with organizational change programs, there is often an invisible undercurrent of feeling focused on getting back to "the way things used to be". When the opportunity presents itself, employees abruptly revert to the old way of behaving, because "that's how things have always been done around here".
The typical management tactic is to ignore the "silent grieving" for the past and hope that sufficient momentum can be created for the change that those who yearn for the past will be swept along by the forward progress.
An alternative is to recognize the grieving process for what it is and explicitly deal with it. The difficulty in accomplishing this is that there are no obvious processes or terminology in the management vocabulary for coping with such deep-seated and rarely expressed feelings.
This is where the Australian program called "Seasons for Growth" might come in. It's a program aimed at helping people of all ages cope with major change and transitions in their lives. It involves a shift from a linear lens to a cyclical lens on the world.
The linear storytelling lens
Western civilization is largely based on a linear view of the world. It is exemplified by Aristotle’s Poetics, in which a story is seen as something with a beginning, a middle and an ending. Once the story has ended, it’s over. The story has ended, and there’s nothing left for the listener but a void. The linear view of life is just a metaphor for the world, but if we use this metaphor to view the world, we find ourselves in this void, when the story ends. It’s a void created by a linear lens that we’re using to view the world.
The linear view of the world is also implicit in such models as Joseph Campbell's "hero's journey" which tracks the progress of a protagonist in a voyage that has a start and an ending.
The problem with the linear view of the world is that once the story ends, there is nowhere else to go. One is left in a void. When things are going well, that may not be a problem. But when severe personal loss is involved, such as death of a loved one or devastating illness or incapacity, the ending of the story can cause various kinds of anxiety, unease, neuroses, suffering and unhappiness and an inability to cope.
It’s not often realized that the linear lens is something that we bring to the world, not something that is inherent in the world itself. What we don’t always grasp that it’s not the only lens that we can use to view the world. The fact is that we can bring other lenses to view the world. In particular we can view the world through a cyclical lens, of which the lens of seasons is an example.
The cyclical lens
The Seasons for Growth program is based not on a linear view of life but rather on cyclical view of the world. It uses a metaphor -- the four seasons of the annual calendar. In the annual calendar, the seasons never “end”. Autumn is followed by winter, which is followed by spring, and which is followed by summer, and then we’re into autumn again, and so on. There is never a point in time when the seasons have ended. The seasons never end. They just change.
Each of the seasons has a meaning which flows from the previous and which leads on to the next season. Thus:
• Autumn is the season of which we experience loss. The fruits drop to the ground, the flowers are no more. We recognize that the flourishing summer is no longer with us.
• Winter is a season which we experience the pain of this loss. In the cold of the season, we tend to go inwards, and suffer from the lack of what is no longer with us.
• Spring is the season when we experience the thrill of the rebirth of new life. We still remember the coldness of winter, but we also look ahead to the potential of new growth, new energy, new prospects of life.
• Summer is the season for the enjoyment of the fullness of life, its plenitude, its richness, luxuriant in the fruits. It’s a season of looking outwards, of satisfaction, of pleasure, of delight of happiness.
No season is right or wrong. It’s rather that each season is different.
We might like to be always “in summer” or always “in spring”, but this is not possible in our world. Loss and change is inevitable. Wisdom entails embracing change and recognizing that there are seasons and feelings appropriate to each part of the cycle, and honoring those feelings.
In the cyclical view of the world, the seasons never end. One season follows another, inevitably and necessarily.
Each season has a set of feelings associated with it, and that are appropriate to it.
When it comes to the weather, we can see that there is no point in fighting or denying the shift from Spring and Summer to Autumn and Winter. It’s the same in dealing with human loss and transition. There’s no point fighting the seasons. Human life is inevitably filled with loss and the pain of loss. Life can’t be perpetual enjoyment. The point is to understand the seasons and learn the ways of dealing with the peculiarities of each season, and learn various ways of coping with the different seasons, and how to move on from one to the other.
Understanding the seasons
Through the metaphor of the four seasons, participants in Seasons for Growth find a vocabulary and a conceptual framework for talking about loss.
Seasons for Growth helps participants to see that stories don’t end – it’s just that the seasons move on. In a cyclical view of the world as seasons, the story never ends. You never get out of the story. The seasons simply continue.
Participants come to see that change involves genuine loss – Autumn – that led to real pain – Winter. But then they can also see that Winter doesn't have to go on forever. Winter is eventually followed by Spring. In my case, Spring means finding ways to move on and find new sources of identity and creativity.
Of course, this view of the Seasons doesn't remove the pain of loss. Participants still find themselves myself slipping back in Winter from time to time. But now they can see it for what it is . Remembering the loss isn't the end of the world any more. Participants are no longer in a void. They recognize that Winter is a temporary period. They can see that Winter is the natural response of grief to loss. It is a way of recognizing the pain. Being able to talk about the feelings associated with change equips better them to deal with it. The metaphor of the seasons enables them to talk to others about their loss and the feelings associated with it. They have a vocabulary for talking about it. And they see that it's not a perpetual Winter. They know that they will get back to Spring and Summer again. And this knowledge bolsters their confidence and helps them get back to Spring and Summer again sooner than they otherwise would have.
The shift from independence to interdependence
The normal management approach to the loss of identity caused by change -- if anyone ever dares raise the issue -- is to urge employees to “stop living in the past”, “grow up”, and “get over it”. That story had ended. Everybody is meant to have moved on. Everyone is expected to be “independent” and resilient, by putting their loss behind them and never talking about it and in effect denying the reality that it has actually happened. Since the story had ended, there was supposedly no place for it in their lives as “independent” adults. The model of an independent adult was someone who shucked off life’s problems, turned the page and moved on.
The choices presented are thus either (a) morbidly and wrongly living in the past in thinking about the loss, or (b) “moving on” and living in denial that it had ever happened.
The whole model of being an independent adult, who shucks off life’s problems, who turns pages, and forgets about loss and never talks about it with others, is a heroic model, but one that is essentially unlivable. It overlooks the fact that we as human beings are not just independent decision-making animals: we are interdependent. We are totally dependent for the first decade or two of our lives and also totally dependent for the last one or two decades of our lives. Even for the period of our adult lives when our current culture invites us to think of ourselves as independent we are actually interdependent on others for almost everything that makes life possible and worth living – our food, our water, our electricity, our transport, our communications, our language, our books, our entertainment. We are at best interdependent animals.
And nowhere is this more important in the area of dealing with loss and change. When the world is uncaring and unsupportive of the seasons that we happen to be going through, it just makes things worse. The model of independence has implicit within it a view of human nature that is out of sync with the world. The model of independence works moderately well for the season of Summer, for those moments when everything is going well and we are enjoying life with full satisfaction. But life isn’t just about Summer. Life also has inevitable loss and pain in it – i.e. Autumn and Winter.
The independence model is a model designed for perpetually fair weather. It isn’t a good model for human life which is inevitably full not only fair weather but of frequently inclement weather.
The model of independence is a very bad model when it comes to the loss of Autumn or the pain of Winter, when it tells us to “grow up”, and “get over it” and “turn the page”. By denying the reality of the seasons, it makes the pain worse, and makes it more difficult to deal with.
It is when the environment accepts and respects the reality of different seasons in our lives, and recognizes that we are interdependent and needing support and nourishment from our environment that we are better able to cope.
And that’s an interesting dimension of the Seasons for Growth program. It’s about building networks and communities that provide support through the different seasons of life. Providing a supportive metaphor of life that not only helps us to understand the different seasons in our life, and to be able to discuss these issues in a caring and respectful way, but also enables to recognize which season we are in, and think about the kinds of actions that are appropriate to that season, and also providing a supportive environment for others who are going through different seasons in their lives.
Implications for corporate change programs
Corporate change programs could learn from Seasons for Growth by drawing on its principal elements::
• It’s a shift from viewing the world through a linear lens (where stories end and live in a void) to one of viewing the world through a cyclical lens (where the story never ends – it just changes).
• It’s a shift from an unrealistic vision of individuals as heroically independent, able to shuck off life’s losses and pains, to a vision of individuals as inherently interdependent and entitled to support and nurturing as we cope with the transitions of living.
• It offers a helpful metaphor for understanding and coping with the inevitable loss and pain that accompanies all human life, including the changes involved in corporate change programs.
:Learn about Seasons for Growth
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #106
April 1, 2004
Use of humor as a leadership tool
April 1 seems like a suitable date to explore the use of humor as a leadership tool. George W. Bush tried his hand at it on March 24, 2004, at the Hilton Washington, site of the 60th annual Radio & Television Correspondents' Association dinner.
Bush as Entertainer in Chief
President Bush opened his 10-minute remarks to the gathering with a reference to what he referred to as Defense Secretary Donald Rumsfeld's "favorite show" on television which turned out to be . "Queer Eye for the Straight Guy," Bush said.
Bush went on to poke at his own malapropisms before unveiling a slide show titled "White House Election Year Album" that had the crowd chuckling. Yes, there were a few jabs at the Democrats, including a couple of shots taken at Democratic challenger John Kerry.
Mostly, though, he put up dorky-looking pictures of himself. A recurring joke involved photos of the president in awkward positions -- bent over as if he's looking under a table, leaning to look out a window -- accompanied by remarks such as "Those weapons of mass destruction must be somewhere!" and "Nope, no weapons over there!" and "Maybe under here?"
Was Bush's joke funny or effective?
At the time of the joke, a crowd of about 1,500 politicians, journalists and celebrities generally laughed along with the president's presentation.
After the event, Democrats suggested that Bush's comedy skit about the search for weapons of mass destruction was "tasteless and insensitive". Noting that Bush had used the weapons issue to justify a war in Iraq in which nearly 600 Americans have died and more than 3,000 have been wounded, Democrats said the president went too far.
"It's a tragic attempt at comedy, because the price that has been paid for this endeavor has been an enormous one," Sen. Frank Lautenberg (D-N.J.) said in an interview. Lautenberg was among the first Democrats to issue a statement condemning the comments yesterday.
CNN, which ran a tape of Bush's bit on its morning show, reported that it generated critical e-mails from viewers, one of whom called it "stomach-turning."
The correspondents dinner often features the president as a lighthearted after-dinner speaker. That is the spirit in which Bush made his comments, White House spokeswoman Claire Buchan said yesterday: "It's traditional at events like this dinner for the president to poke fun at himself."
She noted that Bush also paid a tribute to the military, including a group of Special Forces troops who buried a piece of the World Trade Center in Afghanistan in tribute to those killed on Sept. 11, 2001.
Democrats and skeptics however appear to have humor theory on their side. The incongruity theory of humor suggests that humor involves not only pointing out an incongruity that in some unexpected way "makes sense": for the joke to be funny, it should suggest a point or moral that is not really dangerous or harmful. By pointing to a series of events that killed and wounded so many Americans and Iraquis, Bush's joke risks sliding over into tragedy, rather than comedy.
Moreover, it has been pointed out earlier in these pages that Bush's better tactic as a humorist is to emphasize humor that is rather intellectual, thus counteracting his image as "not being the sharpest knife in the drawer". By drawing attention to this very issue, Bush's joke risks having his image from being "an amiable dolt" to being "a dangerous dolt".
What are people laughing at?
Thus judging from late-night humor, Bush still wears a dunce cap, while Kerry is portrayed as strange-looking, stiff and humorless.
"President Bush admitted that his prewar intelligence wasn't what it should have been," Jay Leno said. "We knew that when we elected him."
As for Kerry, "his poll numbers are moving, donations are moving, endorsements are moving," Leno said. "The only thing not moving about John Kerry -- his hair. His hair does not move."
The Washington Post suggests that the musings of Jay Leno, David Letterman, Jon Stewart and Conan O'Brien may have as much to do with shaping the candidates' public personas as a ton of newspaper stories, magazine features and cable arguments.
The Center for Media and Public Affairs has divined that Bush remains the biggest late-night target -- the butt of 213 jokes from Jan. 1 through March 9 -- compared with 53 for Kerry. Even in February, when Kerry was surging to the nomination, it was Bush hands down, 121 to 25.
"The president will always be the biggest butt of the jokesters," the center's Matthew Felling says.
But this is one contest where winning amounts to losing: 94 percent of the jokes about intelligence, and 89 percent about honesty, involved the president. Kerry drew nearly half the cracks aimed at a candidate's appearance.
Letterman said of Bush's campaign ads: "In one of the commercials you see George W. Bush for 30 seconds. In another commercial you get to see George W. Bush for 60 seconds. Kind of like his stint in the National Guard."
Leno however was appreciative of Bush's efforts at humor. He said that Oscar nominations had gone to Sean Penn, Jude Law "and, of course, George W. Bush for 'Iraqi Weapons of Mass Destruction.' " Learning from the story of a trainee at Toyota
Is Toyota the best-performing knowledge organization in the world? Some analysts would argue that it is. By the end of last year Toyota was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales. In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors. Given Toyota's performance in terms of quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization, other companies have studied and attempted to duplicate the company’s processes. Several decades ago, General Motors famously spent some $45 billion trying to duplicate its automation processes with little success. The fact that few companies have come close to rivaling its performance suggests that the secret of Toyota does not lie in stories about its processes.
An article in the May 2004 Harvard Business Review, Steven Spear argues that a major part of the reason is that imitators focus on specific tools and practices while failing to recognize the underlying principles of the Toyota approach.
According to Spear's earlier HBR article, Toyota’s much-noted commitment to standardization is not for the purpose of control or even for capturing a best practice, per se. Rather, standardization—or more precisely, the explicit specification of how work is going to be done before it is performed—is coupled with testing work as it is being done. The end result is that gaps between what is expected and what actually occurs become immediately evident. Not only are problems contained, prevented from propagating and compromising someone else’s work, but the gaps between expectations and reality are investigated; a deeper understanding of the product, process, and people is gained; and that understanding is incorporated into a new specification, which becomes a temporary “best practice” until a new problem is discovered.
Spears describes the training of an "American hotshot", who arrived at the company thinking that he already knew the basics of TPS -- having borrowed ideas from Toyota to improve operations in his previous job -- and would simply be fine-tuning his knowledge to improve operations at his new assignment. He came out of his training realizing that improving actual operations was not his job -- it was the job of the workers themselves. His role was to help them understand that responsibility and enable them to carry it out. His training taught him how to construct work as experiments, which would yield continuous learning and improvements, and to teach others to do the same.
Toyota inculcates managers with the Toyota approach in the way it readies recruits for a higher-level position at one of Toyota's U.S. plants. According to Spear's story, the trainee learned four main elements:
• Element #1: “Direct observation”. Toyota employees are encouraged to observe failures as they occur. That includes managers who are required to watch employees work and machines operate. Spears points out how different this is from the usual forms of indirect observation such as reports, interviews, surveys, narratives, aggregate data, and statistics.
• Element #2 “Change is experiment" Toyota expects employees to embed explicit and testable assumptions in the analysis of their work -- all of which managers have to report in detail and with considerable precision. That approach helps reveal gaps between predicted and actual results.
• Element #3: "Frequent experiment" Employees at all levels strive for continuous improvement through quick, simple experiments instead of lengthy, complex ones. The manager’s training is structured so that the complexity of the experiments increase gradually, allowing mistakes without severe consequences, thereby increasing his willingness to take risks and learn by doing.
• Element #4 “Managers coach rather than fix.” Toyota managers enable and direct employees, but refrain from telling them where to find opportunities for improvements. Spears argues that this unusual manager–worker relationship produces a high degree of sophisticated problem solving at all levels of the organization.
It is also striking that Toyota provides the resources to facilitate rapid experimentation. The trainee in Spear's article had the help of a maintenance worker to move equipment, create fixtures, relocate wires and pipes, and provide other skilled trade work so that he could test as many ideas as possible. The supervisors also came to the cell of the machining operation to review the trainee's ideas and gave him tips on piloting his changes before asking support workers to make parts or relocate equipment. When the trainee wanted to rotate some gauges that tested parts, the supervisor showed him how to quickly and inexpensively make cardboard prototypes to test location, orientation, size, and so on. The result of this unusual manager–worker relationship is a high degree of sophisticated problem solving at all levels of the organization.
What is more convincing than the various lessons that the trainee learned in the article is the fact that the article is the story of the training of a single individual - a hotshot in the US environment - encountering the very different approach of Toyota. The learning lies less in the lessons than in the story.
Answer the following:
o Establish the above case in relation to the HRM as a central sub –system and also as the HRM Model.
o Explain the major stages involved in Human Resource Planning?
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #26
Telling the truth to power
________________________________________
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
________________________________________
Organizational and Business Storytelling In The News: Story #26
January 12, 2004: Telling the truth to power
Telling the truth to power has never been easy. Those who attempt it often suffer so badly in the attempt that they never have a chance to reveal what occurred. The fear of further repercussions is an additional reason that accounts of such efforts do not emerge. The rarity of such stories is one of the things that makes the lead article in many newspapers and magazines this weekend so interesting: it concerns the story told by the former US Secretary of Treasury, Paul O'Neill, of his two-year tenure in the Bush cabinet. O'Neill is giving a series of television interviews on Sixty Minutes and elsewhere as advance publicity of a book, The Price of Loyalty, written by the journalist Ron Suskind, based on interviews with and documents supplied by O'Neill.
Time magazine reports: "Rarely had a person who spoke so freely been embedded so high in an Administration that valued frank public remarks so little.... Loyalty is perhaps the most prized quality in the White House. In the book, O'Neill suggests a very dark understanding of what happens to those who don't show it. "These people are nasty and they have a long memory," he tells Suskind. But he also believes that by speaking out even in the face of inevitable White House wrath, he can demonstrate loyalty to something he prizes: the truth. "Loyalty to a person and whatever they say or do, that's the opposite of real loyalty, which is loyalty based on inquiry, and telling someone what you really think and feel—your best estimation of the truth instead of what they want to hear." That goal is worth the price of retribution, O'Neill says. Plus, as he told Suskind, "I'm an old guy, and I'm rich. And there's nothing they can do to hurt me."
Time magazine reports that as the Treasury Secretary fought a losing battle against another round of tax cuts and was surprised to find that he could not even get his longtime colleague, Vice President Dick Cheney, to listen to the arguments. O'Neill had been preaching that a fiscal crisis was looming and more tax cuts would exacerbate it. But others in the White House saw a chance to capitalize on the historic Republican congressional gains in the 2002 elections. In an economic meeting in the Vice President's office, O'Neill started pitching, describing how the numbers showed that growing budget deficits threatened the economy. Cheney cut him off. "Reagan proved deficits don't matter," he said. O'Neill was too dumbfounded to respond. Cheney continued: "We won the midterms. This is our due." A month later, Paul O'Neill was fired, ending the rocky two-year tenure of Bush's first Treasury Secretary, who became known for his candid statements and the controversies that followed them. Rarely had a person who spoke so freely been embedded so high in an Administration that valued frank public remarks so little.
O'Neill pictures the Bush administration as almost exclusively focused on politics, not truth or reason.
According to Suskind's book, ideology and electoral politics so dominated the domestic-policy process during his tenure that it was often impossible to have a rational exchange of ideas. The incurious President was so opaque on some important issues that top Cabinet officials were left guessing his mind even after face-to-face meetings. Cheney is portrayed as an unstoppable force, unbowed by inconvenient facts as he drives Administration policy toward his goals.
The Financial Times' headline is "Bush Savaged by Former Treasury Chief,." as though O'Neill was some kind of wild animal. In fact, O'Neill's account appears to be the sober effort of a man trying to tell the truth as he sees it. The phenomenon of someone describing what actually happens in the Bush White House is such a rarity of course that his account can be characterized as that of a mad, ferocious beast suddenly let loose among a tame population.
It was not always this way. O'Neill sees a big difference between this administration and earlier ones. 'The biggest difference between then and now," O'Neill tells Suskind about his two previous tours in Washington, 'is that our [earlier] group was mostly about evidence and analysis, and Karl (Rove), Dick (Cheney), Karen (Hughes) and the gang seemed to be mostly about politics. It's a huge distinction.'" That's the story that O'Neill tells, which the Democratic opponents of the White House are happy to support.
Not surprisingly, the White House is telling a different story. According to their story, "it wasn't just that O'Neill was impolitic, they say; his statements had real consequences—roiling currency markets and Wall Street. What O'Neill would call rigor, Bush officials say, was an excessive fussiness that led to policy gridlock and sniping within the economic team." Said another 'senior official' according to CNN: "We didn't listen to [O'Neill's] wacky ideas when he was in the White House, why should we start listening to him now?"
Whose story is a more correct represenation of what actually happened in the White House? Whatever the eventual judgement of history, it is clear that O'Neill has set off a massive new round of storytelling about how decisions were made, and are being made, in the White House, that will reverberate throughout the coming election year and possibly have an impact on the outcome.
Go to the article in Time
Go to the article in the Financial Times
Go to the article in the CNN
.
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Organizational and Business Storytelling In The News: Story #18
January 4, 2004: Barrons applies virus story to job loss
How do you dislodge the widely held but wrong notion that American jobs are “fleeing overseas”? Rational arguments haven’t worked. Politicians continue to make hay by promising to end job flight. The misguided notion is that the US only has a certain number of jobs and politicians must guard them zealously against raids from cheap foreign labor. In addition to protecting factory jobs, now there's a move to circle the wagons around a new target -- white-collar work performed by the folks with advanced degrees.
So this morning Gene Epstein Barrons tries a virus story – a satire – in an effort to dislodge the misguided notion:
• “Rarely have so many been asked to protect the privileges of the few.”
• “If the scarce reserve of skilled jobs that can only get drained by developing nations, why didn’t the U.S. run out of them a long time ago?”
The article by Gene Epstein goes on to give the detailed reasons why jobs have grown rapidly and will continue to grow rapidly, despite the job flight. Whatever has been "stolen" by cheap foreign labor is nothing compared with the long history of grand larceny from new technology, rising productivity and changing tastes. But since human desire has no limit, there's always an infinite amount of work to be done. And in this market economy, an abundance of new opportunities.
Most of the article is about the cold graphs and figures, which haven’t worked in the past. The the persuasive force of the piece is likely to depend more on these succinct satirical stories.
Go to the full story in Barrons (may require a subscription)
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #19
The story of the economy
________________________________________
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
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Organizational and Business Storytelling In The News: #19
January 5, 2004: Post: “Growth hot, jobs & inflation not”
What’s the story of the US economy? The lead article this morning in the Washington Post reflects the consensus story among economists: “Growth is Hot, but Jobs and Inflation are Not.”
According to the article written by John Berry:
“the headline on the 2004 forecast from Macroeconomic Advisers last month summed up this year's outlook succinctly. In the St. Louis forecasting firm's view, and in that of the vast majority of other private and government economists, the belated recovery from the 2001 recession finally but firmly established itself in the second half of last year, and solid growth should continue throughout 2004. “
Note that the economy is making a “belated” recovery, but has now “finally but firmly established itself” and that “solid” growth will continue. If you thought that economists restricted themselves to the facts, think again. What they are doing here is telling a story with all the emotional accoutrements of storytelling included.
The political implications of the emerging story are fairly obvious. The risk for President Bush – and the hope for the Democrats – is whether by Election Day there will have been enough payroll jobs created for President Bush to escape being the first president since Herbert Hoover to see fewer payroll jobs at the end of a term than at the beginning. In November, there were 130.2 million such jobs, 2.3 million fewer than when Bush took office in January 2001, as Democratic presidential hopefuls repeatedly have pointed out.
In this national economic framework, individual households' experiences will vary widely, as they always do. But broadly speaking, here is the outlook for some of the trends that will affect them:
• Democrats will point to the fact that in the final three months of 2002, more than 7 million payroll jobs disappeared at firms that either cut their rosters or went out of business.
• Republicans will point to the fact that almost the same number of jobs were created at expanding firms or companies that opened their doors for the first time during those months and that there are far more job opportunities appearing all the time than the small month-to-month changes in payrolls imply.
However the bottom line for the election will be, not this fact or that fact, but guess what? A story! : What’s the story of the economy? For now, the story is mixed, and summed up in the headline, “Growth hot, inflation and jobs not.”
Go to the original story in the Washington Post
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(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
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organizational storytelling Organizational and business storytelling: story #20
How a story will change US Army
________________________________________
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Organizational and Business Storytelling In The News: #20
January 6, 2004: How A Story Will Change the US Army
Can a simple story change the US Army? This morning’s top story in the Wall Street Journal shows that even the most powerful army in the world is no match for a story. The story concerns a company that, if there were an annual prize for the world’s most despised company, Halliburton would have been the runaway favorite in 2003. Now it is getting a running start on 2004, with huge implications for how procurement is carried out in the US Army.
The Wall Street Journal reports that the Army in a previously undisclosed December 19 ruling, has quietly exonerated Halliburton of any wrongdoing in a Kuwait fuel-delivery contract that Pentagon auditors asserted has overcharged the U.S. government by more than $100 million. Neil King Jr. reports that the head of the Army Corps of Engineers, Lt. Gen. Robert Flowers, has discreetly relieved Halliburton of the need to provide "any cost and pricing data" pertaining to a no-bid contract to deliver millions of gallons of gasoline from Kuwait to Iraq.
The earlier news of overcharging had caused widespread outrage. Even Army President Bush has said that if Halliburton had overcharged for the fuel, he expected the company to repay the money.
In a gross understatement, the Wall Street Journal reports that the current story “is sure to draw scrutiny on Capitol Hill.” In all likelihood, the waiver will set of a storm of political posturing and greatly intensify the pressure to change the rules of the game by which the Army pays huge amounts to private contractors.
Even before this news, James Surowiecki has written in the New Yorker, (January 5, 2004) that Halliburton “was the designated villain for those who believe that the United States went to war for oil. Its connection to Vice-President Dick Cheney, who ran the company between 1995 and 2000, inspired cries of cronyism when it won the contract to repair Iraq’s oil fields without submitting a bid.”
While Surowiecki finds “little evidence of chicanery in the bidding process for Iraq contracts,” he notes that the scale and scope of the private sector involvement in the Army’s activities is unprecedented and needs change.
This morning’s story is bound to accelerate that change – just another illustration of the impact of a story on the real world – in this case, the powerful US Army.
For this morning's story, go to the Wall Street Journal.
For James Surowiecki's story, go to The New Yorker
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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organizational storytelling Organizational and business storytelling: story #21
Story Removes Brokers'
Incentive for Integrity
________________________________________
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Organizational and Business Storytelling In The News: Story #22
January 8, 2004: False Story Launched A War
Can a false story launch a war? Apparently, because the top headline in the Washington Post today confirms in detail what many long suspected: "Iraq's arsenal was only on paper",
According to the article written by Barton Gellman, the story that was put forward as the main justification for the war in Iraq, and that convinced the majority of the US population to support the war, and that ended up killing by 449 US/UK soldiers (to date), wounding tens of thousands of US/UK soldiers, and killing at least 7,960 Iraqi civilians (to date) as well as an uncounted number of Iraqi solders dead, and costing hundreds of billions of dollars, was false.
According to the Post, the nine-month record of some 1400 arms investigators since the fall of Baghdad involved a massive effort to show that the original story was true. The outcome includes discoveries of other concealed arms research, most of it less advanced. Iraq's former government engaged in abundant deception about its ambitions and, in some cases, early steps to prepare for development or production. Interviews here -- among Iraqi weaponeers and investigators from the U.S. and British governments -- turned up unreported records, facilities or materials that could have been used in unlawful weapons.
But investigators have found no support for the two main fears expressed in London and Washington before the war: that Iraq had a hidden arsenal of old weapons and built advanced programs for new ones. In public statements and unauthorized interviews, investigators said they have discovered no work on former germ-warfare agents such as anthrax bacteria, and no work on a new designer pathogen -- combining pox virus and snake venom -- that led U.S. scientists on a highly classified hunt for several months. The investigators assess that Iraq did not, as charged in London and Washington, resume production of its most lethal nerve agent, VX, or learn to make it last longer in storage. And they have found the former nuclear weapons program, described as a "grave and gathering danger" by President Bush and a "mortal threat" by Vice President Cheney, in much the same shattered state left by U.N. inspectors in the 1990s.
A review of available evidence, including some not known to coalition investigators and some they have not made public, portrays a nonconventional arms establishment that was far less capable than U.S. analysts judged before the war.
The threat, as the headline more bluntly puts it, was "only on paper." Yet that false paper story was enough to launch a war that cost tens of thousands of lives and hundreds of billions of dollars. Just another illustration of the power of storytelling.
Related Financial Times story: "White House 'distorted' Iraq threat"
The lead story in the Financial Times this morning cites a study from the Carnegie Endowment for International Peace that concludes that not only was the story false: the White House deliberately distorted it. Thus though the long-term threat from Iraq could not be ignored, it was being effectively contained by a combination of UN weapons inspections, international sanctions and limited US-led military action.
According to the article written by Stephen Fidler in the Financial Times, it wasn't only that the story was false: the White House deliberately distorted it in three main ways.
• They presented nuclear, biological and chemical weapons as a single WMD threat, lumping together the high likelihood that Iraq had chemical weapons with the possibility that it had nuclear weapons, a claim for which there was no serious evidence.
• The administration also insisted without evidence that Saddam Hussein, the former Iraqi leader, would give WMD to terrorists.
• Finally, officials misused intelligence by "wholesale dropping of caveats, probabilities and expressions of uncertainty present in intelligence assessments from public statements," it says.
The report says the White House approach to the war was based on what it called "worse case reasoning", assuming that what intelligence agencies did not know was worse than what they did know. "Worst-case planning is valid . . . [But] acting on worst-case assumptions is an entirely different matter."
Carnegie is regarded as a moderately left-of-centre think-tank. It opposed the war, saying Iraq's disarmament could be achieved via inspectors, if necessary backed up by force. Mr Cirincione, director of Carnegie's non-proliferation project, said the report, which took more than six months to compile, was based on hundreds of documents and dozens of interviews with specialists, former weapons inspectors and current and former US officials.
Go to the article in the Washington Post
Go to the article in the Financial Times
.
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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home | learn organizational storytelling | understand knowledge management | contact me | get my bio
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Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #23
IMF Foresees Risk of Meltdown
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Organizational and Business Storytelling In The News: Story #102
March 28, 2004
Road safety program launched without compelling story
In an earlier page, on March 15, 2004, it was noted here that in rational terms, road traffic deaths in the US represent a much greater threat to human life than other man-made causes such as terrorism. However, without a compelling narrative, any effort to do something about this massive problem would be unlikely to succeed.
New road safety program announced
On March 28, it was announced that the US Transportation Secretary Norman Mineta is attempting exactly that. He is pushing an ambitious plan to cut the rate of traffic deaths by a third over the next four years, yet without any compelling story.
The program is completely reasonable: if successful, the program could save as many as 13,000 lives a year. There were 42,815 traffic fatalities in 2002, the latest year figures are available.
The emphasis on safety comes as annual traffic deaths are up since 1992 — a reversal of the steady downward trend during the 1970s and 1980s.
Mineta goes on about goals and plans in a fully rational fashion. "In the past, we have talked about safety being the number one priority," Mineta says. "Now we have a very specific goal we are trying to attain."
"It's a very difficult goal to meet," says Judith Lee Stone of Advocates for Highway and Auto Safety, a lobby group for insurers, health companies and consumer groups. "But you can't fault the secretary," she says. "You set goals and try and do it and just chip away."
Mineta wants to reduce the fatality rate from 1.51 deaths per 100 million vehicle miles traveled within four years to 1.0 deaths per 100 million vehicle miles.
Achieving that fatality rate, even as the number of miles driven continues to climb, would mean 30,000 deaths in 2008 — nearly 13,000 fewer than in 2002 and the lowest number of annual deaths since records have been kept.
The major focus will be on three areas:
• Seat belts. Mineta wants to increase the use of seat belts to 90% from the current 79% through stricter laws. That could save 3,200 lives a year, according to the Department of Transportation.
• Drunken driving. Nearly a third of all alcohol-related deaths involve repeat drunken drivers or drivers with blood-alcohol levels that are at least twice the legal limit. Mineta wants courts to impose jail sentences or force treatment for "hard-core" drunken drivers. That could save up to 7,000 lives a year, according to the Department of Transportation.
• Truckers. Regulations implemented in January limit the hours truckers can spend driving. For example, long-haul truckers can be on duty 11 hours, but only after being off duty for 10 hours. It was the first change in 60 years in how many hours truckers can be on the job at one time.
Is the program broad enough?
No one opposes the idea of improving safety, but many highway officials and safety advocates question whether the goal is attainable and whether the focus is on the real causes.
Jonathan Adkins of the Governors Highway Safety Association says the effort needs to be broader than "belts and booze." Speeding, aggressive driving and other problems should be included. "If you put a seat belt on some maniac doing 100 miles an hour, he won't survive a crash," Adkins says.
Most of the safety initiatives require the cooperation of local authorities: legislators to enact tougher laws, courts to enforce them and transportation officials to develop educational programs.
Clearly a broader set of measures would be more likely to succeed if it could be implemented. But that's a big "if". The deeper problem is that neither a narrow program or a broader program is likely to be implemented with much vigor unless there is a compelling narrative or narratives that would get people moving. Reason by itself won't get the job done.
The need for a springboard story
Unfortunately Mineta's rational approach to getting change is highly unlikely to work. People will look at the goals and the reasons and go on doing what they are already doing -- and the high level of road deaths will continue. There will be no energy, no dynamism, no excitement that the program can actually succeed -- and ought to succeed.
What is needed is a story that will spring people into a realization that they can and should do something about the high level of deaths. The need is to find a story or stories that reflect efforts -- somewhere -- to address the problem that have already been successful, showing that the problem can be dealt with. It would be preferable if the story could be about a success case in the US. But if this example isn't available, then the success story in the closest analogous situation to the US should be chosen. Sweden is one possible example that might be used, as outlined in the earlier page.
Bottom line
The rational arguments that Secretary Mineta is using to launch his program may all be sound and valid. The problem is that arguments merely lead to more arguments, not action. When significant changes in behavior are needed, reason by itself leaves people passive. It doesn't 't lead to action. In order to get action, you need -- a compelling narrative.
Read USA Today
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
Organizational and Business Storytelling In The News: Story #98
March 24, 2004
New Mercedes ad campaign features customer stories
Mercedes' new ad campaign doesn't use beautiful shots of cars racing down a winding road or exalt the latest lease offer. It doesn't even show new products. Instead, Mercedes-Benz is turning to that age-old communication device - the story. The campaign, starting next Monday, uses photos sent in by Mercedes-Benz owners and short vignettes of real drivers
Created by Merkley & Partners, part of the Omnicom Group, the campaign, under the tagline "Unlike Any Other," features three television commercials and their two-dimensional print counterparts.
One ad, called "Faithful Vignettes," features short clips of people with compelling stories to tell about their cars. The ad quickly moves from a veterinarian and scientist in Africa and his 22-year-old G-Class S.U.V. to a family that survived a head-on collision in a 2003 E320. It ends with a couple that have driven their 1970 280SE more than a million miles.
The other two ads tell the story in pictures, "Framed Portraits" and "Multiple Portraits," feature dozens of photos of owners who responded to a newspaper ad Mercedes placed in February asking for photos they had taken with their cars. Mercedes ended up with more than 1,000 photos from consumers. "Framed Portraits" is set to a slow ballad sung by the relatively unknown singer Mozella. The ad ends with the words: "The love never fades." "Multiple Portraits" is set to much faster paced techno-music and ends with the words "No one every poses with their toaster."
Mercedes' reflective "soft sell" ads come at a time of intense competition in the luxury automobile market. In 2003, Mercedes was within a few thousand units of being overtaken by General Motors' emboldened Cadillac brand for the No. 3 spot in the luxury segment behind Lexus and BMW. Sales of Infiniti, meanwhile, grew 35 percent last year, according to Ward's AutoInfoBank, to 118,655 units on the strength of its new G35 sedan and coupe. Mercedes sales were up 9.6 percent in 2003, to 218,717 units.
Mercedes is also battling a blow to its once-sterling reputation in quality and reliability. Mercedes has been plagued by quality problems that not only knocked it off the top of a J. D. Power initial quality rating last year, but also pushed it down to No. 15, which is just above the industry average. Earlier this year, the influential Consumer Reports' annual auto issue ranked Mercedes, along with BMW, Volvo, Jaguar and Audi, below average for reliability.
"The reputation of the Mercedes brand has bought them some time to address the quality problems," said Susan Jacobs, president of Jacobs & Associates, an automotive research firm in Rutherford, N.J. in the New York Times. "They seem to be stepping up to the issues. So I haven't scaled back my estimates for Mercedes sales in 2004."
While the new campaign does not directly address the brand's reliability and quality concerns, it draws heavily on Mercedes' traditional reputation for durability. Many of the cars featured in the photographs are decades old.
"Our authenticity, our heritage and the pride people have in Mercedes, those are all huge comparative advantages for us," Ms. Cervantez said in the New York Times. She once oversaw the Lincoln and Jaguar brands at the Ford Motor Company before joining Mercedes in March 2003.
The stories in the ads try to draw on the Mercedes heritage.
Read the New York Times
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Organizational and Business Storytelling In The News: Story #95
March 21, 2004
Stories spoil Dasani launch for Coke in the UK
According to the Coca-Cola Bottling Company, Dasani is its answer to health complaints about its sugar-rich caffeine-laced drinks. Dasani is promoted as pure water, cleansed by a "highly sophisticated purification process... based on Nasa spacecraft technology". Coca-Cola sells more than 200 million cases of Dasani annually around the world. Dasani is currently being launched in the UK with a £7m marketing push. While things are supposed to go better with Coke, things in the UK are going from bad to worse with Dasani.
Stories emerge about Dasani
First, the story emerged that the water used in Dasani in the UK came from ordinary tap water, piped into its factory by Thames Water, leading to widespread derision of the product.
Then this story was compounded by news that the firm's "highly sophisticated purification process", allegedly based on some super-sophisticated spacecraft technology, was in fact no more than reverse osmosis used in many modest domestic water purification units.
Then on Friday, the story took an even worse turn: it emerged: that the entire UK supply of Dasani was being pulled off the shelves because it has been contaminated with bromate, a cancer-causing chemical.
According to The Guardian, the whole story of what Coke does goes something like this:
• take Thames Water from the tap in your factory in Sidcup, Kent;
• put it through a purification process,
• call it "pure"
• give it a mark-up from 0.03p to 95p per half litre;
• in the process, add a batch of calcium chloride, containing bromide, for "taste profile";
• then pump ozone through it, oxidising the bromide - which is not a problem - into bromate - which is.
• finally, dispatch to the shops bottles of water containing up to twice the legal limit for bromate (10 micrograms per litre)."
The Drinking Water Inspectorate confirmed yesterday it had checked the water supplied to the factory by Thames Water and found it free of bromate. In other words, Dasani is less healthy than regular tap water, but at more than thirty times the price.
Bromide is a naturally occurring trace chemical which has a sedative effect. It is said to have been added by the British army to soldiers' tea during the second world war to dampen down their lust. But when it is oxidised into bromate it becomes "a pretty nasty carcinogen", according to David Drury, one of the principal inspectors for the DWI.
The bromate problem is a consequence of added ingredients supplied by Coca-Cola in the same way that it supplies syrupy concentrate to bottlers for them to make cola.
Impact of the story
Coca-Cola Enterprises said optimistically that the recall would not affect its balance sheet. The company said it had already tested its Dasani water in North America and found "no issue at all" concerning bromate. It said this incident should not hurt the Dasani water brand as "consumers will understand the facts that this is an isolated incident . . . and it won't have implications outside the UK". The withdrawal began on Friday and was likely to be 80 to 85 per cent complete within 24 hours.
The Financial Times however suggests that Coke's ambitions for the UK may now be unrealisable.
Allyson Stewart-Allen, a London-based marketing adviser, said in the Financial Times: "It is now going to be next to impossible for Coke to relaunch Dasani in the UK."
Neil Hedges, chairman of Fishburn Hedges, the public relations and corporate reputation consultancy, also felt a UK relaunch "may be just too much for such a new product." This is in spite of the fact that Coca-Cola has followed best practice in product recalls by acting swiftly.
According to the Financial Times, analysts at JP Morgan and Morgan Stanley both questioned the viability of the company's plan to launch Dasani in other European countries. But Coca-Cola said it still plans to launch Dasani on April 19 in France, the most sophisticated bottled water market in the world.
Unlike the UK, the variety of Dasani to be sold in France is a genuine mineral water. Paul Gordon, president of Coca-Cola France, said: "The arrival of Coca-Cola in the bottled water market in France is as important to the company as the launch of Coca-Cola light [as Diet Coke is known] in 1988."
Bottom line
Coca-Cola's hope that consumers would see the succession of negative stories as unimportant is not shared by the financial analysts in respect of the situation in the UK. Once a set of stories like these emerge and receive considerable publicity, they tend to stick in consumer's minds as indelible memory of the kind of product Dasani "really" is. Thereafter Coca-Cola can produce all the facts that it wants to, and these facts may all be 100 percent reliable. But the negative brand narrative that has now been created about Coke's unreliability in respect of Dasani will be very difficult to dislodge, at least in the UK..
Read The Guardian
Read the Financial Times (1)
Read the Financial Times (2)
Organizational and Business Storytelling In The News: Story #93
March 19, 2004
Shell revises the story of its reserves - yet again
Royal Dutch/Shell seems to have a problem in storytelling. In January, it changed its story about its reserves and reduced them by 20%. Six weeks later the CEO was fired and multiple investigations were launched into the causes of the revised story. On Thursday, a storytelling problem emerged and it cut its oil and gas reserves yet again. The reduction was much less, but the fact of a further revision in its story is a fresh blow to investor confidence, and U.S. regulators have announced that they have stepped up legal probes into the debacle. Shell shares in London fell by about 3 percent as a result of the new story.
The cockroach theory
The new adjustment is much smaller than the January change, but it is even more problematic, because it includes reserves from Norwegian field Ormen Lange that were identified as bookable only a few weeks ago -- after the January admission. The new head of Exploration and Production (EP) said he was surprised, disappointed and embarrassed by the new problems, which occurred despite strict new booking guidance to engineers.
"This means about a quarter of what they've booked for 2003 goes into non-proven reserves," said one trader. "Terrible."
Investors fear what else might be around the corner. "You develop the cockroach theory," said James Halloran of U.S.-based National City Wealth Management Services, quoted in Reuters. "Where there's one cockroach, you're going to find more. You've now been twice bit."
Shell said the latest reserves downgrade would add $20 million to costs for last year on top of a $96 million charge for the original cut. These amounts are small for a company that makes more than $10 billion a year of net profit. Analysts want re-assurance that a big oil company still has lots of oil.
"There's a limited immediate financial effect, but the real point is what it tells you about their future potential," said Brendan Wilders, analyst at Oriel Securities.
False stories were aimed at protecting Nigeria
In an even more startling development, the New York Times reports this morning that the false stories that Shell issued about its reserves were not mistakes or accidents: the Royal Dutch/Shell Group has kept secret important details of its sharp reduction in oil and gas reserves, particularly in Nigeria, for fear of damaging its business relationship with the government there and the Nigerians' desire to produce more oil, internal company documents show.
While Shell has acknowledged that the biggest adjustments in reserves include those in Nigeria, it continues to conceal the extent of its problems. But confidential documents from late last year show Shell concluded that more than 1.5 billion barrels, or 60 percent of its Nigerian reserves, did not meet accounting standards for "proven reserves."
The scale of the revision is important because Nigeria is a significant source of oil for Shell and the country is seeking to increase markedly its production quota within the Organization of the Petroleum Exporting Countries. The size of proven reserves is a basic consideration when OPEC sets quotas for its members. At stake for Nigeria are billions of dollars in revenue annually.
Shell disclosed two months ago that it had overstated its oil and gas reserves by 20 percent, which is equivalent to 3.9 billion barrels of crude oil. On Thursday, it pared its reserves by the equivalent of 250 million barrels more, most of that involving a natural gas field off Norway. Shell also postponed the publication of its 2003 annual report for two months to complete a review of its oil and gas assets.
The oil company's executives are acutely aware of the potentially explosive political effect of their cutting the estimates of Nigerian reserves. A report dated Dec. 8, 2003, and prepared for senior executives by Walter van de Vijver, then the top official for exploration and production, recommended that the revised Nigerian reserves remain "confidential in view of host country sensitivities."
So far, Shell has not released a country breakdown of its reserve restatements, but it told analysts last month that Nigeria and Australia were the two largest. Company documents show that Shell's senior managers were told in December that 720 million barrels in Nigeria were "noncompliant" with guidelines established by the Securities and Exchange Commission, and that a further 814 million barrels were "potentially noncompliant."
Why has the story changed?
The Shell documents, including the December report, show that geology is just one part of determining whether oil or gas is a proven reserve. A producer must also have firm plans to extract the resource and be ready and able to make the investment to carry out those plans; the absence of such commitments, the documents showed, was the main reason most of the Nigerian reserves did not meet the definition of "proved."
Mr. Corrigan, the Shell spokesman, said that "government funding has been a constraint, not Shell's willingness to fund."
From Nigeria's perspective, the foreign oil companies are partly to blame for the slow pace of meeting reserve targets because they "are sitting on large tracts of undeveloped acreage," according to Shell's understanding of a growth plan prepared by Funsho Kupolukun, who functioned as an adviser to Nigeria's president and who now manages the national oil company.
There are more than financial issues behind the decline in reserves. "Community disturbances and political instability" were also to blame, according to the Shell report. Most of Nigeria's oil reserves are in the delta region in the south, where unrest forced the company to reduce production last year.
Shell faced international criticism from human rights groups after the execution in 1995 of Ken Saro-Wiwa, a Nigerian environmentalist who organized demonstrations to demand that Shell and other energy companies reduce oil spills and pollution, and hire more local people. Shell decided to pay more attention to its civic responsibilities, but challenges remain.
"It's a very challenging environment for Shell in Nigeria," said Alex Vines, head of the Africa program at the Royal Institute of International Affairs in London.
The impact of the Shell story
By reducing its estimates of reserves, the physical world hasn't changed. What has changed is the story about those reserves. It's the story that enables investors to determine how much money Shell can make over certain periods and how busy it can keep its refineries. No matter how "challenging" the environment is in Nigeria, if it is confirmed that Shell was telling stories to the world about the reserves which its executives knew to be false, Shell will have misled investors and not only reduced its market value but also exposed itself and its executives to civil and possibly criminal lawsuits. The succession of unexpectedly negative stories causes financial markets to fear that more bad news may be on the way..
Read Reuters
Read the New York Times
Organizational and Business Storytelling In The News: Story #92
March 18, 2004
Microsoft and the EU do battle with competing stories
It is not often recognized the conflict resolution aspect of the legal profession is almost entirely absorbed in competitive storytelling, as each side tries to convince the other, or the judicial authority, of the factual accuracy of its story and its relationship to whatever norms are alleged to be governing the issues in question. Vast sums of money are spent in efforts to tell the winning story, and even vaster sums of money can hang on the outcome of the storytelling competition. Corporate and individual futures may also depend on the result.
Microsoft's story vs the European Union's story
This morning's top business news around the world concerns the epic struggle as to whether European Union will "sanction" the giant Microsoft Corporation for its alleged anti-trust practices, i.e. formally issue the story that Microsoft has broken the law and require Microsft to pay a substantial fine.
In a last-ditch move to secure EU deal, Microsoft told a new story on Wednesday: it offered to include its rivals' programs on personal computers sold throughout the world, as part of a last-ditch attempt to solve its antitrust fight with the European Commission.
But as of Wednesday night, Mario Monti, competition Commissioner, had yet to accept the offer, despite a second meeting in two days with Steve Ballmer, chief executive of Microsoft. Monti was understood to be considering the issue overnight after a day of talks with Microsoft.
Monti now faces the dilemma of whether to accept Microsoft''s story promising concrete measures offered by Microsoft or formally tell its own story that the company has broken European law, so setting a historic precedent. He could inform the company as early as today Thursday, although the formal decision is scheduled for March 24.
Mr Ballmer is keen to avoid the Commission issuing the formal story that Microsoft has broken the law, since this story could set a precedent for a series of potential cases throughout the EU and perhaps beyond, with more legal problems for Microsoft.
On Monday, the European Union's 15 member states on Monday backed the Commission's case against Microsoft's alleged abuse of its Windows monopoly, making a formal decision against the software giant even more likely. Several big member states, led by Britain and Germany, are said to have called for the Commission to make a formal decision telling their story rather than reach a last-minute deal.
At a news conference today, Thursday, it was apparent that the talks had broken down. Monti said he decided "competition and consumers will be better served with a decision that creates a strong precedent. It is essential to have a precedent that will set clear principles ... for the future conduct of a company with such a strong dominant position in the market," he said.
The European Commission's draft ruling is said to accuse Microsoft of monopolistic abuse related to the way it bundles digital media-player software with Windows and for the limits on how much of Windows computer code it shares with rival makers of software for low-end servers. Monti reportedly wants Microsoft to offer computer makers a version of Windows without its Media Player to give rivals like RealNetworks a better shot at getting onto consumer desktops. He also would demand that Microsoft share with rivals more of the code for Windows to improve so-called interoperability with competing networking software made by Sun Microsystems and others. Monti is insisting insisted a settlement go beyond the draft ruling to include Microsoft's business tactics.
For Monti, the decision to press ahead doesn't assure that its story will ultimately prevail, at least any time soon. Only last week, the European Court of First Instance proposed to hear in May GE's appeal of the commission's 2001 rejection of the acquisition of Honeywell. But a long fight clearly didn't deter Monti, who has the political backing of EU member governments in this case. Recent court decisions have curtailed the commission antitrust rulings, but those mostly dealt with European companies, and specifically pricing matters. Microsoft, like Coca-Cola or McDonald's, , is a particularly American brand and one evocative of U.S. global domination, which could result in a different treatment in the courts.
Bottom line: an epic storytelling contest
A large number of countries and the giant Microsoft Corporation are thus involved in a massive struggle over whether the European Union will formally tell its story that Microsoft has broken the law, or whether Micrsoft's story about its future conduct will cause the European Union to refrain from formally telling its story. If one were to ask the participants in this debate, "What's the value of a mere story?" they would probably say not much. They would probably say that the struggle was about antitrust or about policy or about justice or any number of other abstractions.
Yet here they are, eyeball to eyeball, legal team against legal team, in an epic struggle over which story is going to be told and by whom. Thus although the participants are aware that their struggle has vast financial and political implications, they show no sign of being aware that the activity they are engaged in is competitive storytelling.
Read the Financial Times
Read the Wall Street Journal
Organizational and Business Storytelling In The News: Story #89
March 15, 2004
Rational vs narrative angst: terrorism vs cars
The horrible toll of death and injury from last week's terrorist bombing in Madrid gives pause for thought about the fragility of human life, while at the same time affording us the rational comfort that in terms of statistical risk,terrorism poses virtually no threat at all.
Thus Nicholas Kristof in the New Yort Times notes that in a typical year terrorism claims virtually no U.S. lives — with horrific exceptions like 2001. Compared to this, Kristof notes that there are much more imminent risks from more familiar and seemingly unthreatening phenomena.
Thus the cars that we love so much kill 43,000 people in the US each year.
Flu kills 36,000 per year.
Guns kill 26,000 people.
Even good old food kills 5,000 people a year.
And terrorism is down near zero in an average year. Even in a horrific year like 2001, it was less dangerous than food.
So why are so mesmerized by terrorism when other much bigger risks get no attention at all?
Similarly, why was the Washington DC area almost paralysed a year ago when two snipers killed a handful of individuals at random, when the statistical risk of being affected was much smaller than any of these bigger but more familiar risks?
Our fear of terrorists seems only remotely connected with the rational possibility that terrorists could get hold of a nuclear weapon that might kill millions. Even an event like the Madrid bombings would, if it occurred in the US, undoubtedly paralyze and traumatize the country yet again.
Kristof notes that the road toll translates into 117 deaths a day or 3,500 a month. If the deaths occurred in one big accident that killed 3,500 at one time in each month, the it is likely that some action would ensue. If plane crashes were killing 117 people a day in single accidents, there wouldn't be a plane in the sky until something was done about it. But we stare at 117 people dying each day on the road without blinking an eye.
It's not that nothing can be done about road deaths. Sweden has reduced traffic deaths by encouraging seat belt use, converting intersections to traffic circles (they "soothe" traffic), replacing rigid guardrails with new rails or cables that absorb or "catch" cars, and exhorting cyclists to wear helmets. The upshot is that Sweden 's accident rate is one of the lowest in the world. If the United States could achieve Sweden's current standard, this would save 12,500 lives per year. There is however no political momentum behind doing anything of the kind.
Terrorism, by contrast, which kills relatively few people compared to road accidents is the centerpiece of the political debate, and mobilizes immense expenditure and effort to deal with it.
What's the difference?
Earlier in this series, we noted the work of Nobel-Prize-winner Daniel Kahneman who since 1970 has been documenting the predominance of intuitive thinking over rational thought processes. Contrary to the standard picture of man as a rational animal, Kahneman’s research showed that most of our thinking is fast, associative, governed by habit and emotionally charged: even people who have been trained for many years in statistics and risk analysis to think analytically make the same mistakes. Storytelling is our way of connecting with these intuitive, associative mental processes.
It would thus be easier to craft a compelling story about an accident that killed 117 people in a single day or 3,500 in a single monthly accident than it is to craft a story that would wake people up to the rational fact that getting into a car is about the dangerous thing we do every day.
The stories associated with terrorists or snipers are fresh and unexpected: it is easy to put together a story about them that gets people alarmed and compels action.
The stories associated with daily road accidents have become blah. Until we can connect the horrific death toll associated with cars with more powerful narratives, it seems unlikely that anything will be done about this massive social problem, about which any rational analysis should compel action.
Read the New York Times
Read more about Daniel Kahnemann's work in strategy+business
Organizational and Business Storytelling In The News: Story #86
March 12, 2004
The story of the terrorist bomb attacks in Spain
The top story around the world today -- business and non-business -- is the news of the terrorist acts in Madrid. Ten bombs tore through trains and stations along a commuter line at the height of Madrid's morning rush hour Thursday, killing 190 people and wounding 1,200 others before this weekend's general elections. The attacks inspired world-wide feelings of horror at the news of such a large number of premeditated murders.
Information vs knowledge: who was responsible?
The news of the attacks was clearly information -- a large number of people had been killed or wounded. But who was behind the attacks? In the absence of an explanation of who was behind the attacks, it was hard to say that we had any solid knowledge of what was going on, or what the implications of it were.
The Spanish government was quick to conclude that that the the bombings had been orchestrated by members of the armed Basque separatist group ETA. As the attacks came just three days before Spain's general elections, it seemed plausible on the spur of the moment to assume that the attack was part of ETA's 36-year campaign to win independence from Spain for the Basque region, even though the attack is unlikely to help the ETA and in fact will likely galvanize public support for the ruling center-right Popular Party in its fight against Basque terrorism.
By the evening in Madrid however, the story had begun to change. Arnaldo Otegi, the leader of Eta's outlawed political wing, Batasuna, said he did not think the group was responsible, suggesting that "sectors of Arab resistance" may have been behind the attacks. And the way in which today's rush-hour bombings were carried out bears few similarities with Eta's previous modus operandi.
Thus the view emerged that the attack could be the work of al Qaeda. This possibility received some corroboration when police found a van with detonators and an Arabic-language tape with Koranic verses in the town of Alcala de Henares, 15 miles east of Madrid. Neighbors tipped police, who found seven detonators and the tape on the front seat of the van, Mr. Acebes told a news conference. Three of the four trains bombed Thursday originated in Alcala de Henares and one passed through it, the state rail company Renfe said.
Moreover, the Arabic newspaper Al-Quds al-Arabi faxed the Associated Press's Cairo office a claim issued in the name of al Qaeda claiming responsibility for the attacks. The five-page e-mail claim, signed by the shadowy Brigade of Abu Hafs al-Masri, said the brigade's "death squad" had penetrated "one of the pillars of the crusade alliance, Spain."
On Thursday night, Interior Minister Angel Acebes said that all lines of investigation were still open. A U.S. intelligence official, speaking on condition of anonymity, said, "It's too early to tell. We're not ruling anything out." France raised its anti terrorism alert Thursday night, with Prime Minister Jean-Pierre Raffarin's office saying more soldiers would patrol public transport.
The question of responsibility is central to determining the story's implications. If the attacks were a matter of internal Spanish politics, they could be ignored by other countries -- none of our business. But if they were the work of al Qaeda, then they were a reminder that global terrorism is still alive and dangerous, and clearly demonstrating a capability to launch deadly attacks elsewhere.
The global financial impact
It is interesting to note that news of the bombings per se, horrible as they were, had no effect on world financial markets. The bombings occurred around 8am in Madrid or 2 am Eastern Standard time in the US, and for much of the day the US stock market remained flat. The story that the Spaniards were once again throwing bombs at each other, was regrettable, but of little wider significance.
Everything changed however when the story changed. When the new story emerged with al Qaeda as a possible perpetrator, Wall Street stocks plunged in the last hour of trade on Thursday, as reports emerged that bombings in may have been the work of al-Qaeda. Suddenly, this wasn't just Spaniards throwing bombs at each other: now we could be dealing with the international terrorist group who might strike anywhere.
By the close the Dow Jones Industrial Average fell 168.51 points, or 1.6 per cent, to 10,128.38 and the S&P 500 dropped 1.5 per cent to 1,106.79. The technology-heavy Nasdaq Composite slid 1 per cent to 1,943.89.
David Memmott, head of block trading at Morgan Stanley, said the report of an al-Qaeda link "definitely hit the market quite hard".
Ciaran O'Kelly, head of equity trading at Banc of America Securities, agreed that the report spooked investors, but said: "The story is bigger than that. The fear in this marketplace is reflected in rising volatility levels. The index volatility has been bid up all week as investors have focused on the weak dollar, rising Treasury prices, widening credit spreads and the strength of the economic recovery."
The meaning of the story
At the time of writing, the significance of the bomb attacks cannot be determined. We have information on the physical facts of what happened: More than 190 people are dead and 1,200 others are wounded.
But so long as the story doesn't include a reliable explanation as to who was responsible and whether those persons have the intent to launch further attacks outside Spain, we can't be said to have knowledge of what is going on.
But in the absence of knowledge, even the possibility of a negative story is by itself enough to rattle financial markets around the globe.
Read the Financial Times
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #84
March 10, 2004
The story of how McDonald's is getting healthier: Europe
In 1993, George Ritzer published the The McDonaldization of Society, a book that was said to be "one of the most influential works of the last half of this century."1/ The thesis of the book was that the replacement of human skills by non-human technology would lead to greater and greater control. By eliminating the source of uncertainty and unpredictability in a rationalizing system -- people -- McDonald's, and companies that emulated its robotic methods, would inexorably dominate the planet. It was a dismal Orwellian vision of the future.
Hamburger hell
There was just one tiny problem. The nightmare vision never happened. Fast forward to December 2002, the question was not so much whether McDonald's was going to dominate the planet, but whether McDonald's itself could even survive by using the methods lauded in Ritzer's book.. If it persisted in its approach, McDonald's, it was said, was heading to an early McGrave.
According to the New York Times of December 5, 2002, McDonald's was languishing in "hamburger hell." There were multiple problems. After watching McDonald's stock slide 60% in three years, the board ousted Chief Executive Jack M. Greenberg, 60. His tenure had been marked by the introduction of 40 new menu items, none of which caught on big. New menu items like the low-fat McLean Deluxe and Arch Deluxe burgers, meant to appeal to adults, bombed. A handful of non-burger chains were purchased, but none were rolled out widely enough to make much difference. Consumer surveys showed that service and quality lagged far behind those of rivals.
But the problems were not simply one of management. The chain was being squeezed by long-term trends that threaten to leave it marginalized. It faced a rapidly fragmenting market, where once-exotic foods like sushi and burritos were now everyday options, and quick meals of all sorts can be found in supermarkets, convenience stores, even vending machines. Could McDonald's survive?
Out of hamburger hell
Sixteen months later, in March 2004, McDonald's appears to be thriving. After 10 straight months of increasing year-on-year sales from restaurants open at least a year, including a record 20 per cent US increase in February, McDonald's, if not yet in heaven, is not only out of hell but also making plans to get healthier in Europe.
This week, the Financial Times reports that McDonald's is taking its healthier foods strategy to Europe following its decision last week to phase out "super-size" fries and drinks in the US. The company, which has been under pressure from anti-obesity campaigners, will overhaul menus in 16 European countries, where it will slash its line-up of burgers for chicken salads, yoghurts and chopped fruits, following the successful introduction of premium salads range in the US.
Denis Hennequin, who was appointed to his pan-European role just two months ago, is moving rapidly to export many of the practices he introduced to McDonald's in France. In the face of deep-seated hostility from rural campaigners, Hennequin helped turn France into McDonald's fastest-growing European market. Mr Hennequin's success in upgrading restaurants and modernizing menus is to be the template for what will be done in the rest of Europe. "People want more of a fast casual feel and that's something that McDonald's has to address," he says.
To make room for the eight healthier products, which include a grilled chicken ranch salad and a grilled chicken caprese sandwich made with mozzarella, rocket and cherry tomatoes, McDonald's will cease selling a McBacon burger and a cheeseburger.
The new menu will be more mediterranean than midwestern. The 25 new ingredients, including rocket, balsamic vinegar, red batavia, lollo rosso, radicchio, sun dried tomatoes and olive bread, reflect Mr Hennequin's belief that McDonald's must move beyond simply providing "convenience" food and start catering to a real shift in awareness of the need for a well-balanced diet.
Clarifying the brand narrative
Last Friday's sales figures for February showed that the company's recovery under Mr Cantalupo was gaining momentum, with turnover rising 23 per cent. But sales growth in Europe was 7.7 per cent. As Mr Hennequin is well aware, Europe will have to catch up.
A key factor in the turnaround so far is the company's decision to consolidate its its media buying, totaling some $1.5 billion. The firm now relies on the agency that already has most of that business, the OMD Worldwide division of Omnicom Group Inc. (OMC). Since September 2003, it has gone with a single marketing message for McDonald's around the globe - "I'm lovin' it". This is already paying off with higher sales.
The campaign and attendant products and promotions have boosted average daily transactions in the company's 13,000 U.S. restaurants by about 650,000. Not only is that "a pretty huge number" but, perhaps as important, the campaign is helping to widen the brand's appeal. "All our research indicates that, for the first time, we have the attention of young adults," said a company spokesman. "It's bringing in customers to our stores that didn't even consider coming to McDonald's."
The limits of McDonaldization
The tale of McDonald's' is a salutary one both for those who pinned their hopes on McDonaldization and for those who feared that it would destroy the planet. It turned out that McDonaldization, if persisted to the end, would have killed even McDonald's. Only by generating a new story did McDonald's have a chance to survive.
1/ - Jonathan H Turner, University of California
Organizational and Business Storytelling In The News: Story #80
March 6, 2004
Bush uses humor to make his case against Kerry
In these pages last week, we noted Mark Katz' advice to President Bush on the use of humor to make his case:
For George Bush, every joke should be smart. He should use humor to showcase a more cerebral wit in order to counter the perception he's not the sharpest knife in the drawer.
A reader has asked: what would be an example of such a joke? As it happens, there are already several possible examples in the public domain.
Bush's "joke" of February 23, 2004
A possible example could be his speech on February 23, 2004, at the Washington Convention Center, in a $1,000-a-person fundraising reception for the Republican Governors Association. At a time when the Democratic nomination was still being contested by Edwards, Sharpton and Kucinich, Bush said:
"The other party's nomination battle is still playing out. The candidates are an interesting group, with diverse opinions: for tax cuts and against them; for NAFTA [the North American Free Trade Agreement] and against NAFTA; for the Patriot Act and against the Patriot Act; in favor of liberating Iraq and opposed to it. And that's just one senator from Massachusetts."
It got a big laugh from the Republican audience, since it deftly characterized (whether accurately or not) the Democratic front-runner, Senator Kerry, as "a man without a core". It has a mild "surprise ending" in the Bush quote, since one is led to think that Bush is talking about the whole field of Democratic candidates until one gets to the punch line, when it turns out he's just talking about Kerry.
The tone of the joke is a marked departure from Bush's normal way of talking. As Karen Hughes, Bush's longtime adviser, says, the president usually has a "directness" that makes some people uncomfortable. "You've all heard him. Good versus evil. With us or against us,' Hughes says. "It's one of the things that I think makes Europe a little uncomfortable with him. It makes the Democrats a little uncomfortable, too. The Democrats' candidate for president has been having a little message clarity problem."
In the joke however, Bush portrays himself in an uncharacteristic frame of mind: tolerant, reflective, meditative, intellectual, surveying the scene, coolly, calmly, appraisingly and analytically, weighing the differences, the peculiarities and the inadequacies, with a nice touch of irony about the frailty of the human race in general and the Senator Kerry in particular. Thus he might not be the sharpest knife in the drawer, but this intervention has edge.
Is it funny? To Republicans, obviously yes. It got a big laugh from his Republican audience on February 23.
But the real test is: does it amuse Democrats and independents? Does it at least give them pause for thought and ask themselves: maybe we should examine Kerry's positions more closely? My own private unscientific polling of colleagues and friends shows a mixed reaction. Some got a chuckle from it. Others are so negative towards the president that they find it difficult to listen to anything he says, let alone laugh at his jokes.
Bush's "joke" of March 3, 2004
Bush and his advisers must think the joke is effective, since they soon tried it again in a slightly different format at a Bush-Cheney fundraiser in Los Angeles on March 3, the day after Kerry cemented his position as front-runner winning most of the primaries on Super Tuesday. Bush said:
"Last night, I placed a call to Senator Kerry. I told him I was looking forward to a spirited campaign. I congratulated him on his victory. This should be an interesting debate on the issues. He spent two decades in Congress; he's built up quite a record. In fact, Senator Kerry has been in Washington long enough to take both sides on just about every issue."
Once again, it got a big laugh from Republicans. But only time - and further polling - will tell whether these "jokes" are effective with the key audience - Democrats and independents.
If readers of this page have other better examples of the use of humor by Bush (or Kerry), I'd be very interested to hear of them at: steve@stevedenning.com
Read the Washington Post on the March 3 speech.
Read the Washington Post on the February 23 speech
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #79
March 5, 2004
The story of copyrights and patents of business processes
The story of patents and copyrights is supposed to be that they serve the public interest and encourage innovation. Innovation is essential to economic success, so it is only right that strong protection for intellectual property has a central role in the modern economy. But if protection of intellectual property is too broad, the story can have a less-than-happy ending: patents can prevent innovations being used as widely as they should be and discourage follow-on innovations. Several current examples give pause for thought as to whether the supposed protection of intellectual property is really in the public interest at all..
The story of Linux: SCO's story vs IBM's story
One chapter in the intellectual property epic concerns Linux, the widely used Linux operating system. that has been developed by thousands of programmers around the world on a collaborative basis in what is known as "open source" methodology. The story which these developers share - and users count on - is that the Linux software is open to all. It is software developed by the people, for the people.
Enter SCO a few months ago, a tiny company in financial difficulty, with its story that it owns the copyright to certain portsion of the Linux code. SCO has launched an aggressive lawsuit against IBM claiming substantial damages.
IBM's story is the opposite. It claims that the software is in the public domain and that IBM, along with all the other Linux users are entitled to use it without paying huge fees to SCO. The lawsuit is now wending its tortuous way through the courts.
SCO's story - if it were to prevail in the law courts - would put in jeopardy large sections of the software industry, and threaten the future of the whole open source movement. While SCO has expanded its legal fight by focusing on name-brand companies, its moves are alienating it from an industry that has ardent fans of the free operating system. "It's either a bold bet-the-company move [to add lawsuits] or a suicide gambit," Yankee Group analyst Laura DiDio told The Salt Lake Tribune. "Right now, the majority of the industry views it as the latter."
Thus the story in the industry is that SCO is an upstart and a public nuisance - a company telling stories without substance in order to make money. Undeterred by its unpopularity, SCO is pressing forward with its aggressive claims, under the guidance of some high-priced lawyers who now also have a large financial stake in winning the case.
A judge has ordered SCO to pony up more information on its code in its fight against IBM. "In a ruling filed in the U.S. District Court in Utah, Magistrate Judge Brooke Wells said SCO hasn't yet provided enough information about its charges that IBM moved proprietary Unix software to Linux. In consequence, she ordered the company to 'provide and identify all specific lines of code that IBM is alleged to have contributed to Linux from either AIX or Dynix,' IBM's two versions of Unix," CNET's News.com has reported. "The judge also directed SCO to 'identify with specificity all lines of code in Linux that it claims rights to,' repeating an order she issued in December."
SCO's story now impacts cars and drivers:
On March 3, SCO made good on its threat to intensify its battle with the corporate world over the Linux operating system. The Utah-based Unix software developer yesterday sued AutoZone Inc. and DaimlerChrysler Corp. in a move that takes the contentious debate over the nature of "open-source" computer code to a new level of belligerence.
Now SCO is threatening other companies with the aim of extracting user fees. SCO alleges that DaimlerChrysler violated its Unix software agreement with SCO. In its lawsuit against auto-parts retailer AutoZone, SCO claims the company violated SCO's Unix copyrights.
The cases represent a major escalation in SCO's efforts to protect its Unix business from what SCO perceives as unfair competition from Linux," The Boston Globe reported. The Wall Street Journal said the move broadens "its legal attack on Linux to users of the popular operating system."
Can SCO prevail? So far, the story in the industry is that the odds don't look good. "I don't know of any case in which an end user of mass-distributed software has been sued simply for obtaining or possessing it," Jonathan Zittrain, an assistant professor at Harvard Law School, told the Deseret News.
Whose story will prevail? SCO's story that it owns the copyright to a portion of the code? Or IBM's story that the code is public property? The courts in due course will decide, but in the meantime, SCO is trying to intimidate Linux users with its story: if it wins its court case, it will be enriched by many millions of dollars. Even the risk that it might win may be enough to win it significant revenues from companies that would prefer to settle, rather than have a patent suit on their hands.
IBM patents an auction process
In the SCO case, IBM is the defendant and the alleged victim of an intellectual property system run wild. But in other areas, IBM is also the aggressive patenter of intellectual processes.
This week, the Financial Times points to to a US patent granted recently to IBM for a "smooth-finish" auction, an auction that is programmed to end at a random time. Perhaps this sounds like just the kind of original idea that patents were designed to protect.
But the Financial Times points out that the patent examiners appear not to have read Samuel Pepys, the 17th-century British diarist, who describes the Admiralty's auction of two ships by a "candle" auction. Candle auctions end when a candle goes out, or when a pin pushed into the candle falls out because enough wax has melted. They have been used for centuries and while, as Pepys noted, some candles expire at fairly predictable times, it requires neither much imagination to consider making an auction's ending time less predictable, nor much computing skill to programme this randomness.
Even if the IBM patent is a mistake, the problem is not easily rectified. Someone could challenge its validity. But why should they bother? The beneficiaries of a successful lawsuit would be all those who might wish to run auctions competing with IBM, and all those who would benefit from auctions being run at competitive prices; but the plaintiff would bear the costs of the suit. Moreover the plaintiff could probably not contest the patent unless it entered the market at high investment cost. Even if the plaintff ultimately prevailed, it might be badly damaged if IBM could obtain a preliminary injunction. Rather than betting my business before the judge, the company might agree to pay licence fees to IBM.
• This is what happened when Barnes & Noble reached a settlement with Amazon when Amazon claimed proprietary rights in "one-click shopping".
• Similarly, several companies have agreed to pay royalties to Priceline for its price-matching system, also arguably only a slight variation on centuries-old sales mechanisms.
Why should anyone risk paying millions of dollars and risk the entire company to fight IBM's patent?
The story of IBM's storytelling patents
Within the storytelling community itself, there is concern that IBM has patented processes for identifying narrative archetypes, thus posing a dilemma for those who might wish to experiment with such processes in future. Further innovation in this area will involve significant risks unless licensing agreements are signed with IBM. If licensing agreements are signed, then users run the risk that their future business related to such work will be held hostage to maintaining licensing agreements with IBM and paying whatever fees IBM chooses to extract. The net result is likely to be less innovation in this area, rather than more. If that happens, then the public interest suffers.
The story of public policy and intellectual property
According to the Financial Times, US intellectual property law has essentially run amok. The US patent law now appears to permit the patenting of business methods and software that are not particularly new or innovative, with the result that innovations are being stifled not encouraged. The Financial Times points that such process "innovations" that would generally not be patentable in Europe. If the patent system goes too far, the whole economy suffers, yet individual companies may not wish to risk challenging it.
Lawrence Lessig in his book The Future of Ideas (2001) agrees. He suggests that the law should be changed and that there should be a moratorium on the patenting of business processes should be suspended, pending a study of the public interest in allowing such patents. The examples of patents in the fields of auctions and storytelling reflect the merits of his argument.
Read the Financial Times on SCO
Read the Financial Times on patents
Read the Washington Post
Organizational and Business Storytelling In The News: Story #138
May 3, 2004
Learning from the story of a trainee at Toyota
Is Toyota the best-performing knowledge organization in the world? Some analysts would argue that it is. By the end of last year Toyota was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales. In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors.
Given Toyota's performance in terms of quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization, other companies have studied and attOrganizational and Business Storytelling In The News: Story #138
May 3, 2004
Learning from the story of a trainee at Toyota
Is Toyota the best-performing knowledge organization in the world? Some analysts would argue that it is. By the end of last year Toyota was on the verge of replacing DaimlerChrysler as the third-largest North American car company in terms of production, not just sales. In terms of global market share, it has recently overtaken Ford to become the second-largest carmaker. Its net income and market capitalization by the end of 2003 exceeded those of all its competitors.
Given Toyota's performance in terms of quality, reliability, productivity, cost reduction, sales and market share growth, and market capitalization, other companies have studied and attempted to duplicate the company’s processes. Several decades ago, General Motors famously spent some $45 billion trying to duplicate its automation processes with little success. The fact that few companies have come close to rivaling its performance suggests that the secret of Toyota does not lie in stories about its processes.
An article in the May 2004 Harvard Business Review, Steven Spear argues that a major part of the reason is that imitators focus on specific tools and practices while failing to recognize the underlying principles of the Toyota approach.
According to Spear's earlier HBR article, Toyota’s much-noted commitment to standardization is not for the purpose of control or even for capturing a best practice, per se. Rather, standardization—or more precisely, the explicit specification of how work is going to be done before it is performed—is coupled with testing work as it is being done. The end result is that gaps between what is expected and what actually occurs become immediately evident. Not only are problems contained, prevented from propagating and compromising someone else’s work, but the gaps between expectations and reality are investigated; a deeper understanding of the product, process, and people is gained; and that understanding is incorporated into a new specification, which becomes a temporary “best practice” until a new problem is discovered.
Spears describes the training of an "American hotshot", who arrived at the company thinking that he already knew the basics of TPS -- having borrowed ideas from Toyota to improve operations in his previous job -- and would simply be fine-tuning his knowledge to improve operations at his new assignment. He came out of his training realizing that improving actual operations was not his job -- it was the job of the workers themselves. His role was to help them understand that responsibility and enable them to carry it out. His training taught him how to construct work as experiments, which would yield continuous learning and improvements, and to teach others to do the same.
Toyota inculcates managers with the Toyota approach in the way it readies recruits for a higher-level position at one of Toyota's U.S. plants. According to Spear's story, the trainee learned four main elements:
• Element #1: “Direct observation”. Toyota employees are encouraged to observe failures as they occur. That includes managers who are required to watch employees work and machines operate. Spears points out how different this is from the usual forms of indirect observation such as reports, interviews, surveys, narratives, aggregate data, and statistics.
• Element #2 “Change is experiment" Toyota expects employees to embed explicit and testable assumptions in the analysis of their work -- all of which managers have to report in detail and with considerable precision. That approach helps reveal gaps between predicted and actual results.
• Element #3: "Frequent experiment" Employees at all levels strive for continuous improvement through quick, simple experiments instead of lengthy, complex ones. The manager’s training is structured so that the complexity of the experiments increase gradually, allowing mistakes without severe consequences, thereby increasing his willingness to take risks and learn by doing.
• Element #4 “Managers coach rather than fix.” Toyota managers enable and direct employees, but refrain from telling them where to find opportunities for improvements. Spears argues that this unusual manager–worker relationship produces a high degree of sophisticated problem solving at all levels of the organization.
It is also striking that Toyota provides the resources to facilitate rapid experimentation. The trainee in Spear's article had the help of a maintenance worker to move equipment, create fixtures, relocate wires and pipes, and provide other skilled trade work so that he could test as many ideas as possible. The supervisors also came to the cell of the machining operation to review the trainee's ideas and gave him tips on piloting his changes before asking support workers to make parts or relocate equipment. When the trainee wanted to rotate some gauges that tested parts, the supervisor showed him how to quickly and inexpensively make cardboard prototypes to test location, orientation, size, and so on. The result of this unusual manager–worker relationship is a high degree of sophisticated problem solving at all levels of the organization.
What is more convincing than the various lessons that the trainee learned in the article is the fact that the article is the story of the training of a single individual - a hotshot in the US environment - encountering the very different approach of Toyota. The learning lies less in the lessons than in the story.
Read Steven Spear in the Harvard Business Review
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Organizational and Business Storytelling In The News: Story #137
May 2, 2004
The story behind the images from Iraq prisons
Amid all the talk about the horrifying images from the prisons in Iraq, and the discussion of the power of images, it is often overlooked that what is driving the outrage is not so much the images, as the stories that we are reading into the images.
Thus understanding of the meaning of these images is wildly different depending on which of the following stories we read into the images:
1. The images are fake images, aimed at discrediting the US and UK military.(an interpretation being examined by the British authorities in connection with the pictures published by the Daily Mirror in London); or
2. The images were staged images to intimidate prisoners, but no actual abuses took place; or
3. The images represent abuses by a few isoloated individuals in Iraq; or
4. The images represent systemic abuses by the military chain of command; or
If story #1 were to become the accepted story, then the images would be seen as having little significance or lasting value.
If on the other hand story #4 were to become the accepted story, then the images might represent a stain on the reputations of the governments of the coalition that might last for many generations.
Since a US investigation completed in February has established that some abuses did take place, it is implausible that stories #1 or #2 will become the accepted story.
The US administration is making a strenuous public relations effort to get the world to accept that story #3 is the "correct" interpretation.
However much of the world has already leapt ahead to story #4 as the most likely story of what has occurred. This leap of imagination has been facilitated by the apparent lack of followup to the initial report of the US military investigation, with the report of the abuses reaching the highest level of the military or political command. It seems likely that this widespread belief in story #4 could only be removed by the most open, thorough and independent investigation of what has gone on.
Whatever the outcome, the political impact will be massive -- all depending on a story.
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #133
April 28, 2004
Investor's Business Daily on organizational storytelling
Investor’s Business Daily’s Ten Secrets to Success: Investor’s Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have ten traits that, when combined can turn dreams into reality. Each day they highlight one. On April 27, 2004, they highlighted organizational storytelling under the heading, “Decide upon your true dreams and goals”.
Organizational and Business Storytelling In The News: Story #133
April 28, 2004
Investor's Business Daily on organizational storytelling
Investor’s Business Daily’s Ten Secrets to Success: Investor’s Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have ten traits that, when combined can turn dreams into reality. Each day they highlight one. On April 27, 2004, they highlighted organizational storytelling under the heading, “Decide upon your true dreams and goals”.
The article, by Amy Alexander, is entitled Once Upon A Tomorrow
When they needed to brand a common goal onto the minds of many, Martin Luther King, Winston Churchill and John Kennedy turned to storytelling. They didn’t tell fairy tales or fables. They painted a picture of tomorrow that their followers could make their own.
King shouted, “I have a dream,” and then spoke of all Americans working and playing together. Churchill described fighting on the beaches, landing fields, in streets and on hills, laying out what the troops would have to do to win World War II. Kennedy said, “This nation shall commit itself to achieving the goal, before this decade is out, of landing a man on the moon.”
You don’t have to be a King or a Churchill or a Kennedy to tap into the power of storytelling. It’s an effective way to get goals to gel at any company, says Stephen Denning, an organizational storyteller.
Reach Within
“You might be bale to excite the mind with analysis, but when you are trying to move people and inspire people, you have to reach for the heart,’ he said.
Denning was one of several organizational storytelling experts who gather in Washington D.C. in April for a Smithsonian-sponsored seminar on how to use storytelling as a catalyst for change.
Denning was working as director of knowledge at World Bank when he discovered that if he tried to talk higher-ups into investing in knowledge sharing by throwing around facts and spreadsheets, people’s eyes glazed over. Yet when Denning began telling and retelling a simple story of how one doctor in a village in Zambia could treat malaria by going online to find answers, attitudes changed.
That story persuaded higher-ups to invest time and money in knowledge sharing, which resulted in the World Bank becoming the leader in knowledge management.
Using Imagination
Why does storytelling so well when it comes to creating a vision? Denning explains it in his forthcoming book, “Squirrel Inc.”
“The best way to get human beings to venture into future terrain is to make that terrain familiar and desirable by taking them there first in their imaginations through a story,” Denning wrote.
The simpler the story, the better, Denning says.
“Future narratives sketch a vision that points in a general direction but little else,” he said. “if these narratives are effective, it is because the listeners themselves put flesh on the skeleton. The listeners contribute the narrative detail.”
A brief evocative, general story makes it easier for listeners to adapt when the unexpected happens. “People can remold the narrative in their imaginations on the fly,” Denning said.
Shake things up,. What would a better future look like for your organization? Don’t’ get too caught up in “what ifs” and “yeah, buts.” When you’re crafting your vision – your company’s story of tomorrow – it’s important to keep an open mind. “A vision doesn’t offer exclusionary moves,” Denning said. “It opens up the landscape of possibilities still to come.”
Read the Investor's Business Daily
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Organizational and Business Storytelling In The News: Story #131
April 26, 2004
The story of Google going public
Some months ago, we noted the article in which of Nobel-Prize-winning economist Daniel Kahneman commented on whether those people who lost their shirt in the dot-com crash have actually learned anything. Kahneman said, "Oh, many people will admit that they made a mistake.
But that doesn’t mean that they’ve changed their mind about anything in particular. It doesn’t mean that they are now able to avoid that mistake."
Now as Wall Street salivates at the prospect of Google launching an IPO and possibly becoming a $20-25 billion company, Kahneman's advice is salutary.
The founders of Google built a business out of selling paid ads alongside search results, which turned Google into a money machine. Most important, they provided fast and reliable results, propelling Google from handling less than 1% of Web searches in 2000 to over 50% today.
While most analysts are envisaging a bigger and ever more brilliant future, BusinessWeek points out the competitive threats to Google:
• Yahoo is leading the assault. In February, the portal giant fired up a new search engine that analysts say nearly matches Google's performance. More worrisome, Yahoo CEO Terry S. Semel is driving Yahoo to the next frontier, customized search. Instead of today's one-size-fits-all searches, he wants to offer queries tailored for an individual's tastes, interests, even location. Advertisers are ready to pay royally to reach this type of targeted audience. And Yahoo is off to a big head start in gathering the personal information necessary to deliver such customization. It has amassed 141 million customer profiles; Google next to none. "They're quite vulnerable," says Michael A. Cusumano, professor of management at Massachusetts Institute of Technology.
• Even if Google sidesteps that threat, it faces another, perhaps more daunting one. Microsoft is working to leverage every bit of its Windows monopoly in the effort to win the search market. Ballmer and Chairman William H. Gates III are working to embed search capabilities into nearly every aspect of future versions of the operating system. Have a question? Search the Web and the hard drive too from a Word document, an instant chat box, even an Excel spreadsheet. No need to pay a visit to a search site. If Microsoft makes good on this sweeping expansion, it could turn Googling into a quaint ramble down memory lane.
• Google's trials would strain even a battle-hardened outfit geared for war. But the company still operates under freewheeling management, a vestige of its peaceful prosperity as a private company. Under a ruling triumvirate, no one exec has clear control. CEO Eric E. Schmidt, 48, was hired three years ago to provide experienced leadership. But his role, as he describes it, sounds more like a chief operating officer's than a CEO's. He says he handles "the day-to-day stuff," making sure the right people are talking and reaching out to partners.
• Decisions emerge from three-way negotiations between Schmidt and co-founders Page and Sergey Brin. It's the founders who chart Google's path, wielding veto power on strategy and technology moves. Engineers, meanwhile, work in the same culture of controlled chaos that built the startup. All are free to pursue pet projects. The result is an engineer's dream -- but hell for planners. Some investors find the approach unsettling. "They do not sound even remotely like a fiercely competitive world-class company, [but] rather kids playing in a sandbox," says one Google investor, who plans on selling shortly after the IPO.
As BusinessWeek notes, the kids will have to grow up fast. Dot-com investors will also have contain their "irrational exuberance" if they don't want to lose their trousers as well as their shirt.
Read the Wall Street Journal
Read BusinessWeek
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #129
April 24, 2004
Global Province: Growing role of storytelling in business
This month, Global Province has an interesting piece on organizational storytelling entitled, From a Sow's Ear to a Silk Purse.
After going through the storytelling fell into disrepute in business, and how business communications became less and less intelligible, the Global Province says that things are changing.
It says that what’s new in 2004 is that the story today not only is at the heart of culture but is also cropping up more and more in business practice as enterprises try to build more authentic connections with their employees, customers, and other constituencies. In part, this seems to be a reaction to our digital world, where we are assaulted by proliferating bits of information that never seem to add up to anything. Somebody has to put all this stuff together.
Story, Inc. Numerous large companies are now using storytellers in a host of ways. Hewlett-Packard, the W.K. Kellogg Foundation, and Pixar use story consultants to reinforce corporate beliefs and to teach managers the art of the story and its use in their work. See “Fabulists at the Firm,” The Wall Street Journal, January 9, 2004, p. W11.
Stephen Denning writes about the use of storytelling in knowledge transmission in The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations.
“In Britain,” says the Journal, “corporate storytelling is part of a larger fashion for trying somehow to mesh the arts with business. One prominent advocate is theater director Richard Olivier, who has a second career going as the director of the Olivier Mythodrama Associates Limited.” The Brits, we think, theorize that storytelling and literary excursions do more than spread knowledge: They see fiction, plays, even poetry as devices for inspiring creativity.
Stories are creeping into advertisements as well. Years ago an advertising guru was heard to say, “Truth is what really sells. Now if we could only package truth.” Short of that, company brand managers now employ fiction to make a point.
For instance, Ford of Great Britain has hired British “chick-lit” novelist Carole Matthews to bring spice to its Ford Fiesta by weaving it into her books, by doing monthly stories for its website, and by heading up a Ford short story competition. It’s thought that this tactic will hook 25-to-35 year-old women. (See The New York Times, March 23, 2004, p.C2)....
Some medical schools, by popular demand, are now offering courses on medical narrative. See “The Writing Cure: Can Understanding Narrative Make You A Better Doctor?” New York Times Magazine, April 18, 2004, pp.42-47. Many physicians scoff at the value of such courses, but we suspect that the story is integral to good healthcare. Specialists who only deal with events and procedures can ignore histories. Physicians who care about lives must embrace the whole of the patient they would seek to treat, capturing the totality in a story.
The story is a tool for business, for healthcare, and, critically, for education. In her essay, “Ojos Sobre Cuba,” San Francisco speechwriter Rebecca Otto remarks on the presence of readers or lectors in Cuba’s cigar factories. They sit in front of the workers, reeling off the news of the day and reciting stories from current, popular books. Cuba has achieved a 97% literacy rate, in part by bringing books and knowledge to workers wherever they might be—in a factory or picking sugar cane out in the fields.
The Global Province concludes: "Everywhere we go, stories entertain, instruct, engage, and enrich. Society, it seems, needs good yarns with a touch of vision, not just to pass the time but to keep moving forward into the future. Without a story, all our todays seem like yesterdays, and there are no tomorrows. Stories turn sows’ ears into silk purses."
Read the Global Province
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #127
April 22, 2004
The story of Nokia and Samsung: who's hot and who's not
A few months ago, a colleague was telling me about his cool new phone and showing off its bells and whistles. My daughter was listening in and soon she had bought the same phone. I don't own a cell phone, and it was only later that I realized that they had both discarded Nokia phones to buy what they saw as cooler Samsung products.
Samsung is hot - Nokia is not
Now John Gapper reports in the Financial Times that my observations are instances of a global phenomenon. Although Nokia's share of the global market for mobile handsets is still large, its South Korean competitor, Samsung, has momentum. Samsung's camera phones, with twisting flip-up screens that allow users to take, send and display photos quickly and easily, are hot; Nokia's are not.
The financial impact of this assessment became apparent last week as news came last week that Samsung's market capitalization exceeded that of Nokia, following Nokia's disappointing first-quarter results. Even more galling to the Finnish company is the transfer of the intangible narrative quality known as market leadership. The high end of the market - phones that retail for $300 or more in the US - is no longer Nokia's. Samsung makes the expensive camera phone that a young consumer wants to tell friends about.
Gapper argues that Nokia realizes how potentially serious is its predicament, even if its initial response - six of its 40 planned new models are clamshell-shaped - is a bit scatter-gun. But two obstacles stand in the way of its regaining authority. One (product design) should be soluble, given the company's heritage. The other (that Samsung is South Korean) will be harder to tackle, as other western companies are likely to find as well.
According to Gapper, design should be Nokia's forte, since it originally overtook Motorola by turning handsets into handsome and desirable consumer goods, rather than bland technological objects. Yet in its recent models, Nokia appears to have forgotten the first precept of modernist design - that form follows function. Instead, it has placed most emphasis on making its handsets colorful and zappy, with snap-on fascias.
Gapper argues that Nokia should be able to regain its poise in design. But Samsung has another advantage, which is more difficult for any European rival to counter: the willingness of young South Koreans to pay high prices for new electronic devices. In terms of access to broadband and telecommunications infrastructure, Samsung happens to be sitting in one of the world's most wired - and wireless - markets.
In the end, that is a bigger problem for Nokia than being ambushed by Samsung's designers. Design skills are transferable in a way demographics are not. Western companies often talk of Asia as a vast market waiting to be tapped, but Samsung has shown that it can bite back. Every western business executive visiting the continent probably experiences that fear: they're hot and we're not.
Bottom line
The narrative line is the same among consumers and analysts: Samsung is hot - Nokia is not. Whether people really need a camera in a cell phone, or a twisting flip-up screen that swivels back, or the capacity to have multiple musical tunes to be assigned to different callers, hardly matters. What really counts is whether customers and analysts are telling positive stories about these features. Regardless of the inherent quality of the products, the stories that customers and analysts tell about have a huge impact, first, on what people are thinking and talking about, then on sales, and then on profits and market share.
Read the Financial Times
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Organizational and Business Storytelling In The News: Story #126
April 21, 2004
The story of Eli Lilly: Learning from failure
Some of the notable advances and innovations in business and science have come from failure:
• Alexander Fleming discovered penicillin when mold started growing in a Petri dish in his untidy laboratory.
• Post-it Notes got their start in 1968 when a 3M researcher was aiming to improve adhesive tape and failed. Instead, he got was a semi sticky adhesive, which turned out to be what another another 3M scientist needed to keep his bookmarks from falling out the hymnal in his church choir.
• Another 3M scientist came up with Scotchgard, which helps prevent dirt from staining fabric, what she she set out to create was something quite different - a synthetic rubber to be used in airplane fuel lines. One day some of the new substance spilled on her assistant's canvas shoe, and they couldn't get it off. As the tennis shoe grew older, it got dingy--everywhere except where the substance had spilled. .
Learning from failure at Eli Lilly & Co
Drug companies see the importance of tolerating -- and learning from -- failure, a valuable strategy since about 90% of experimental drugs in the industry fail. Pfizer Inc. originally developed the blockbuster impotence drug Viagra to treat angina, or severe heart pain
Now the pharmaceutical company, Eli Lilly & Co, is singing the praises of consistently learning from failure, in an interesting article by Thomas Burton in the Wall Street Journal. According to Burton, Lilly has long had a culture that looks at failure as an inevitable part of discovery and encourages scientists to take risks. If a new drug doesn't work out for its intended use, Lilly scientists are taught to look for new uses for a drug. In the early 1990s, W. Leigh Thompson, Lilly's chief scientific officer, initiated "failure parties" to commemorate excellent scientific work, done efficiently, that nevertheless resulted in failure.
According to Burton, Lilly has taken this approach to unusual lengths. It assigns someone -- often a team of doctors and scientists -- to retrospectively analyze every compound that has failed at any point in human clinical trials. Blair Sheppard, a management professor at Duke University who's done consulting work for Lilly and other pharmaceutical companies, says that Lilly developed "a formalized and thoughtful process in which it reviewed failures more honestly, more deeply and started the process sooner than anyone else."
• Evista, now a $1 billion-a-year drug for osteoporosis, was a failed contraceptive.
• Strattera, a hot-selling drug for attention deficit/hyperactivity disorder, bombed out as an antidepressant.
• A promising cardiovascular drug called a PPAR-alpha-agonist, which lowers fat levels in the blood, arose from a failed asthma project.
• The antidepressant Cymbalta, for which Wall Street has high hopes, failed in its original trials until a Lilly scientist upped the dosage.
• Eli Lilly & Co. had high hopes for an experimental chemotherapy drug called Alimta. But after three patients taking Alimta died suddenly in 1999, Lilly halted trials of the drug. It eventually emerged that patients with the most severe side effects were those with high homocysteine -- and low folic acid -- in their blood. The researchers decided on a disarmingly simple solution: Give all patients folic acid pills in addition to their dose of Alimta. "When I first heard about it, I thought it was crazy," says Bruce A. Chabner, clinical director of the Massachusetts General Hospital Cancer Center.
Although Lilly's share price has suffered due to the expiry of the patent for Prozac, approval problems with the FDA, and competition from other drug companies, Eli Lilly & Co's track record is interesting, in an industry where getting two new drugs approved by the FDA is considered a banner year. Lilly already has six approved so far in 2003 and 2004 combined and hopes to get another two approved by year-end. And it has another 11 promising drugs in the middle- to late-stage pipeline.
Read the Wall Street Journal
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #121
April 16, 2004
Inflation and the story of money
The most important story on Wall Street these days is not whether but when? When will the Fed move up interest rates. The destiny of hundreds of billion dollars depends on which story is told.
Lingering concerns about deflation felt by investors were allayed last week after the government reported brisk March retail sales and the biggest surge in consumer prices in more than two years.
The story that inflation was on the rise roiled the bond market, where expectations of a Federal Reserve rate increase and concerns about inflation have combined to push longer-term interest rates up more than half a percentage point since mid-March.
Many investors see the story of the economy as having reached a turning point, with the recovery on a self-sustaining path but facing a period of adjustment as investors, companies and households confront the implications of a world without cheap money.
Managing that adjustment falls to the Fed, which for a year has been saying that the primary fears were slow growth and price deflation, not inflation.
The issue isn't whether prices are rising so fast that the Fed needs to step on the monetary brake -- they're not -- but whether it's finally time to begin easing off the accelerator, in the form of the lowest federal funds rate in 46 years. Just the process of moving the Fed to a "neutral" position would involve increasing the funds rates from 1 percent to 3 percent. And last week the message from the bond market and a growing number of economists is that the time to begin moving in that direction is at hand.
The stakes for financial markets of this story are profound. Over the past year, hedge funds, banks and speculators have borrowed heavily to buy stocks, bonds, real estate and commodities, helping to drive up prices of those assets and leaving markets vulnerable to any backup in rates. Now that rates have indeed begun to rise, the danger is that there could be such a rush to unwind those positions that these asset bubbles could burst. Just such a panic was reflected in the sharp decline last week in the share prices of once-hot real estate investment trusts.
Perhaps even more important than where to go in equities is simply to trim back exposure to bonds. Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis spoke to the Wall Street Journal. "The bond market bores you to death – then it kills you," he said. He thinks the Fed-funds rate could reach 2.5% to 3% by the end of the year, and that the 10-year yield will hit 5.5% by the end of the year – a steep increase from 4.34%, where it stands as of Friday. "I think the best thing you can do as an investor is reduce your bond exposure and reduce the duration of remaining bond exposure," he says.
Historically, bonds do much worse than stocks when inflation is rising, Paulsen says, citing 1984 and 1994 as two years of inflation fears when bonds got killed and stocks held up better – even if that meant staying flat for awhile. In 1984, the 30-year bond's yield soared from 10% to 14% as bond prices tumbled. In 1994, the yield rose from 6% to 8.5%. In both cases, he says, stocks were almost completely flat for the year and saw big gains in the years following.
Investors are also beginning to cast a nervous eye on China's overheated economy. While China's appetite for goods and capital is helping to fuel economic growth around the world, it is also driving up world prices for everything from cement to soybeans. But cooling things down would require Beijing to untether its currency from the dollar, which risks destabilizing China's already frail banking system and slowing its transition to a market economy.
Bottom line
Thus, investors sit watching, in part constructing their own story of the likely path of the economy, but even more important, trying to figure out what story other players will follow - the Fed, other investors and analysts - will concoct. The choice of story will have a determining impact on the placyment of hundred billions of dollars.
Read the Wall Street Journal
Read the Washington Post
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Organizational and Business Storytelling In The News: Story #116
April 11, 2004
Role of narrative in fashion photography
This morning, the New York Times notes in its discussion of the current Museum of Modern Art (MOMA) show on "Fashioning Fiction," that in the 1990's fashion photography made clothing subservient to narrative. The show is built around the idea that in the 1990's fashion photography became fixated with narrative, with storytelling.
The story however is minimalist, leaving the viewer to complete the narrative. You have to stand in front of them for a while to d figure out a story line — it was her birthday, they got together, they broke up, etc. They are evocative of narrative circumstance rather than telling a story, step by step.
Holly Brubach notes that people used to complain that Balanchine's ballets were too abstract, they lacked story lines, and he used to say, "Boy offers hand, girl takes hand, how much story do you want?" That's what she's reminded of by this exposition. The narrative is vague, but that's not such a bad thing.
Brubach also notes that fashion photography satirizes itself and the whole notion of glamor. "There's a send-up of female perfection, which seems logical given what happened in the 80's — the supermodel obsession and the idea of the sleek goddess that was projected in so many fashion images. We have to remember that there is this dialectic in fashion where it swings back and forth between perfection and ideal beauty and then toward a kind of revulsion with all that. And you see it in different forms here. You see it in Cindy Sherman, photographed with a face that's partially scarred, or you see it in the Nan Goldin or Mario Sorrenti pictures. They're consciously in your face with the idea that these are not supermodels. And then you see the whole idea played out again in more humorous form in the Meisel Italian Vogue shoot satirizing the 50's, which illustrates perfection but taken to such a degree that it becomes absurd and amusing."
Ginia Bellafante notes that the photograph taken in Havana by Philip-Lorca diCorcia (see detail above), of a woman standing by a bar is a direct reference to Edward Hopper's paintings — and with its mood of romanticized disconnection, of alienation, it seems to represent the feel of the whole show.
Bottom line
The theme of the MOMA show also reflects a deeper point -- photographs in general only make sense when we know the story that they embody.
Read the New York Times
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
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Organizational and Business Storytelling In The News: Story #115
April 10, 2004
Story of biotech research: role of individuals in innovation
Further to an earlier story in these pages on the tension between big organizations and innovation, BusinessWeek reviews a new book, The $800 Million Pill: The Truth Behind the Cost of New Drugs by Merrill Goozner (University of California, 2004) and highlights a couple of examples where the persistence of an individual researcher made the difference between success and failure:
• Amgen Inc.'s (AMGN ) blood-boosting EPO, the world's best-selling biotech drug, was based on decades of work by an academic scientist -- and the collection of 2,550 liters of urine from Japanese patients.
• Novartis (NVS ) is reaping plaudits and billions of dollars in revenues right now from its cancer drug Gleevec, but the treatment would have never come to market without Brian Druker at the Oregon Health & Science University. The company originally thought that the market -- patients with a rare leukemia -- was too small to justify developing the drug. Druker, however, lobbied hard for human trials after showing that the medicine worked in a test tube. He even gave Novartis an ultimatum. "Either get it into clinical trials or license it to me," he said. Now, Gleevec is a blockbuster. It took a dedicated researcher before a reluctant drug company delivered on the promise of its proprietary product.
Organizational and Business Storytelling In The News: Story #109
April 4, 2004
Cyclical vs linear storytelling in organizational change
During my stay in Australia last week, I participated in a workshop in a storytelling program that has reached some 60,000 participants and evaluated as a success by the Australian Government. Although the program is focused on helping individuals cope with personal transitions and loss, it has implications for organizational change programs, which often founder on unexpressed grieving for "the way things used to be".
Change and and the loss of personal identity
These days, personal identity is bound up with what we do in the context of our work. When that work context suddenly and significantly changes, the individuals involved are essentially being asked to change their personal identities. It's hardly any wonder that this doesn't happen easily or quickly or naturally.
While participants may appear to be going along with organizational change programs, there is often an invisible undercurrent of feeling focused on getting back to "the way things used to be". When the opportunity presents itself, employees abruptly revert to the old way of behaving, because "that's how things have always been done around here".
The typical management tactic is to ignore the "silent grieving" for the past and hope that sufficient momentum can be created for the change that those who yearn for the past will be swept along by the forward progress.
An alternative is to recognize the grieving process for what it is and explicitly deal with it. The difficulty in accomplishing this is that there are no obvious processes or terminology in the management vocabulary for coping with such deep-seated and rarely expressed feelings.
This is where the Australian program called "Seasons for Growth" might come in. It's a program aimed at helping people of all ages cope with major change and transitions in their lives. It involves a shift from a linear lens to a cyclical lens on the world.
The linear storytelling lens
Western civilization is largely based on a linear view of the world. It is exemplified by Aristotle’s Poetics, in which a story is seen as something with a beginning, a middle and an ending. Once the story has ended, it’s over. The story has ended, and there’s nothing left for the listener but a void. The linear view of life is just a metaphor for the world, but if we use this metaphor to view the world, we find ourselves in this void, when the story ends. It’s a void created by a linear lens that we’re using to view the world.
The linear view of the world is also implicit in such models as Joseph Campbell's "hero's journey" which tracks the progress of a protagonist in a voyage that has a start and an ending.
The problem with the linear view of the world is that once the story ends, there is nowhere else to go. One is left in a void. When things are going well, that may not be a problem. But when severe personal loss is involved, such as death of a loved one or devastating illness or incapacity, the ending of the story can cause various kinds of anxiety, unease, neuroses, suffering and unhappiness and an inability to cope.
It’s not often realized that the linear lens is something that we bring to the world, not something that is inherent in the world itself. What we don’t always grasp that it’s not the only lens that we can use to view the world. The fact is that we can bring other lenses to view the world. In particular we can view the world through a cyclical lens, of which the lens of seasons is an example.
The cyclical lens
The Seasons for Growth program is based not on a linear view of life but rather on cyclical view of the world. It uses a metaphor -- the four seasons of the annual calendar. In the annual calendar, the seasons never “end”. Autumn is followed by winter, which is followed by spring, and which is followed by summer, and then we’re into autumn again, and so on. There is never a point in time when the seasons have ended. The seasons never end. They just change.
Each of the seasons has a meaning which flows from the previous and which leads on to the next season. Thus:
• Autumn is the season of which we experience loss. The fruits drop to the ground, the flowers are no more. We recognize that the flourishing summer is no longer with us.
• Winter is a season which we experience the pain of this loss. In the cold of the season, we tend to go inwards, and suffer from the lack of what is no longer with us.
• Spring is the season when we experience the thrill of the rebirth of new life. We still remember the coldness of winter, but we also look ahead to the potential of new growth, new energy, new prospects of life.
• Summer is the season for the enjoyment of the fullness of life, its plenitude, its richness, luxuriant in the fruits. It’s a season of looking outwards, of satisfaction, of pleasure, of delight of happiness.
No season is right or wrong. It’s rather that each season is different.
We might like to be always “in summer” or always “in spring”, but this is not possible in our world. Loss and change is inevitable. Wisdom entails embracing change and recognizing that there are seasons and feelings appropriate to each part of the cycle, and honoring those feelings.
In the cyclical view of the world, the seasons never end. One season follows another, inevitably and necessarily.
Each season has a set of feelings associated with it, and that are appropriate to it.
When it comes to the weather, we can see that there is no point in fighting or denying the shift from Spring and Summer to Autumn and Winter. It’s the same in dealing with human loss and transition. There’s no point fighting the seasons. Human life is inevitably filled with loss and the pain of loss. Life can’t be perpetual enjoyment. The point is to understand the seasons and learn the ways of dealing with the peculiarities of each season, and learn various ways of coping with the different seasons, and how to move on from one to the other.
Understanding the seasons
Through the metaphor of the four seasons, participants in Seasons for Growth find a vocabulary and a conceptual framework for talking about loss.
Seasons for Growth helps participants to see that stories don’t end – it’s just that the seasons move on. In a cyclical view of the world as seasons, the story never ends. You never get out of the story. The seasons simply continue.
Participants come to see that change involves genuine loss – Autumn – that led to real pain – Winter. But then they can also see that Winter doesn't have to go on forever. Winter is eventually followed by Spring. In my case, Spring means finding ways to move on and find new sources of identity and creativity.
Of course, this view of the Seasons doesn't remove the pain of loss. Participants still find themselves myself slipping back in Winter from time to time. But now they can see it for what it is . Remembering the loss isn't the end of the world any more. Participants are no longer in a void. They recognize that Winter is a temporary period. They can see that Winter is the natural response of grief to loss. It is a way of recognizing the pain. Being able to talk about the feelings associated with change equips better them to deal with it. The metaphor of the seasons enables them to talk to others about their loss and the feelings associated with it. They have a vocabulary for talking about it. And they see that it's not a perpetual Winter. They know that they will get back to Spring and Summer again. And this knowledge bolsters their confidence and helps them get back to Spring and Summer again sooner than they otherwise would have.
The shift from independence to interdependence
The normal management approach to the loss of identity caused by change -- if anyone ever dares raise the issue -- is to urge employees to “stop living in the past”, “grow up”, and “get over it”. That story had ended. Everybody is meant to have moved on. Everyone is expected to be “independent” and resilient, by putting their loss behind them and never talking about it and in effect denying the reality that it has actually happened. Since the story had ended, there was supposedly no place for it in their lives as “independent” adults. The model of an independent adult was someone who shucked off life’s problems, turned the page and moved on.
The choices presented are thus either (a) morbidly and wrongly living in the past in thinking about the loss, or (b) “moving on” and living in denial that it had ever happened.
The whole model of being an independent adult, who shucks off life’s problems, who turns pages, and forgets about loss and never talks about it with others, is a heroic model, but one that is essentially unlivable. It overlooks the fact that we as human beings are not just independent decision-making animals: we are interdependent. We are totally dependent for the first decade or two of our lives and also totally dependent for the last one or two decades of our lives. Even for the period of our adult lives when our current culture invites us to think of ourselves as independent we are actually interdependent on others for almost everything that makes life possible and worth living – our food, our water, our electricity, our transport, our communications, our language, our books, our entertainment. We are at best interdependent animals.
And nowhere is this more important in the area of dealing with loss and change. When the world is uncaring and unsupportive of the seasons that we happen to be going through, it just makes things worse. The model of independence has implicit within it a view of human nature that is out of sync with the world. The model of independence works moderately well for the season of Summer, for those moments when everything is going well and we are enjoying life with full satisfaction. But life isn’t just about Summer. Life also has inevitable loss and pain in it – i.e. Autumn and Winter.
The independence model is a model designed for perpetually fair weather. It isn’t a good model for human life which is inevitably full not only fair weather but of frequently inclement weather.
The model of independence is a very bad model when it comes to the loss of Autumn or the pain of Winter, when it tells us to “grow up”, and “get over it” and “turn the page”. By denying the reality of the seasons, it makes the pain worse, and makes it more difficult to deal with.
It is when the environment accepts and respects the reality of different seasons in our lives, and recognizes that we are interdependent and needing support and nourishment from our environment that we are better able to cope.
And that’s an interesting dimension of the Seasons for Growth program. It’s about building networks and communities that provide support through the different seasons of life. Providing a supportive metaphor of life that not only helps us to understand the different seasons in our life, and to be able to discuss these issues in a caring and respectful way, but also enables to recognize which season we are in, and think about the kinds of actions that are appropriate to that season, and also providing a supportive environment for others who are going through different seasons in their lives.
Implications for corporate change programs
Corporate change programs could learn from Seasons for Growth by drawing on its principal elements::
• It’s a shift from viewing the world through a linear lens (where stories end and live in a void) to one of viewing the world through a cyclical lens (where the story never ends – it just changes).
• It’s a shift from an unrealistic vision of individuals as heroically independent, able to shuck off life’s losses and pains, to a vision of individuals as inherently interdependent and entitled to support and nurturing as we cope with the transitions of living.
• It offers a helpful metaphor for understanding and coping with the inevitable loss and pain that accompanies all human life, including the changes involved in corporate change programs.
:Learn about Seasons for Growth
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #106
April 1, 2004
Use of humor as a leadership tool
April 1 seems like a suitable date to explore the use of humor as a leadership tool. George W. Bush tried his hand at it on March 24, 2004, at the Hilton Washington, site of the 60th annual Radio & Television Correspondents' Association dinner.
Bush as Entertainer in Chief
President Bush opened his 10-minute remarks to the gathering with a reference to what he referred to as Defense Secretary Donald Rumsfeld's "favorite show" on television which turned out to be . "Queer Eye for the Straight Guy," Bush said.
Bush went on to poke at his own malapropisms before unveiling a slide show titled "White House Election Year Album" that had the crowd chuckling. Yes, there were a few jabs at the Democrats, including a couple of shots taken at Democratic challenger John Kerry.
Mostly, though, he put up dorky-looking pictures of himself. A recurring joke involved photos of the president in awkward positions -- bent over as if he's looking under a table, leaning to look out a window -- accompanied by remarks such as "Those weapons of mass destruction must be somewhere!" and "Nope, no weapons over there!" and "Maybe under here?"
Was Bush's joke funny or effective?
At the time of the joke, a crowd of about 1,500 politicians, journalists and celebrities generally laughed along with the president's presentation.
After the event, Democrats suggested that Bush's comedy skit about the search for weapons of mass destruction was "tasteless and insensitive". Noting that Bush had used the weapons issue to justify a war in Iraq in which nearly 600 Americans have died and more than 3,000 have been wounded, Democrats said the president went too far.
"It's a tragic attempt at comedy, because the price that has been paid for this endeavor has been an enormous one," Sen. Frank Lautenberg (D-N.J.) said in an interview. Lautenberg was among the first Democrats to issue a statement condemning the comments yesterday.
CNN, which ran a tape of Bush's bit on its morning show, reported that it generated critical e-mails from viewers, one of whom called it "stomach-turning."
The correspondents dinner often features the president as a lighthearted after-dinner speaker. That is the spirit in which Bush made his comments, White House spokeswoman Claire Buchan said yesterday: "It's traditional at events like this dinner for the president to poke fun at himself."
She noted that Bush also paid a tribute to the military, including a group of Special Forces troops who buried a piece of the World Trade Center in Afghanistan in tribute to those killed on Sept. 11, 2001.
Democrats and skeptics however appear to have humor theory on their side. The incongruity theory of humor suggests that humor involves not only pointing out an incongruity that in some unexpected way "makes sense": for the joke to be funny, it should suggest a point or moral that is not really dangerous or harmful. By pointing to a series of events that killed and wounded so many Americans and Iraquis, Bush's joke risks sliding over into tragedy, rather than comedy.
Moreover, it has been pointed out earlier in these pages that Bush's better tactic as a humorist is to emphasize humor that is rather intellectual, thus counteracting his image as "not being the sharpest knife in the drawer". By drawing attention to this very issue, Bush's joke risks having his image from being "an amiable dolt" to being "a dangerous dolt".
What are people laughing at?
Thus judging from late-night humor, Bush still wears a dunce cap, while Kerry is portrayed as strange-looking, stiff and humorless.
"President Bush admitted that his prewar intelligence wasn't what it should have been," Jay Leno said. "We knew that when we elected him."
As for Kerry, "his poll numbers are moving, donations are moving, endorsements are moving," Leno said. "The only thing not moving about John Kerry -- his hair. His hair does not move."
The Washington Post suggests that the musings of Jay Leno, David Letterman, Jon Stewart and Conan O'Brien may have as much to do with shaping the candidates' public personas as a ton of newspaper stories, magazine features and cable arguments.
The Center for Media and Public Affairs has divined that Bush remains the biggest late-night target -- the butt of 213 jokes from Jan. 1 through March 9 -- compared with 53 for Kerry. Even in February, when Kerry was surging to the nomination, it was Bush hands down, 121 to 25.
"The president will always be the biggest butt of the jokesters," the center's Matthew Felling says.
But this is one contest where winning amounts to losing: 94 percent of the jokes about intelligence, and 89 percent about honesty, involved the president. Kerry drew nearly half the cracks aimed at a candidate's appearance.
Letterman said of Bush's campaign ads: "In one of the commercials you see George W. Bush for 30 seconds. In another commercial you get to see George W. Bush for 60 seconds. Kind of like his stint in the National Guard."
Leno however was appreciative of Bush's efforts at humor. He said that Oscar nominations had gone to Sean Penn, Jude Law "and, of course, George W. Bush for 'Iraqi Weapons of Mass Destruction.' "
Organizational and Business Storytelling In The News: Story #78
March 4, 2004
The story of successful cities and job outsourcing
It was a dismal news day in which the main business newspapers were obsessed with the stories of failed executives: Michael Eisner was finally ousted as Chairman of Disney; Sir Philip Watts was forced to resign as chairman of Royal Dutch Shell; and Bernard Ebbers pleaded not guilty to fraud charges in his former role as chairman and CEO of WorldCom. Rather than dwell further on these sad tales of human frailty, this page will focus on: what makes a city successful?
David Wessel writes on this interesting and important question in today's Wall Street Journal and suggests that if a city isn't sunny, it needs to be smart. Air-conditioning and tourism benefit Las Vegas and immigrants pour into Miami. But, asks Wessel, why is Boston doing so much better than Philadelphia? Minneapolis better than Milwaukee? Columbus, Ohio, better than Cleveland? In Scotland, why is Edinburgh doing so much better than Glasgow?
The answer according to economist Edward Glaeser is the same as for people: if you aren't born lucky or popular, be smart. American cities outside the Sunbelt that have particularly skilled and well-educated populations prosper. These cities do better at adapting when the economic winds shift.
The story of Boston
Boston for instance stagnated in the late 1700s as New York and Philadelphia, with better ports and locations closer to the South, rose. But Boston prospered, again, in the early 1800s because it had the people who crewed, captained and owned sailing ships important to that era's maritime economy. With the advent of the steamship, which required fewer skilled workers, Boston suffered. But the combination of Yankee money and ingenuity and cheap Irish labor turned Boston into a successful factory town. This phase peaked about 1920, and it began losing people around 1950. By 1980, three-quarters of Boston's houses were valued at less than the cost of building them. But Boston once again boomed as a center of finance and technology. Its population has been rising since about 1980. Its skilled people, both home-grown and recruited, are key.
Cities with bigger educated populations have more success than others at arresting urban decay, Glaeser's number-crunching finds. Skilled, educated workers may react more quickly when the economy changes, reinventing the cities in which they live, he speculates. Luring and keeping smart, educated people is crucial. Access to raw materials or major transportation arteries is no longer sufficient for urban success, and tax breaks to attract companies aren't always the right recipe. "Boston's ability to regenerate itself hinged upon its ability to attract residents, not just firms," Glaeser says.
The story of the Asian clusters and job outsourcing
But it's not simply clustering of smart people that make the difference. John Seely Brown will also be talking about the political and economic importance of turning clusters into ecologies in our forthcoming book, Storytelling in Organizations (to be published by Elsevier in July 2004). Clustering of skills in one place enables the creation of an ecology. The reason industrial clusters such as Silicon Valley really work is because of the substantial amount of cross-pollination of ideas. The difference between an ecology and a cluster is that the ecology really stresses not only the organic nature of things but the cross-pollination of ideas and the the re-mixing of ideas. Inside Xerox PARC, there were many different disciplines working in the same building that part of the magical power of that was the ability to cross-fertilize different sensibilities and different points of view, people from different disciplines, focused on some central type of problem. It's the cross-pollination of ideas that builds kind of a spiral of learning and increases innovation.
Brown points out that this is the hidden story of job outsourcing, which is not really about lower salaries overseas. What virtually no American writer or pundit or politician seems yet to understand, is that in certain parts of Asia, certain parts of Indian, Malaysia, Singapore, Hong Kong, and southern China, tight innovation ecologies are beginning to evolve that have specialized on particular kinds of skills. One skill is software in India. Another is the capacity to extrude plastics to build beautiful plastic moldings for consumer electronics as in an area just outside of Hong Kong. There are other examples all over southern China, Hong Kong and India, where highly specialized ecologies are leading a radical deepening of skills within that group.
These developments in Asia are analogous to what happened in Silicon Valley. This issue has suddenly emerged as something driving presidential politics. The challenge to the US is not so much wage arbitration, which everybody writes about, but the need to nurture these bootstrapping techniques that, when unleashed, can lead to a radical development of very specialized capabilities.
The problem of jobs in the US thus isn't primarily one of salaries or of passing laws that will "block jobs going overseas", as politicians naively suggest. It's more about creating the conditions that enable skill ecologies to flourish. In one sense, that has always happened, as we can see from the history of Boston. But what took place in Boston over centuries is now taking place at a dramatically accelerated pace - within a couple of years.
The implications for the US economy
To create a positive job story, the US needs to become smarter in creating ecologies with a highly distributed set of specialized capabilities.
Learn about the forthcoming book co-authored by John Seely Brown
Read the Wall Street Journal article
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #76
March 2, 2004
The story of data, information and knowledge: airlines
The role of story in understanding the difference between data, information and knowledge is illustrated in a story about the airline industry in the Washington Post on February 29. The question at hand is why are the upstart new airlines flourishing, while the established airlines are all in various degrees of difficulty? How can the upstarts make money while offering fares that are 40 to 70 percent lower than the established airlines? The article implies that the answer lies in doing the math ("The Math Flies") but the reality is the answer lies not in the math, but in the lens of a story through which we understand the math.
Data - "just the math, please!"
The article has an intriguing set of ten subtitles, comprising entirely figures:
• 1.3 million
• 84.6
• 2%
• 40%
• 23 and 0
• $215,000 a year
• $9.99 an hour
• 0
• $21 an hour
• 1
One cannot make any sense of these figures by themselves, because they are merely data. From this math alone, we can't see their connetion to anything at all, let alone the airline industry.
Let's have some information!
As we read the article, we acquire some information about the relationship of the data to the airline industry.
• 1.3 million is the potential airline passengers that low-cost carriers look for in a city
• 84.6 is the number of employees per aircraft at Southwest Airlines.
• 2% is the percentage of ticket sales that JetBlue Airways makes through traditional travel agents.
• 40% is the percentage of American Airlines passengers who connect to another flight to reach their final destination.
• 23 and 0 is the number of U.S. cities and foreign countries that JetBlue Airways, the nation's 11th-largest carrier, serves. It's a far cry from the 109 cities and 23 foreign countries reached by the nation's second-largest airline, United. And even those large amounts exclude United's code-sharing alliances with other airlines.
• $215,000 a year is the average salary for a captain at Delta Air Lines.
• $9.99 an hour is the amount of compensation going to benefits in the airline industry.
• 0 is the number of downtown ticket offices low-cost carriers such as Southwest, JetBlue and AirTran operate.
• $21 an hour is the average base pay, excluding benefits, of one of US Airways' 1,930 telephone reservation agents.
• 1 is number of types of planes JetBlue flies
But even with this information, we are still not very much further forward in understanding the airline industry.
We acquire knowledge, once we understand the story
It is only when we get to the story behind the numbers that we start to understand what is going on.
The story of 1.3 million potential annual airline passengers is that this is what a city must have before a low-cost carrier will even consider it as a potential destination. The low-cost carriers have no plans to take their large jets into such cities as Ithaca, N.Y., or Lubbock, Tex. "All these small communities want low-cost carriers, but they're more likely to get a moon launch than service from one of these airlines," said an expert.
It's Southwest Airlines that has 84.6 employees per aircraft. That's 's the figure the industry uses to measure employee productivity. Compare that number with 116 employees per plane at United Airlines, a number the airline achieved last year during its bankruptcy reorganization. The United number had been 173 in 2002. The United reduction resulted in a savings of about $2 billion and boosted productivity by 33 percent.
While JetBlue Airways makes 2 percent of its ticket sales through traditional travel agents. travel agents sell 61.2 percent of US Airways tickets. The number is about 50 percent for American Airlines. It costs an airline only about 1 percent of the ticket price to sell it online. While legacy carriers have drastically reduced the commissions they pay travel agents, selling the traditional way remains the most costly method -- between 7 and 9 percent of ticket value.
The percentage of American Airlines passengers who connect to another flight to reach their final destination - 40 percent - is significant because routes that include connections are more expensive than direct, nonstop flights. Southwest Airlines calculates that only 10 percent of its passengers connect to another flight to get where they're going, in large part because the airline focuses on flights to and from destination cities. In essence, the burden for any onward travel is on the passenger to arrange, not the low-cost carrier.
And so on, with the rest of the data.
In each instance, it's the story behind the numbers that enables us to understand them, and so acquire knowledge about the airline industry - why the sector is where it is, and where it is likely to be going. These aren't traditional stories with a hero, a plot, a beginning, a middle an ending, and a turning point. These are knowledge-sharing stories that do something else: they show a set of causal connections of events happening in time. These stories are the unheralded workhorses of the business world - mundane, bland and uninteresting - except to someone trying to understand the subject of the story - in this case, the airline industry..
Read the article in the Washington Post
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #67
February 22, 2004
Empathy: the mechanism of storytelling
"What a piece of work is a man, how noble in reason..." Just stop right there! If man really was possessed of a noble reasoning faculty, with a mind clicking away like the sleek calculating machine that poets and scientists have celebrated for thousands of years, how come storytelling is a more effective way to communicate? Why endless reasons put us sleep? Why do PowerPoint slides create a dazed look? Why do charts cause us to yawn, while the thought of a story immediately picks up our interest? Why can we listen enthralled to endless well-told stories without getting bored at all?
Science has begun to show us the answer with the recent work on empathy. The brain doesn't function as a calculating machine to make sense of the world. Instead, through story, the brain actually enables a person to live the experience almost as intensely as the protagonist of the story.
The latest experiments: I can feel your pain
On Friday, British researchers reported in the journal Science that the pain of another is in the brain of the beholder. The study showed that the brain reacts to the imagined pain of someone else as it does to one's own pain. Key regions of the brain appear to react as much to expectations and empathy as they do to actual painful stimulation, new studies demonstrate. In the study, when women watched male partners receiving a shock to the hand as when the women themselves got the jolt, some, but not all, of the same pain-sensitive regions of the brain were as active.
Likewise, American scientists report in the same publication that activity in certain pain-sensing parts of the brain slacked off in subjects after an application of a cream they were told would lessen the pain of a mild electric jolt or heat to the skin,
The studies bring home that "the brain has mechanisms to directly control what we feel; it actively controls the flow of sensory information that results in our perceptions," said Dr. Kenneth Casey, a professor of neurology at the University of Michigan and a neurology consultant to the VA Health Care System in Ann Arbor.
At the University College London, Dr. Tania Singer and colleagues monitored brain activation in 16 women when a painful shock was given to each woman's right hand or that of a male partner.
These researchers found that only regions associated with subjective pain processing -- those that evaluate how unpleasant pain is and anticipate pain -- were active when the partner was subjected to the shock, even when they couldn't see their partners' faces.
These findings suggest that humans are hard-wired to empathize. Singer speculated that you are probably better able to empathize with someone when you have experienced emotions and situations similar to those they are faced with.
Those and other brain regions were active when the women themselves were administered shocks.
"This suggests we use emotional representations reflecting our own subjective feeling states to understand the feelings of others," Singer said. "Presumably, our ability to empathize has evolved from a system for representing our own internal bodily states."
Among many directions for future research, Singer wants to see if liking or disliking someone changes your empathic response to their troubles. Other studies have already explored similar reactions when there is no preexisting social relationship.
And rejection really does hurt
Last October, a study published in Science showed that even in a trivial social like throwing a ball the pain of exclusion triggered the same responses in the brain.
Lonely hearts have spent millennia trying to capture the pain of rejection in painting, poetry and song. Now neuroscientists see it flickering in brain images from college students suffering even a relatively trivial social snub.
The feeling is familiar to anyone who has been passed over in picking teams or snubbed at a party -- a sickening, almost painful feeling in the stomach. Well, it turns out that "kicked in the gut" feeling is real, U.S. scientists reported in October. Brain imaging studies show that a social snub affects the brain precisely the way visceral pain does.
"When someone hurts your feelings, it really hurts you," said Matt Lieberman, a social psychologist at the University of California, Los Angeles, who worked on the study.
Lieberman, graduate student Naomi Eisenberger and colleagues set up a brain imaging test of 13 volunteers to find out how social distress affects the brain. They used functional magnetic imaging -- a type of scan that allows the brain's activity to be viewed "live." The 13 volunteers were given a task that they did not know related to an experiment in social snubbing.
Writing in the journal Science (Vol 302, page 290), Lieberman and Eisenberger said the brains of the volunteers lit up when they were rejected in virtually the same way as a person experiencing physical pain. "It would be odd if social pain looked like the exact same thing as someone-breaking-your-arm pain," Lieberman said in a telephone interview. "What it does look like is visceral pain." In other words -- like being punched in the stomach.
The area affected is the anterior cingulate cortex, a part of the brain known to be involved in the emotional response to pain.
In the experiment, the volunteers were asked to play a computer game. They believed they were playing two other people, but in fact played a set computer program. "It looked like a ball being thrown around between the three people," Lieberman said. Eventually, the game excludes the player. "For the next 45 throws they don't get thrown the ball," Lieberman said. "It is just heartbreaking to watch. They keep indicating that they are ready to be thrown to. This really affects the person afterwards. They report feeling social distress." The functional magnetic imaging verifies the physical basis of this feeling.
"We also saw this area in the prefrontal cortex. The more it is active in response to pain, the less subjective pain you feel," Lieberman said. "This part of the brain inhibits the more basic response." In the volunteers, those who had the most activity here reported the least distress in response to the snub.
"This doesn't mean a broken arm hurts exactly the same way that a broken heart does," says Lieberman. "But it shows that the human brain sounds the same alarm system for emotional and physical distress."
Lieberman describes the anterior cingulate cortex (ACC) as an emotional alarm system that draws the brain's attention to distressing or unexpected changes in the environment. The region lights up in response to pain, for instance, but also when a mother hear an infant's cry. But no one had tested whether social rejection also activated this area in humans.
The fact that disruption of even a trivial virtual relationship can activate the ACC shows how hard wired the response is. "The need for social connectiveness isn't just something self-help authors cooked up," says Lieberman. "It's a basic need programmed into a primitive part of our brains like thirst and pain and hunger."
The relevance to storytelling
If as Shakespeare suggests that man is in his apprehension "like a god", it would seem to lie less in his faculty to use logic and calculate and more in his ability to experience the feelings of others. It is this mechanism that gives storytelling its strength.
Read the Seattle Post-Intelligencer
Read MSNBC news
Read the New Scientist
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
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Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
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organizational storytelling Organizational and business storytelling: story #66
How storytelling changed the presidential campaign
Organizational and Business Storytelling In The News: Story #64
February 19, 2004
AT&T Wireless, Cingular and the story of mobile phones
As it nears its fourth birthday, after a short and unhappy life, AT&T Wireless as a stock owned by the public is about to die. The meaning of its life story? According to Floyd Norris in the New York Times, AT&T Wireless is an emblem of Wall Street fads, enriching investment bankers while damaging investors who follow those fads. AT&T Wireless was born not as a real stock but as a tracking stock, a way for boring old AT&T to demonstrate the value of its really hot property: wireless telephone service.
When it was launched on the market, investors got to pay $29.50 per share. The price eventually reached $36 a share, 22 percent over the offering price. If investors held on, they will probably end up receiving $15 a share from Cingular Wireless - a loss of around 50%. In July 2001, as AT&T finished its involvement with AT&T Wireless, it sold its remaining shares to the public at $17.05 a share. Investment bankers who collected fees for advising AT&T to set up the tracking stock then got more fees for advising it to dispense with that structure.
Who won? Who lost?
Cingular has now won battle for AT&T Wireless, but has it won the war? Joseph Schuman in the Afternoon Report of the Wall Street Journal notes that in business as in politics, frontrunner status should never be confused with an assurance of victory. Cingular Wireless's willingness to fork over $41 billion in cash for AT&T Wireless Services (plus interest, if there's a delay beyond December) was one that wasn't matched by the widely viewed auction favorite, Vodafone Group. The outcome that will vault Cingular to the top spot among U.S. mobile-phone carriers, however much that cost it, was said to be a surprise. But was it?
Vodafone's failed bid for AT&T Wireless would have been worse for Vodaphone if it had won. The fact that the world's largest wireless group engaged in an apparently heated auction for a second-rate asset has damaged its standing with investors and exposed its strategic weakness in the U.S.
Vodafone won't say how much it offered. But reports that it bid $38 billion (€29.75 billion) are credible in light of the $41 billion paid by Cingular Wireless. With a $38 billion offer, Vodafone would have generated dismal returns on its investment for at least four years. Some speculated that it's bid was merely a bluff, aimed at driving up the price that Cingular would have to pay. Whether it was intended or not, Vodaphone was fortunate not to win.
The market agreed. Shares of Vodaphone shot up on news of its loss, while the shares of Cingular's owners, SBC Communications and BellSouth, plunged when it was revealed how much it had paid to win the bride.
The story of the mobile phone industry
What does it all mean for the mobile phone industry? According to Matt Richtel in the New York Times, it's not enough these days to be just a phone company Supposedly the Cingular deal shows being either a traditional phone company or a mobile phone carrier may not be quite enough anymore.
The industry is moving into an era of telecommunications megacarriers; smaller, independent operations - whether offering wireless or traditional phone calling - are likely to feel increasing pressure to find partnerships and joint ventures, industry analysts said.
The sale of AT&T Wireless for $41 billion proved the enormous expectations for growth in the mobile phone business. But the deal also highlights larger transformations in telecommunications, as the consumer markets for traditional phone services, data transmission, mobile calling and even television converge into one industry.
Already, cable companies are offering video, high-speed Internet access and voice calls, and telephone companies are establishing partnerships with satellite companies to add television service to their voice and data transmission capabilities, said Jeff Kagan, an independent telecommunications industry analyst.
"It'll blur into one huge communications industry," he said. Wireless and traditional phone companies, he added, are beginning to see that partnerships or joint ownership agreements can give them an advantage over stand-alone competitors. Basically, the more services they offer under one roof, the greater their ability to sell packages, or bundles, of wireless and traditional phone minutes - with greater convenience for customers and perhaps lower prices.
The likely end of the story?
One aspect of the story is clear: everything is getting bigger. But another aspect of the story remains obscure: will the companies ever make money? Only time will tell whether their stories end as Peter Drucker once predicted, and as investors in AT&T Wireless learnt: a telephone company is a utility and no one (except the investment bankers) ever has - or ever will - make much money from a telephone utility.
Read Matt Richtel in the New York Times
Read Floyd Norris in the New York Times
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #63
A strange love story:
Americans and their SUVs
Organizational and Business Storytelling In The News: Story #63
February 18, 2004
A strange love story: Americans and their SUVs
The lead business story in the New York Times on February 16 concerned a strange love affair: Americans and their sport utility vehicles (SUVs). These gas-guzzling, environmentally-threatening, seemingly-unsafe vehicles have been the huge hit of the US car market. Everyone wants one. Now the New York Times asks: Can the sport utility vehicle, the bête noire of environmental advocates, be reinvented as a green machine?
This year, Ford and Toyota plan to sell the first two hybrid sport utility vehicles. With carlike mileage expected, the advent of the hybrid SUV may change the uniformly visceral antipathy to sport utility vehicles among environmental advocates, even if automakers are unlikely to sell enough hybrids to significantly reduce fuel consumption or pollution any time soon.
"I would definitely encourage people who need four-wheel-drive vehicles to look at these," said the Rev. Jim Ball, the president of the Evangelical Environmental Network, a small group that sponsored a widely publicized grass-roots campaign called "What Would Jesus Drive?" "These vehicles are one small step," he added, "but we've got a long way to go here."
Is gas guzzling really the worry? For someone who is buying a fifty-thousand-dollar Lincoln Navigator, an extra ten dollars at the pump isn’t that much money.
Why do so many people buy SUVs?
In January 5, 2004 issue of The New Yorker, Malcolm Gladwell analyzed the SUV culture. He asked whether SUVs were as safe as drivers feel in them and answered that question - they aren't! SUVs just feel safe. They create a reassuring illusion of safety. Statistics show that one is much more likely to die in an SUV than a regular sedan like a Honda Accord. But Gladwell points out that people are more concerned with feeling safe than with being safe, and that this results in the popularity of limited-feedback, poorly performing vehicles like SUVs.
There are other examples of what marketers call “overperformance”—the idea that there is a growing gap between the technical characteristics of a product and its real-world use. So people wear thousand-dollar mountain-climbing jackets to go to the store, or they type (as I am doing now) on a laptop computer that is capable of running a Pentagon war game. Technology in many areas has now gone beyond the actual requirements of use, so we’ve dissociated the two in our minds. The problem with SUVs is that there’s a dissociation between their sheer size and their off-road qualities and how they actually perform on the road. Unlike an over-powered laptop computer, an SUV has serious real-world consequences.
One school of thought says that SUV buyers harbor a kind of outdoorsy story. But Gladwell suspects it’s more basic than that: this is a vehicle that can flourish in the most extreme environment imaginable. If it can ford streams and climb over boulders, just think how safe and protected you’ll be on the trip to Wal-Mart! Of course, the logic behind that argument is backward: the trip to Wal-Mart is a good deal more hazardous than fording a stream in the wilderness, and we ought to be buying cars optimized for the conditions we actually drive in.
Who buys SUVs? Gladwell says that market research shows that SUVs tend to be bought by people who are "insecure, vain, self-centered, and self-absorbed, who are frequently nervous about their marriages, and who lack confidence in their driving skills." (I wouldn't see myself in this picture: I myself bought a Land Rover Discovery several years ago when my daughter was alarmed at the way my regular sedan handled in the snow and ice of Washington DC and I was looking for a four-wheel drive. Once I had bought it, I came to value the feeling of security that it gave, amid traffic that increasingly consists of other SUVs. Irrational? Perhaps. But reassuring? Certainly.)
Even with the immense popularity of SUVs, they don't sell themselves. How is the auto industry marketing them? The most dominant image in SUV commercials and ads is still the SUV mastering some off-road obstacle: fording streams, cutting through snowbanks, racing across virgin wilderness. Obviously, almost no SUV driver is ever going to use his or her car in those environments (in large part because racing across virgin wilderness in an SUV is, for the most part, illegal).
And safety? Now the problem is that with so many SUVs on the road, the risk of an accident with one changes the safety game. If every car on the road was a Mini, then the cost of an accident would be quite small: if you are in a Mini and you hit a Mini, you aren’t going to be that bad off. So, in the old days, the premium on active safety wasn’t so large. On the other hand, if every car on the road is an SUV., the cost of an accident grows substantially. When a Ford Explorer hits a Chevy TrailBlazer, both parties suffer enormously. And, if a Ford Explorer hits a Mini, the Mini driver is a dead man. A non-SUV simply cannot afford to get into any accident at all these days.
On a rational basis, the SUV has practically everything going against it. So why do Americans buy them in such large numbers? Because the SUV fits the current story of their life.
Read the New York Times
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books:
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organizational storytelling Organizational and business storytelling: story #62
Economists and the rest of the world: the problem of jobs
________________________________________
Organizational and Business Storytelling In The News: Story #62
February 17, 2004
Economists vs everybody else: the problem of jobs
This morning, the Wall Street Journal offers a spirited defense of the currently beleaguered economists. "Despite the Outcry Mankiw Was Right About Outsourcing" shouts Alan Murray's headline, while noting that economists happen to be at odds, not with one or two naysayers, but with the entire rest of the world.
It is "one of the great rifts in the current U.S. political debate. It isn't Republicans vs. Democrats; it's economists vs. everybody else. Mr. Mankiw's misstep was saying that outsourcing of jobs to foreign countries is a form of trade and is good for the U.S. economy. Even Democrats of the economic persuasion such as former Clinton Labor Secretary Robert Reich and former Council of Economic Advisers Chairwoman Janet Yellen were quick to come to his defense."
Even faithful-to-the-death Republicans like Rep. Richard Burr are calling on President Bush to fire Mankiw, but in an election year, Bush himself is seeming to side - surprise! - with the rest of the world. Last week he lamented the fact "there are people looking for work because jobs here have gone overseas."
Murray notes that "the great divide runs deep."
Non-economists look at each month's U.S. Labor Department report and see a grim story: an economy that can't produce enough jobs. Bush is set to become the first president since Herbert Hoover to preside over an economy with a net loss of jobs.
Economists look at the same report, and instead see a wonderful story. They see that wonder of the Western world - the rapidly growing US economy. With each passing month, the U.S. economy continues - miraculously - to produce ever more output using roughly the same number of workers. American productivity - output per worker - is booming. The new economy, it seems, is alive and well.
Why can't the rest of the world see the same wonderful story that the economists are seeing? Murray concedes that "productivity is an abstract concept that can't be directly observed or measured". But according to Murray, that doesn't make it any less real: "it is the secret of progress". It's ":the reason we don't spend our days gathering nuts and hunting squirrels." Fewer jobs? No problem! In the economists' world, "people producing more goods and services has been the key to the U.S. economy's surprising success throughout history." "Outsourcing" work" is merely a part of this wonderfully beneficent process. Surely it is churlish, economists like Murray suggest, for those outside the economic priesthood to observe that the benefits of this wonder of the Western world are somewhat unevenly distributed.
According to Murray, it will all come right in the long run. E.J. Dionne of the Washington Post quoted Keynes that in the long run we are all dead. But apparently Murray, like most economists, doesn't live in a world where mundane matters such as death are a concern. Murray plans to "be around 20 years from now" when everything will have miraculously sorted itself out - the US economy will have doubled and will be able to finance the costly retirement of the baby boomers. "Any effort to stop outsourcing or block trade will slow productivity growth and threaten that rosy future." Unfortunately Murray doesn't tell us how many jobs there will be in his rosy future story, or who will be the principal beneficiaries.
Will the wonderful dream world of the economists like Murray actually materialize? Unfortunately there are worrying signs that the rest of the world may be about to intervene and shake up these cozy economic assumptions. Murray notes that roughly 2.5 million jobs have disappeared since the recession began and these job losses seem to be concentrated in "battleground" states, where the election of 2004 may be determined. Even an economist like Murray can see that although economists constitute a numerous clan, they may not have enough votes to win the coming election. Strangely, voters who have lost their jobs, or who are afraid of losing jobs, aren't too interested in hearing economists describe what the world will be like in 2024. How bizarre! Why can't they enter the same dream world as the economists?
According to Murray, we must be patient: "we can wait an extra year to get to full employment, if the result is two decades of rising living standards." Sadly, Murray's future story of "full employment within a year" is not supported by any clue as to how the economy is going to shift from a mode in which millions of jobs have been lost to one where suddenly jobs will be created at an unprecedented pace. Could it be that the policies that have led to such a poor performance on jobs will continue to register a poor performance unless and until those policies are changed? This isn't a question that Murray wants to address.
Could it even be that the world of economists has become to a certain extent autistic and out of sync with the real world? This is certainly not a question that neo-classical economists can afford to be seen discussing in public, at least if they want to retain their standing in the economists' community.
Or could it be that the rest of the world is short-sighted in being reluctant to entrust their futures to the economic priesthood? Is the rest of the world paying too much attention to the chance of winning the jackpot in today's "Reverse Lottery" economy, and so sacrificing the rosy future that they want and need so dearly to inherit?
Whose story is right? On the one said, for the economists like Murray, the story of economic growth is so mesmerizing that they can no longer seem to observe the problem of job loss that is staring them in the face. For the rest of the world, the story of actual and imminent job loss is so gripping that it they cannot see the economic paradise that - economists say - lies just ahead. Whichever story turns out to be dominant, one thing is certain: the phenomenon of story and storytelling is itself playing a huge role in current economics and politics.
Read the Wall Street Journal
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #61
Economic growth and the story of the "Reverse Lottery" Economy
________________________________________
Organizational and Business Storytelling In The News: Story #57
February 12, 2004
The future story of the drug industry and big pharma
In this week's New Yorker, there is an extraordinary business story: the pipelines of new drugs of the big pharmaceutical companies have run dry.
James Surowiecki reports: "Merck is one of history’s most innovative corporations. It devotes three billion dollars a year and ten thousand people to the research and development of new drugs. So here’s a question: How many drugs for diabetes do you think all these men and women, this army of scientists, managed to come up with in the past four years? None. How many anti-cancer drugs? Zero. How many drugs that fight infectious diseases? Zero. Since 2000, in fact, Merck has introduced just three new drugs. Drug development is hard, but, by any measure, eking out less than one product a year is no way to make a living in the major leagues.
"Profitable as 'big pharma' remains—Pfizer made twelve billion dollars last year—a deep sense of anxiety prevails in the industry. That’s because Merck is no exception: most drug companies have what’s known as a pipeline problem. That is, the patents on the drugs that are now making money for them are about to expire, and they don’t have enough new drugs in development."
The story that has driven the decisions of the drug companies is that they could solve their problems by buying other drug companies and so inheriting their pipelines of new drugs. And so Pfizer bought Warner-Lambert and Pharmacia, Glaxo merged with SmithKline Beecham, and Astra merged with Zeneca. The French drugmaker Sanofi is bidding for Aventis, as analysts speculate that its pipeline has run dry. As Surowiecki puts it, "When the going gets tough, the tough go shopping."
Surowiecki however sees the story of solving their problems through acquisitions as an illusion. His story is that "the advantages of size are trumped by what are called “diseconomies” of scale: inertia, bureaucracy, risk aversion, clock-watching, office politics. Joseph Kim saw a lot of this firsthand, as a scientist at Merck for nine years, and now he likes to compare Merck to the Titanic. 'Companies like Merck have fantastic scientists working for them, but they also have these middle and upper layers of managers who are just taking up space,' he said last week. 'I like to call them ‘anti-bodies,’ because they just sit there being anti-everything. No one ever gets fired for saying no to a new idea.'"
For Surowiecki, small is beautiful, when it comes to drug research. Smaller companies "can concentrate on a few promising avenues of research and can offer enterprising scientists the freedom—and the potentially enormous rewards—of working as entrepreneurs. Just as, in the seventies, the locus of innovation in the tech business shifted from Goliaths like Digital and I.B.M. toward the smaller, more narrowly focussed start-ups of Silicon Valley, so it is shifting now from big to little pharma."
What strengths do the big companies have? According to Surowiecki, they have "a powerful brand, experience with regulators, and, not least, a legion of salesmen adept at “detailing” doctors about the virtues of new drugs."
The solution for the big companies? According to Surowiecki, "they need to rethink, radically, the way they do R. & D., or else get out of R. & D. entirely and focus on what they do best: marketing and distribution." To some extent, this is already happening, as the big drug companies already have licensing agreements with the smaller bio-tech companies. Surowiecki sees a future where the big companies market the successful research of the smaller companies.
Is smaller better? Whether the smaller companies will have the capacity to replenish dry pipelines of big pharma remains to be seen. Surowiecki's analogy with computer industry is less than perfect. Digital may have vanished, but IBM is still going strong. The problem with Digital was not its size, but its failure to adapt to some very obvious developments in the marketplace, such as the advent of the PC. By contrast, IBM did adjust - after facing a near-death experience in the early 1990s - and has continued to grow and innovate very successfully in the last ten years. Innovation does occur in small companies, but if they are successful, they grow big very fast: e.g. Dell. What one sees in the computer industry, as in any ecology, is a mix of large and small organizations, some flourishing, some dying, some forming partnerships, all in a state of constant flux.
A more likely scenario (or story) is that the drug industry will follow the same pattern as the computer industry. There will be some deaths among the big companies, particularly those who stick to the current model which is yielding declining returns. There will be some partnerships with smaller companies. Some big companies may manage to survive - for a time - by getting out of R&D and relying on these partnerships. Some smaller companies will grow very big, very quickly. But some of the big companies will figure out how to change their story by radically rethinking R&D and learning how to innovate: they will be the survivors.
Read the New Yorker story
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #56
OPEC's plan to cut production
causes spike in oil prices
________________________________________
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
Organizational and Business Storytelling In The News: Story #55
February 10, 2004
Narrative: The key to changing people's minds
One of the lead business stories in the New York Times on February 8, 2004 discusses the age-old riddle of how to get people to change their minds. As any marketer, manager or politician can tell you, not to mention anyone who has ever shared a roof with someone else, that can be a challenge.A big part of the answer will be no surprise to visitors of this website: narrative. The occasion is a preview of a forthcoming book by "Changing Minds: The Art and Science of Changing Our Own and Other People's Minds" by Howard Gardner, which is due to be published by Harvard Busines School Press in April 2004.
Howard Gardner, a psychologist and professor of cognition and education at the Harvard Graduate School of Education, is known for his theory that people have several kinds of intelligence. His book "Leading Minds" in 1995 was one of the first books to discuss the role of storytelling in leadership. His new book tackles the question of how to change people's minds.
He says it's not impossible, if you pull the right "levers" to dislodge set ways of thinking. All seven of these levers have names beginning with "re-." When you use the "resonance" lever, the points you make should feel right to the people you are addressing, he says. Then there are reason, research, "representational redescriptions" (presenting the same idea in various formats - through speech, pictures and deeds, for example) and "resources and rewards" (positive reinforcement). Finally, you can invoke "real-world events," like terrorist attacks, that can drastically affect how people think, and strive to counter people's "resistances" to changing views.
One arena where opinion can die hard is politics. So how could Howard Dean change the public perception that his outburst on the night of the Iowa caucuses showed that he had become unhinged? "The original prototype is Nixon's 'Checkers' speech, the grandfather of all televised mind-changing enterprises," Professor Gardner said. "But whether it's Nixon denying having taken money, or Clinton dealing with charges of having an affair or Dean dealing with the charge of being out of control, the issue is: How do we bring former supporters back to the flock and defang the resistance?
"The answer is: You try to develop a story about yourself that is different from the one that the press is carrying, a different narrative," he continued. "Nixon converted it into a family story about 'our dog Checkers' and the good Republican cloth coat; Clinton said, none of us is without sin, but look at the great family you'll be getting in the White House." Beyond that, Professor Gardner said, "you have to embody the story you're telling."
The approach can work in business. "Say the new C.E.O. comes in and says, 'We are not going to be hierarchical anymore,' " Professor Gardner said. "But you're the longtime regional product manager who's thinking, 'We've heard it before.' " But if the chief "spends a third of each week walking around the plant or office listening attentively to the staff, starts implementing their suggestions and closes the executive dining room, then that's what I call embodying the story."
According to the reporter, Francine Parnes, Warren Bennis, a professor at the University of Southern California's Marshall School of Business who specializes in leadership issues, says the book cuts to the core of what people in positions of influence do to get there, what he calls "including and engaging people in a shared belief system."
Professor Bennis points to Howard D. Schultz, the founder and chief executive of Starbucks. "He had to convince 80,000 of his employees that they aren't just selling a commodity, they are selling an experience," he said. "And he had to convince investors that people would pay a few dollars for hot drinks in a paper cup."
Gardner's book - and the New York Times article - constitute further evidence of the mainstream recognition for the key role of organizational storytelling.
Read the New York Times article
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #54
February 9, 2004
Shell: Fine performance can't save a weak story
Shell: Fine performance can't save a weak story
"The play was bad, the set was drab and the audience was hostile but [the performer] yesterday gave what was probably the best performance of his life. Had he a better story to tell, [he] might have won over most of the analysts and fund managers who turned up to yesterday’s presentation, held at the modest venue of the Tower Thistle Hotel to the east of the City, looking for blood in the shadow of London’s most famous execution grounds."
This was not, as you might think, the review of the latest theater opening of a West End production in London. Instead, it's a lead business story in the The Times: i.e. their report of last week's meeting of Shell chairman, Sir Philip Watts with financial analysts and investors. According to Carl Mortished in The Times, "gone was the defensiveness, the irritation and impatience that have spoilt his previous encounters with the world outside Shell.
"The chairman’s robust, no-nonsense approach had come to resemble a dressing-down by the commanding officer rather than a discussion about matters of mutual interest. But yesterday was different. Instead of his usual brisk march to the top table, flanked by deputies and clutching notes, Sir Phil walked alone and empty-handed on to the stage looking every bit the vicar addressing a congregation of the bereaved. It was a cunning move. Speaking without notes and peering into the bright lights, he looked a bit sad."
Watts briefly recited a litany of achievements — cash generation, record earnings and landmark projects — but quickly got to the quesiton of the oil reserves. According to Mortished, now "his audience leaned forward, hungry for the kill." This after all was what they had come for: to hear what had happened to the near-£4 billion shortfall in proven oil reserves. When the news was announced on January 9, 2004, Watts declined to appear to give an explanation, and there were calls for his resignation.
Watts apologised for not appearing then, and, according to Mortished, his apology now was "full but not abject. 'I can come up with a perfectly logical explanation but the fact of the matter is it was a mistake. “I regret that and I am sorry I wasn’t there. I’m sorry I got it wrong.' There was the briefest of pauses and then gruff (but thoroughly tamed) Sir Phil was back telling us how the company was dealing with the problem."
Mortished reports: "It was left to Walter van der Vijver, the exploration director, to turn over stones and explain the missing 3.9 billion barrels of oil and gas which it was forced last month to remove from its balance sheet. There were a lot of wriggling worms, almost a decade of misrepresentations in Nigeria, Oman and Australia but Mr Van de Vijver offered no hostages. In an ordinary company, those responsible would walk the plank, but at Shell everyone is responsible and no one is to blame."
Watts vowed to stay in his post even as the oil giant reported disappointing year-end results and surprised markets by forecasting no improvement in production levels until 2006. Watts said in a conference call that he was "determined" to fix the company's problems and that he had "wholehearted" support of the board. He reaches the company's mandatory retirement age of 60 in June 2005.
Responding to pressure for more oversight of corporate management, Watts said he would be open to reconsidering the much criticized two-headed structure of the company.
But according to the New York Times, investors said the concession came too late to improve their opinion. The profit report and forecast, coupled with the company's surprise reduction in reserve estimates on Jan. 9, have fundamentally altered the way that the company is viewed, investors said.
"At some point, we'll start worrying about them not having enough oil to produce in the future," Ivor Pether, head of portfolio construction at Royal London Asset Management, said. "They need to boost reserves relative to production by 25 percent."
In a report titled, "Shell Transport Trading: There are ways to sleep easier," Merrill Lynch analysts wrote of the fourth-quarter earnings: "Overall, a very disappointing set of results, particularly given that Exxon-Mobil and Chevron Texaco last week beat the market consensus by 15 percent and 8 percent, respectively."
And so analysts and investors continue to try to fathom the emerging Shell story. "Perception has gone through a seismic shift," said Pether. Shell was once seen as "ultraconservative, but very high quality, with a lots of good projects out there."
But now what? Was it a single big mistake, and everything in Shell is still sound? Or is it part of a pattern, a harbinger of more bad news down the pike? What sort of management is this? If they make a mistake like that, what else have they done? Or not done? What sort of results will they produce in future? And after all, what sort of a company are we dealing with here? Whatever the answers to these questions turn out to be, they will come in the form of - a story.
Read the New York Times
Read The Times story
Organizational and Business Storytelling In The News: Story #54
February 9, 2004
Shell: Fine performance can't save a weak story
"The play was bad, the set was drab and the audience was hostile but [the performer] yesterday gave what was probably the best performance of his life. Had he a better story to tell, [he] might have won over most of the analysts and fund managers who turned up to yesterday’s presentation, held at the modest venue of the Tower Thistle Hotel to the east of the City, looking for blood in the shadow of London’s most famous execution grounds."
This was not, as you might think, the review of the latest theater opening of a West End production in London. Instead, it's a lead business story in the The Times: i.e. their report of last week's meeting of Shell chairman, Sir Philip Watts with financial analysts and investors. According to Carl Mortished in The Times, "gone was the defensiveness, the irritation and impatience that have spoilt his previous encounters with the world outside Shell.
"The chairman’s robust, no-nonsense approach had come to resemble a dressing-down by the commanding officer rather than a discussion about matters of mutual interest. But yesterday was different. Instead of his usual brisk march to the top table, flanked by deputies and clutching notes, Sir Phil walked alone and empty-handed on to the stage looking every bit the vicar addressing a congregation of the bereaved. It was a cunning move. Speaking without notes and peering into the bright lights, he looked a bit sad."
Watts briefly recited a litany of achievements — cash generation, record earnings and landmark projects — but quickly got to the quesiton of the oil reserves. According to Mortished, now "his audience leaned forward, hungry for the kill." This after all was what they had come for: to hear what had happened to the near-£4 billion shortfall in proven oil reserves. When the news was announced on January 9, 2004, Watts declined to appear to give an explanation, and there were calls for his resignation.
Watts apologised for not appearing then, and, according to Mortished, his apology now was "full but not abject. 'I can come up with a perfectly logical explanation but the fact of the matter is it was a mistake. “I regret that and I am sorry I wasn’t there. I’m sorry I got it wrong.' There was the briefest of pauses and then gruff (but thoroughly tamed) Sir Phil was back telling us how the company was dealing with the problem."
Mortished reports: "It was left to Walter van der Vijver, the exploration director, to turn over stones and explain the missing 3.9 billion barrels of oil and gas which it was forced last month to remove from its balance sheet. There were a lot of wriggling worms, almost a decade of misrepresentations in Nigeria, Oman and Australia but Mr Van de Vijver offered no hostages. In an ordinary company, those responsible would walk the plank, but at Shell everyone is responsible and no one is to blame."
Watts vowed to stay in his post even as the oil giant reported disappointing year-end results and surprised markets by forecasting no improvement in production levels until 2006. Watts said in a conference call that he was "determined" to fix the company's problems and that he had "wholehearted" support of the board. He reaches the company's mandatory retirement age of 60 in June 2005.
Responding to pressure for more oversight of corporate management, Watts said he would be open to reconsidering the much criticized two-headed structure of the company.
But according to the New York Times, investors said the concession came too late to improve their opinion. The profit report and forecast, coupled with the company's surprise reduction in reserve estimates on Jan. 9, have fundamentally altered the way that the company is viewed, investors said.
"At some point, we'll start worrying about them not having enough oil to produce in the future," Ivor Pether, head of portfolio construction at Royal London Asset Management, said. "They need to boost reserves relative to production by 25 percent."
In a report titled, "Shell Transport Trading: There are ways to sleep easier," Merrill Lynch analysts wrote of the fourth-quarter earnings: "Overall, a very disappointing set of results, particularly given that Exxon-Mobil and Chevron Texaco last week beat the market consensus by 15 percent and 8 percent, respectively."
And so analysts and investors continue to try to fathom the emerging Shell story. "Perception has gone through a seismic shift," said Pether. Shell was once seen as "ultraconservative, but very high quality, with a lots of good projects out there."
But now what? Was it a single big mistake, and everything in Shell is still sound? Or is it part of a pattern, a harbinger of more bad news down the pike? What sort of management is this? If they make a mistake like that, what else have they done? Or not done? What sort of results will they produce in future? And after all, what sort of a company are we dealing with here? Whatever the answers to these questions turn out to be, they will come in the form of - a story.
Read the New York Times
Read The Times story
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #53
February 8, 2004
Creative destruction: the face of corporate transformation
Washington DC is a government town. It was set up explicitly as the seat of the US Government and initially had no other purpose. Over the years, it also became the headquarters for a number of businesses that prospered. More recently, these businesses have vanished as the forces of capitalism crush inefficiencies and draw on new energies from elsewhere.
Last week saw the effective end of yet another local business: Giant supermarket. The Washington Post reported that the owners of Giant Food LLC moved to end local management of the grocery chain, putting hundreds of jobs at risk and closing a chapter at the Washington area retailer that pioneered the supermarket concept on Georgia Avenue in the District 68 years ago.
Giant is one of many homegrown institutions to be gobbled up by large, out-of-town corporations. Since their sales, once-dominant retailers Peoples Drug Stores, Woodward & Lothrop, Hechinger, Crown Books and Fantle's Drug Stores have vanished. Technology leaders such as MCI Communications Corp. and America Online Inc. remain, but have experienced wrenching internal transformations.
The Giant name will remain, but beleaguered Dutch conglomerate Royal Ahold NV, which bought the company almost six years ago, said it will hand over control of Giant's operations to a team of Stop & Shop Supermarket Co. executives in Quincy, Mass.
Giant employs 550 in its Landover headquarters. Over the next year, executives at Stop & Shop will review each department's status, looking for ways "to create efficiencies," said Giant spokesman Barry F. Scher.
The company is likely to target Giant operations that duplicate those already performed at Stop & Shop, analysts said. Those include Giant's information technology, human resources and accounting departments, Scher said. It remains unclear how many jobs will be lost when the consolidation is complete. "We just don't know yet," Scher said. "It's too early."
Last week's actions are the latest in a series of steps that Ahold has taken to merge Giant into its operations. Since 1998, when Ahold bought the chain, executives have eliminated several in-house manufacturing operations, cut employee hours at stores and changed which products are stocked on shelves.
Under the reorganization, Stop & Shop's top executives will immediately replace their counterparts at Giant, creating one management team, the company said. At least three senior Giant executives will remain at the company through the end of the year.
The change comes as Giant is encountering fierce competition from discounters such as Wal-Mart Stores Inc. and grocery chains such as Wegmans Food Market Inc. As an independent grocery chain, Giant built a loyal consumer base by developing a reputation as a customer-friendly, community-oriented retailer.
When Ahold purchased it, officials promised the store would retain its strong community ties and vowed the Dutch company had the deep pockets to improve store operations. Such promises now appear unlikely to be fulfilled.
Some changes that had already taken place upset employees. Giant executives in 2002 ended publication of a popular company newsletter, more than five decades old, called "We" that contained news on employees and their families. They replaced it with an internal company Web site.
Michael Barbaro reports that inside the company's headquarters in Landover, former executive say, the company's culture itself changed. Israel "Izzy" Cohen and his successor, Pete L. Manos, gained reputations as hands-on executives. Manos, former Giant executives say, began many mornings sitting in the lobby of Giant's headquarters, greeting workers as they arrived.
By comparison, Baird, who replaced him after the merger, seemed aloof, some employees said. Baird kept his primary residence in Massachusetts and commuted between Boston and Landover. When Baird introduced himself to employees in 1999, according to two former executives, he said he would not be roaming the company's corridors shaking hands. "He said he would be in his office on the sixth floor if anyone needed him," one said.
Manos says the spending cuts Ahold made were largely inevitable. "In order to survive in this business, you have to cut costs," he said. "Some of the luxuries we were offering were not cost-efficient," he said of his tenure.
At Giant's six-story headquarters, employees gathered Wednesday morning in the cafeteria to meet their new chief executive. Smith announced the rest of the new management team, who did not attend the meeting but rather remained in Boston, Scher said. Employees yesterday described the mood at the company as grim. "It's like a death in the family," said one official, who spoke on the condition of anonymity.
Ahold's management of Giant is the latest chapter in the struggle that supermarkets - particularly unionized chains such as Giant - encounter as they try to compete against discount chains such as Wal-Mart and Target Corp., which have opened their own grocery departments and operate more efficiently.
And so the story of capitalism goes on. The Giant team is out and for them, this feels like death. The Stop and Shop team is in and for them that's a triumph. At least for now, they have survived.
Read the Washington Post story
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
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Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
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organizational storytelling Organizational and business storytelling: story #52
The US economy and the story of the jobless recovery
________________________________________
Organizational and Business Storytelling In The News: Story #51
February 6, 2004
The story behind Vodaphone's bid for AT&T Wireless
Peter Drucker, perhaps the smartest business analyst ever, once said that phone companies are basically utilities and no one ever made a fortune out of a utility. Not that there haven't been many attempts. Utilities like Enron and WorldCom figured prominently in the scandals of the so-called Corrupt Economy as executives tried ingenious, albeit illegal, ways to convince investors that they had something more exciting than a plain old utility. But when the bubbles burst, it turned out that there was nothing inside the Enron bubble and WorldCom emerged as a plain old utility that had performed some outlandish accounting tricks.
One of the areas where things can get exciting of course, even for utilities, is the dating game of mergers and acquisitions. Here the dull routines of "execute, execute, execute" and the patient tweaking of "structures, processes, roles and incentives" are abruptly transformed into opportunities for immense gain and loss, as vast sums of money are at stake when control and ownership of whole companies are put in play. During the takeover games, it becomes obvious that we are not in a stable linear world that can be engineered, but rather in a complex chaotic situation of feints, ruses, bluffs and counter-moves that can only be understood - through a story.
The current situation of Vodaphone, the world's largest mobile phone operator, is an illustration. The lead story in this morning's Wall Street Journal is: "Vodaphone is weighing a bid for AT&T Wireless as a Feb. 13 deadline looms for suitors to make formal offers."
The current turmoil was instigated when AT&T Wireless, the third-largest U.S. wireless carrier, put itself up for sale two weeks ago, hoping to spark a global bidding war. Bids are to be submitted by February 13.
David Pringle reported yesterday in the Wall Street Journal that "investors, nervous that Vodafone Group PLC will blow a stack of money in the auction for AT&T Wireless, have knocked the United Kingdom cellular-phone operator's shares down 10% since mid-January. Vodafone hasn't exactly been assuaging their fears, saying only that it is 'watching developments; in the U.S. marketplace."
But, according to Pringle, there's a cynical twist: "some investors see as the most likely scenario, and it isn't necessarily bad for Vodafone shares: The company throws in a bid for AT&T Wireless, but it doesn't really want to win. This way, it could upset the plans and finances of other interested bidders yet avoid a huge acquisition that analysts say would dent its earnings for years to come."
"Logically, they have to be involved, even if it is only to muddy the waters for any prospective competitors," says David Lis, a London fund manager with Morley Fund Management, a unit of Aviva PLC. "I wouldn't expect them to go ahead with buying AT&T Wireless."
This morning's lead story in the Wall Street Journal, put together by Almar Latour, Jesse Drucker and Robin Sidel, is that maybe Vodaphone is serious about making a play after all.
The bidding process is complicated by the fact that some of the players are already in bed together.
• Verizon Wireless is jointly owned by Vodaphone (45%) and Verizon Communications (55%). If Vodaphone acquired AT&T Wireless, it would need to pull out of its partnership in Verizon Wireless.Vodafone and Verizon are "in discussions" about how to manage their relationship during the bidding process should Vodafone decide to proceed.
According to the Wall Street Journal this morning, Vodafone doesn't want to be left empty-handed in the U.S. if it makes a bid for AT&T Wireless and fails to win. Moreover, if Vodafone succeeds in acquiring AT&T Wireless, the path to an exit from Verizon Wireless -- and the price tag for such a move -- must be defined.
Has Vodaphone decided to make a bid? Not yet, apparently, but "that situation could change in coming days" according to the Wall Street Journal. But a move to walk away from Verizon Wireless would only follow if Vodafone can be successful in a play for AT&T Wireless.
Who are the other players in this global dating game?
So far, Cingular Wireless has emerged as a front-runner by making an initial offer of $30 billion in cash for AT&T Wireless. .
• Other potential suitors include NTT DoCoMo Inc. of Japan and Nextel Communications Inc. of Reston, Va. Cingular is a joint venture of phone companies SBC Communications Inc., San Antonio and BellSouth Corp., Atlanta.
• Verizon officials have made no secret of their desire to own all of Verizon Wireless, the largest U.S. wireless carrier. So maybe Verizon wants to break its relationship with Vodaphone anyway? Verizon might prefer that AT&T Wireless be bought by Vodafone rather than Cingular, which is owned by Verizon's main rivals.Maybe, but that won't come cheap: The exit clause, as currently structured, would require Verizon to pay Vodafone as much as $20 billion over a period of at least a year, beginning this summer.
• Meanwhile, Vodafone's global ambitions still are hampered by a mere minority stake in the world's most lucrative cellular market. The two companies have bickered in the past over technology issues.
If Vodaphone does make a bid, will it be for real? "You would want to make sure you have a bid on the table to make sure the others have to pay more," says Charles Luke, a fund manager with Aberdeen Asset Management. "On balance, I doubt they will make a serious bid."
As the situation unfolds, the participants are as jittery as teenagers in advance of the high school prom, trying to figure out who really likes whom and whether some existing couples will split up and who will eventually go with whom to the dance. As in high school, the only way to understand all this is: listen to the stories. The difference from high school is that the outcome of the stories here has massive financial implications.
Read article of Almar Latour et al in the Wall Street Journal February 6
Read David Pringle's article in the Wall Street Journal February 5
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #50
Booz Allen: narrative and why most companies are dysfunctional
________________________________________
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Organizational and Business Storytelling In The News: Story #50
February 5, 2004
Booz Allen: why are most companies are dysfunctional?
It's not a headline in the Wall Street Journal or the Financial Times this morning, but perhaps it ought to be: a just-published study by Booz Allen has the startling conclusion: most companies are dysfunctional. More than 60% of respondents found their organizations exhibit “unhealthy” profiles of one kind or another.
And larger companies are more dysfunctional than smaller companies. As companies grow, they centralize and demonstrate more military traits. Once their annual revenues cross the $1-billion threshold, operations necessarily decentralize, but often badly.
Moreoever the top of these organizations is typically out of touch and frustrated. Survey results indicate sharp differences between senior management responses and those of lower-level groups, suggesting a disconnect between senior executives’ perceptions of the organizations they believe they’ve established, and the organizations they are actually running. Although senior managers likely view their self-professed involvement in operating decisions as good, junior managers overwhelmingly report feeling micromanaged.
Bottom line: less than half of all respondents agree that “important strategic and operational decisions are quickly translated into action” in their organization.
Seven types of organization
In the study entitled, "Profiles in Organizational DNA Research and Remedies", Gary Neilson, Bruce Pasternack, Decio Mendes, and Eng-Ming Tan suggest that there are seven types of organization (interesting how often that number seven comes up - is it because there are really seven types, or is it because we can only remember seven things at once?). The first three types of organization get a passing grade from Booz Allen:.
• The Resilient Organization. This organization is flexible enough to adapt quickly to external market shifts, yet it remains steadfastly focused on and aligned around a coherent business strategy. It attracts motivated team players and offers them not only a stimulating work environment, but also the resources and authority necessary to solve tough problems effectively. (Sounds great, but the article notes that there aren't very many of them.)
• The Just-in-Time Organization. Although not always proactive in preparing for impending changes, this organization has demonstrated an ability to “turn on a dime” when necessary, without losing sight of the big picture. Despite its frustrations, however, it can still be a stimulating and challenging place to work.
The Military Organization. Often driven by a small, hands-on senior management team, this organization succeeds through sheer force of will...that of its top executives. It can conceive and execute brilliant strategies—sometimes repeatedly—but its middle management bench can be shallow and short lived. This organization’s biggest liability is preparing for growth beyond the tenure of its current leaders. And when the environment shifts, this kind of organization has real difficulty making the necessary adjustments.
Then we get to the four dysfunctional types of organizations
• The Passive-Aggressive Organization. So congenial that it seems conflict free, this is the “everyone agrees but nothing changes” organization. Building a consensus to make major changes is no problem; implementing them is what proves difficult. Entrenched, underground resistance from the field can defeat corporate’s best efforts. Lacking the requisite authority, information, and incentives to undertake meaningful change, line employees tend to ignore mandates from headquarters, assuming “this too shall pass.” Confronted with an apathetic organization, senior management laments the futility of “pushing Jell-O.
• ”The Fits-and-Starts Organization. Scores of smart, motivated, and talented people populate this organization, but they do not often pull in the same direction at the same time. When they do, they can execute brilliant, breakout strategic moves, but the organization typically lacks the discipline and coordination to repeat these successes on a consistent basis. It is an environment that lures intellect and initiative—those people with an entrepreneurial bent—because the opportunities to pursue an idea and exercise responsibility are abundant. The result, however, can be an organization with a disjointed self-image on the verge of spinning out of control.
• The Outgrown Organization. This firm has outgrown its organizational model; it is bursting at the seams. Too large and complex to be effectively controlled anymore by a small team of top executives, it has yet to “democratize” decision-making authority. Consequently, much of the organization’s potential remains untapped. By keeping power centralized, the organization tends to move slowly and often finds it cannot get out of its own way. Such firms routinely miss opportunities and consistently fail to execute effectively.
• The Overmanaged Organization. Burdened with multiple layers of management, this organization tends to suffer from “analysis paralysis.” When it does move, it moves slowly and reactively, often pursuing opportunities later or less vigorously than its competitors. More consumed with the trees than the forest, managers spend their time checking one another’s work rather than scanning the horizon for new opportunities or threats. These organizations, which are frequently bureaucratic and highly political in nature, tend to frustrate self-starters and results-oriented individuals.
Booz Allen will of course (for a small fee) help companies diagnose themselves and find in which category they find themselves.
What remedies are proposed?
Perhaps more important however are the remedies for such a grim situation, and this is where the article is disappointing. What does it propose? On the surface there is a diverse set of remedies, couched in the language of biology ("DNA" "living organisms") but when we look closely at the actions recommended, the biological language almost immediately switches to engineering. The "DNA" is apparently composed of "building blocks" and "processes" which must be "realigned" and "restructured". "People", it seems, are also treated as things to "realigned." These approaches, as it happens, are what consulting firms traditionally make money doing, as well being what caused the problems in the first place.
Thus the remedies reflect the traditional the engineering approach,including:
• The decision rights, information, motivators, and structure) are to be "realigned and adjusted to improve organizational effectiveness."
• Steps must be taken to "align people, incentives, and knowledge to overcome organizational inertia."
• "The solution lies in adapting the “DNA” of the organization to identify, isolate, and optimize complexity."
• "The organization must eliminate the reason for 'shadow staffs', and eliminate duplicative and wasted effort for good.
• Companies must not only apply traditional supply-side cost restructuring (e.g., business process reengineering (BPR), shared services, ERP, strategic outsourcing), but also demand-side optimization strategies.
• "Companies need to put in place more formal and engineered management systems, processes, and roles to keep diverse operations running smoothly and on the right path."
Unfortunately, these engineering approaches won't solve the problem of the dysfunctional organization, whose problems were caused by these approaches in the first place. No amount of juggling of structures, processes, roles and incentives will offer more than temporary relief.
In effect, Booz Allen is back in the world of the standard management manual. Fix the systems. Re-engineer processes. Streamline procedures. Re-form and flatten the organizational structure. Analyze things in terms of grids and charts. Develop plans in which individuals are programmed to operate like so many obedient computers. Hone our interpersonal mechanics and build skill inventories. Bring to our difficulties a fix-it attitude, as though our past errors can be easily corrected with straightforward explanations.
The cheerful but deluded optimism of this thinking sheds little light on why some organizations flourish and grow and are widely admired, and then suddenly collapse with the abruptness of a punctured balloon, or why some managements endure the most severe tribulations and difficulties, while others stumble at even a mild bump. The mechanistic solutions don't fit the complexity, the mess, the jumble, the clutter, the chaos, the confusion, the living core of modern organizations. And it rarely succeeds in persuading organizations to change in any fundamental way.
Trying to fix sick organizations solely by "realigning structures, processes, roles and incentives" is like a medical practitioner trying to cure sick human beings with a hammer and a screwdriver. It may not be irrelevant, but generally, it's not going to get the job done.
The missing ingredient: narrative
For regular visitors to this website, the ingredient that is missing in understanding and solving the problems of the living organization will be obvious: narrative. Narrative is the bloodstream of the living organization. Narrative is the vehicle by which anything of significance gets communicated and how anything gets decided in a firm and how enduring corporate cultures emerge. We can only understand what is going on in a living organization by understanding its narratives, and we can only turn sick organizations into healthy ones by dealing with its narratives.
How? How does one go about using narrative to deal with dysfunctional corporate behavior? There is a great deal of material on this website on that issue, as well the books that I've written (The Springboard) and the ones that are forthcoming (Squirrel Inc; Storytelling in Organizations). I also offer tailor-made workshops to organizations that seriously want to make a real change in their corporate story, instead of going through the motions and repeating engineering approaches that haven't worked.
Interestingly, Booz Allen has published elsewhere penetrating insights on the role of narrative in organizations, for instance Bill Birchard's article in 2002 or Jay Ogilvy's article on Sartre in 2003
But sadly, it seems that narrative thinking has yet to enter Booz Allen's DNA in any significant way. When it does, Booz Allen may be able to get beyond diagnosis and actually solve the problems they have identified. Why? Because then, they will have understood the story.
Read the Booz Allen article
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop |
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #49
Companies limit health plan coverage for retirees
________________________________________
Organizational and Business Storytelling In The News: Story #49
February 4, 2004
Companies limit health plan for retirees
One of the mysteries of the story of the US economy is this: if the economy is doing so well, as sizzling economic growth numbers and soaring corporate profits loudly proclaim, how come there is such widespread economic misery in the land? Are people blind to the hard numbers? Or is something else going on? One piece of the puzzle was revealed yesterday in one of the lead business stories in the New York Times. It turns out that companies are finding ingenious new ways to cut costs, for instance, by cutting off health benefits to retirees.
According to the reporter, Milt Freudenheim, "employers have unleashed a new wave of cutbacks in company-paid health benefits for retirees, with a growing number of companies saying that retirees can retain coverage only if they are willing to bear the full cost themselves. Scores of companies in the last two years, including the telecommunications equipment giants Lucent Technologies and Alcatel and a big electric utility, TXU, have ended medical benefits for some or all of their retirees and instead offered to let them buy coverage through a group plan. This coverage is often more expensive than many retirees can afford."
Experts expect that the trend, driven by the fast-rising cost of health care, will continue, despite the billions of dollars that the government will distribute to companies that maintain retiree health coverage when the new Medicare drug benefit begins in two years. In contrast to pension financing, companies are not obligated to set aside funds to pay for retirees' health benefits, and the health plans can usually be changed or terminated at the company's choosing, with no appeal available to the retirees.
The costs can be a shock. According to surveys by benefits consultants, companies that offer health benefits to retirees typically have subsidized about 60 percent of the premium. Losing that support all at once can mean hundreds of dollars a month in unexpected costs. Moreover, those with medical problems are often rejected by commercial insurers, Frank McArdle, a health policy expert with the Hewitt Associates benefits consulting firm in Washington noted.
Last year, only 36 percent of companies with 500 or more workers still offered a retiree medical plan to at least some retirees not yet eligible for Medicare, down from 50 percent in 1993, according to a recent survey by Mercer Human Resource Consulting.
Mr. McArdle of Hewitt said that the roster of companies offering retiree health benefits had dwindled as medical costs soared and employers encountered new competitors, both overseas and at home, that rarely covered retirees.
Last month, a study for the Kaiser Family Foundation by Hewitt Associates found that among employers that have maintained retiree coverage, about 15 percent have required at least some retirees to assume the full cost of their insurance in the last two years. Another 31 percent said they would probably adopt these so-called access-only health plans within the next three years.
"Twenty years from now, no company will offer retiree health care," said Uwe Reinhardt, a health economist at Princeton University.
Thus the divergence of the story of the economy and the stories of the participants in the economy becomes clearer. While retirees - particularly the less well-off - understandably feel bitter when companies for whom they may have worked for decades renege on explicit or implicit promises to provide health coverage at a time in their lives when they may have no alternative, corporate executives and their shareholders (who also include better-off retirees) can rejoice in the story of finding ingenious new ways to cut costs, boost profits and make the economy grow. Both sets of stories have their validity. Together, they shed light on the broader story of misery amid plenty.
Read the New York Times story
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(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
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organizational storytelling Organizational and business storytelling: story #48
Bush's budget projects deficit
of $521 billion
________________________________________
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Organizational and Business Storytelling In The News: Story #47
February 2, 2004
President Bush launches intelligence inquiry
It's easy to understand why President Bush's decision to launch an inquiry into the failures of intelligence in Iraq should be the top general news story on Monday morning February 2, 2004. The decision to launch a high-profile investigation into why the administration wrongly claimed that Saddam Hussein possessed mass destruction weapons constitutes an about-face by Mr Bush, who previously opposed such an inquiry. The decision - expected this week - may temporarily defuse the controversy triggered last week when David Kay, the former chief US weapons inspector in Iraq, said that Iraq had no stockpiles of chemical or biological weapons and only a rudimentary nuclear programme. But it runs the serious risk of producing embarrassing revelations in the middle of a presidential election year. The new inquiry will also increase the pressure on Tony Blair, the UK prime minister, to retreat from his previous insistence that weapons of mass destruction would still be found in Iraq. It seems likely that the inquiry and its outcome will be at the center of politics in the US and UK for at least the year to come.
But it's easy to overlook the business interest of the inquiry. The intelligence industry is a large one. The CIA alone is said to have a budget of some $30 billion, and many private contractors are directly or indirectly dependent on the scale and direction of intelligence activities. The inquiry will have a direct impact on the conduct of intelligence activities in future.
Of particular significance will be the relative importance of human intelligence (intelligence gathered by human beings on the spot) and technological methods (intelligence gathered by various satellites, spy planes, telephone intercepts and the like). In recent decades, there has been a massive shift in reliance - and expenditure on technological methods of gathering intelligence, since this is cleaner and neater than sending "James Bond" spies into foreign countries. It also leads to large funding for IT industry. However it also leads to the embarrassment in March 2003 of the Secretary of State, Colin Powell, giving explanations of aerial photographs which in retrospect had nothing to do with the reality on the ground. The relative balance of human vs technological methods is sure to be one of the issues that will arise in the inquiry.
The dilemma for President Bush had been: what story to tell about the evident failure of intelligence? Up to this last weekend, the President had said that he had the fullest confidence in the intelligence services. That story however led to an obvious and unpleasant corollary: if the performance of the intelligence services was impeccable, then it must have been some political problem in the misuse of intelligence - a corollary that the Democrats were happy to point out. An inquiry to find out what really happened has huge political risks for the President in an election year and many had been expecting him to stick to his story, no matter how implausible it became. However a publicity offensive by Ms. Condoleezza Rice, the US national security adviser, didn't stop the noise and so the White House has reluctantly succumbed to the pressure for an inquiry.
The decision in Washington to launch an inquiry comes at the very moment when a judicial inquiry into related issues was being rejected in London. In a stunning development, Lord Hutton's report had concluded that the government was completely innocent of having "sexed up" a report to make the case for war, while the BBC was guilty of reporting that conclusion (which, based on the televised evidence, was obviously true.) Although Tony Blair was emphatically acquitted of any wrongdoing by Lord Hutton, the barrage of headlines and opinion polls suggested that the country at large is far from impressed.
The Guardian commented that the story of the Hutton report was not plausible, "A good cover-up requires at least a veneer of plausibility. In failing to provide one, Hutton has not only tarnished his own reputation, he has provoked a backlash far stronger than the one that would have greeted a more qualified government victory."
It turns out that Lord Hutton adopted a very narrow "legalistic" set of definitions in order to absolve the government. The Guardian explains: "The chain of reasoning that produced this skewed outcome requires some explanation. It arose because Hutton, in assessing the charge that the government "sexed-up" the September dossier, relied on a definition of the term so extreme that he couldn't fail to acquit the government of it - namely, that it inserted information it knew to be false. I have never met anyone who actually believed that to be true. The BBC reporter who made "sexing up" claim, Andrew Gilligan, didn't believe it even as the accusation stumbled from his lips at 6.07am on May 29. That's why it was omitted from later reports. To set that as the sole test of the government's integrity was quite illogical, not least since it formed no part of Downing Street's original complaint.
"Hutton considered and dismissed one other definition of the phrase "sexed-up": that the wording of the dossier had been changed to make it as strong as the available intelligence would permit. That would have been entirely legitimate and, as Hutton pointed out, was not in any case what Gilligan had alleged. However, there was a third possible interpretation that Hutton chose not to consider: that the dossier contained real intelligence, but was presented in such a way as to be deceitful and misleading. A half-truth may not be the same as a lie, but it is dishonest nevertheless. That is why witnesses in court cases are under obligation to tell the "whole truth" and not just the truth."
The UK has a history of judicial inquiries that absolve the government and fail to provide a plausible story in response to the question that they were originally set up to answer. For example:
• In 1963, Lord Denning conducted the judicial inquiry into the love-life of Jack Profumo, Secretary of State for War in the then Conservative Government. Profumo was sharing the affections of Christine Keeler, a call girl, with Eugene Ivanov - a naval attaché at the Soviet Embassy. The press had the first great sex scandal of the modern age and used the claim that national security was endangered to justify printing the juicy details. Denning's inquiry combined deference and vindictiveness in equal measures. The deference was shown to the Government of the day. The vindictiveness was reserved for Stephen Ward, Keeler's friend and part-time pimp, who was painted as a lascivious monster. Conveniently, he had committed suicide and was in no position to answer back.
• In 1972, Lord Widgery's inquiry into the shooting dead of 14 unarmed demonstrators in Northern Ireland in 1972 exonerated the Army. Not one soldier was disciplined, let alone prosecuted. By one of those coincidences which make you wonder, counsel for the Ministry of Defence was Brian [later Lord] Hutton. Widgery's whitewash convinced Catholic opinion that the phrase 'British justice' was an oxymoron. It so inflamed nationalists that a condition of the Good Friday Agreement was that a new investigation must be set up if the peace process was to go ahead. Lord Saville has spent £200 million to date investigating what should have been investigated 30 years ago. Perhaps it is only now that Bloody Sunday has been safely consigned to history that the judiciary can face the truth about what happened. By this reckoning we'll have a complete account of the run-up to the Iraq war sometime in the 2030s.
• In 1983, Lord Franks's inquiry into the Falklands War of 1982 exposed the blunders of the Thatcher Government, which all but invited the Argentines to invade, with admirable clarity. But concluded that no one in the Thatcher Government was to blame.
Nick Cohen comments in the Observer: "It's the double-standards in his report which has put Hutton on the receiving end of a lethal feeling in Britain: the feeling that what he has done simply isn't fair. Before the war, two institutions were trusted: the BBC and the judiciary. In his effort to destroy trust in the BBC, Lord Hutton has brought a belated but deserved disgrace to juidicial inquiries."
Back in the US, there is a more robust tradition of inquiries that not only ferret out the truth, but may sometimes go too far in their enthusiasm for reform. Douglas Jehl notes in the New York Times: "Within the Central Intelligence Agency in particular, the words intelligence review still conjure bitter memories from the 1970's and the Congressional inquiry by the committee headed by Senator Frank Church, whose effort to unearth abuses and impose reforms is remembered by many as an inquisition. The kinds of solutions recommended for spy agencies by Congressional panels and blue-ribbon commissions have been derided, then and since, by many intelligence professionals as naïve or unworkable."
As a result, intelligence officials have long been wary of outsiders' second-guessing. But they have reluctantly begun to acknowledge that a major overhaul could be in order after what may be two of the greatest intelligence setbacks in decades: the failure to anticipate the September 11 attacks and the misjudgment of Iraq's weapons stockpiles. They hope the independent commission President Bush will appoint can offer them more help and less finger pointing.
Whatever the story turns out to be, and whatever its political implications, it will have significant financial implications for the intelligence industry and the businesses that depend on it.
Read the New York Times story
Read the Guardian story
Read the Observer story
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
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Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
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The website for business and
organizational storytelling Organizational and business storytelling: story #46
The Super Bowl of advertising
________________________________________
Organizational and Business Storytelling In The News: Story #46
February 1, 2004
The Super Bowl of advertising: very expensive stories
We all know that The Big Game is on Sunday, but for many, the raison d'etre isn't the football, but rather for the Super Bowl of advertising, when sponsors will shell out $2.3 million for a chance to tell their story in 30 seconds before an audience of around 140 million people. In all sponsors will pay around $20 million to create the ads and another $138 million for the right to air them. Amid several hours of football, it's 30 minutes of the highest-paid storytelling around.
Who watches? Over the past few years, New York's DiMassimo Brand Advertising has asked viewers: Which are you looking forward to more -- the Super Bowl game or the ads? The responses have typically been split 50-50. The ads have become at least as important as the football.
While viewers used to get drinks and food during the commercials, now they're just as likely to do it while Stephen Davis, the Carolina Panther running back, is banging up the middle for a couple of meaningless yards. Davis's run will most likely be forgettable, and even if by some chance, it is memorable, it will be replayed over and over again. So taking a break during the football is a low-risk activity. But if they should happen to miss the ad that everyone is talking about on Monday morning, there is no instant replay and they will know that they blew it: they should have stayed watching the TV..
This year’s ads
Just as in 1984, when Apple Computer and the Chiat/Day agency kicked off the tradition of spectacular, splashy spots made especially for the game, almost all of the commercials to be shown by CBS will be new to viewers.
Just as there is a fight between two football teams, so the sponsors are involved in their own battles. Not only will there be a battle between two erectile-dysfunction drugs, Cialis and Levitra, the Super Bowl will also bring a credit card competition, between MasterCard and Visa; a film fight among the Disney, Sony, Universal and Warner Brothers movie studios; and an automotive altercation among brands like Cadillac, Chevrolet, Dodge and Mitsubishi.
The tone of recent years - the dourness of the dot.com bust, the post-9/11 patriotism and the pre-Iraq- war jitters of last year - will be lightened. Last year, viewers saw a federal antidrug commercial linking drug use and terrorism. On Sunday, they will watch the false teeth fly as an elderly couple wrestle over a bag of Lay's potato chips. The perkier Super Bowl mostly reflects opinion polls showing an upturn in the national mood as well as data indicating what may finally be the arrival of the long-awaited economic recovery.
Mastercard
One of the most eagerly awaited ads is MasterCard, featuring Homer Simpson. After paying for a costly series of goods and services Homer sits down unhappily, and the voiceover announces: “Getting your errands done quicker to spend more time with your family priceless.”.Ignored, the voice over starts again, to be interrupted by Homer, who grumbles: “Yeah, yeah. I heard you the first time. Stupid voiceover.” Self-mockery has worked well for Budweiser beer: time will tell whether it works for a credit card.
Pepsi
Pepsi has also booked a string of Super Bowl adverts. One shows a boy playing Jimi Hendrix songs. His choice of Pepsi over Coke leads him on the right path to becoming a rock star.
Pizza Hut
MTV star Jessica Simpson will appear with the Muppets to advertise Pizza Hut. When Kermit fall in love with Simpson, Miss Piggy goes mad.
Budweiser
The biggest spender on the day will once again be Budweiser brewer Anheuser-Busch, which has nine commercials for Budweiser and Budweiser Light. The company had its advertising firm make up to 100 ads, and executives selected the best nine. Commercial buffs need look no further than Barry Burdiak and John Hayes, vice presidents and creative directors of DDB Chicago, a unit of DDB Worldwide Communications Group. The pair of creative minds, who worked on the immensely popular "Whassup!" and "True" campaigns for Budweiser, keep many Super Bowl viewers coming back each year.
Their commercials tend to stay in the audience's mind long after the results of the Super Bowl are known, said Abe Novick, senior vice president at Eisner Communications, a Baltimore-based communications firm. "DDB aims to create ideas that transcend advertising to become part of the popular culture," said Burdiak, who started at DDB in 1988 and joined the beer account in 1990.
With the creative license given to them by Anheuser-Busch, Burdiak and Hayes have created advertising with "TalkValue," a term trademarked by DDB Chicago. "We want our advertising discussed by the water cooler," said Hayes, who joined DDB Chicago in 1995 on the beer account. "We achieve that through comedy and staying consistent." The most important number to Hayes and Burdiak in Monday's papers is the USA Today AdMeter ranking assigned to the best Super Bowl commercials.
Anheuser-Busch hopes to capture the first-place ranking for the sixth consecutive year, in large part due to DDB's work on previous Super Bowl Sundays. Such work helped DDB win Global Agency Network of the Year by Advertising Age magazine and Global Agency of the Year by Adweek.
"Most people are lucky if they do one television spot in their lifetimes people really laugh at and talk about," said John Immesoete, senior vice president and group creative director at DDB Chicago. "John and Barry do it a few times a year, year after year."
Erectile dysfunction
Icos, with Eli Lilly & Company, will run a new commercial to introduce Cialis, their prescription drug for erectile dysfunction.
"We like very much starting this way, in a venue associated with competition," Mr. Blum said of the Cialis spot, by Grey Worldwide in New York, part of the Grey Global Group. "If the three erectile-dysfunction medications are profiled side by side by side, we're confident patients will appreciate Cialis's advantages."
Another new drug in the category, Levitra, sold by Bayer and GlaxoSmithKline, will help make that comparison easier by running two new spots during the game, by the Quantum Group in Parsippany, N.J., part of WPP. (Viagra, the category leader, from Pfizer, is not scheduled to buy a commercial.)
A modern “pagan bonfire ritual”?
The ads may help answer the question of why. Why do so many people who wouldn't give a pro football game a second glance during the regular season tune in for the Super Bowl? A really good "Monday Night Football" game gets maybe 16 million viewers. A hot playoff contest attracts perhaps 30 million or 40 million. So how do you get from 40 million to 140 million for the Super Bowl?
The generally accepted explanation is that it's a reason to party in the dead of winter. If you like historical explanations, maybe the Super Bowl is like the pagan bonfire rituals held thousands of years ago in the dark, frigid months of the year to brighten spirits and chase away the blues.
And then again, there are those snazzy, slickly produced ads.
Rising costs of Super Bowl ads
For the sponsors the appeal of the Super Bowl ads is more mysterious.
The attraction of advertising in the Super Bowl comes from reaching a large group of attentive consumers. "When you're spending $2.3 million, you have to get more than just something to talk about in your boardroom or at a cocktail party," said Robert Passikoff, president of Brand Keys in New York, a brand and customer-loyalty research consultant. "The question is not the audience, because you know you're getting the audience, so it's a matter of what you're doing to build sales and positive brand imagery," Mr. Passikoff said. "It's a venue that works well for some advertisers and not for others."
Making it pay off isn't easy. Many agencies find it difficult to produce commercials that can stand out amidst the cacophonous frenzy of selling that totals an eye-numbing 30 minutes during a typical Super Bowl. That results in substandard also-ran ads, which finish embarrassingly low in the many postgame surveys and polls of favorite, memorable spots like the USA Today Ad Meter. Among those derided for their bottom-dwelling last year: spots for Subway, Yahoo HotJobs and Gallery Furniture.
Leonard Blum, vice president for sales and marketing at the Icos Corporation in Bothell, Wash., said, "The goal isn't merely to entertain or generate a commercial people say they like." "The goal is a commercial that will stick in people's minds, intrigue them, stand out by being uplifting, warm, emotional."
And cost keeps escalating. For Super Bowl I, in 1967, a 30-second spot cost about $42,000, or $239,167 in today's dollars, adjusted for inflation, according to Advertising Age. For Super Bowl XVIII in 1984, when Apple made ad history with a spot called "1984" that introduced the Macintosh PC, 30 seconds of ad time cost about $450,000 (or $833,584 in current dollars). This year, CBS will bring in an estimated $138 million for the game.
Mere popularity in no way ensures that an ad will drive sales of the product it hawks. The most entertaining ads are not necessarily the most effective. "If shilling things were that easy, Steven Spielberg would be making a lot of money on the side," DiMassimo said.
In fact, it's rare when Super Bowl ads are popular, memorable and effective.
For some sponsors, the advantage of a captive audience outweigh daunting concerns over the rising cost. But it’s an ongoing debate as to whether the Super Bowl ads are worth it. A recent online poll on AdAge.com (http://www.adage.com) showed that 61 percent of advertising executives don't think Super Bowl ads are worth the cost. Another trade publication survey showed that only 7 percent of consumers changed their buying behavior as a result of a Super Bowl ad, according to the site.
Still, the Super Bowl is about the only time television viewers look forward to the ads. In fact, a study by Initiative Media showed that the 99.5 percent of those watching the Super Bowl stick around to watch the commercials.
"It has a huge audience," said Jim Hanas, editor of AdCritic.com (http://www.adcritic.com). "It reaches a third of the country in a fragmented market where that just doesn't happen anymore."
What's the best way to make it worthwhile. "The best way is through storytelling and a minimum amount of copy that ultimately has embedded in it somewhere the reason to buy the advertiser's product," said Bob Garfield, critic for Advertising Age. An example is the Master Lock ad: "Riveting video. It's storytelling with no blather. It's a vivid demonstration of product benefit." Tomorrow, dozens of hopeful advertisers seek similar alchemy.
Gender stereotypes
"Budweiser and Bud Light seem to find one opportunity after the other to remind men of what makes them different from women," said Garfield "Beer ads are the Deborah Tannen of the air," he said, referring to the author if "You Just Don't Understand: Women and Men in Conversation."
Because of the environment in which a Super Bowl ad lives -- hyped expectations; the production noise of the game itself; distractions in living rooms across America, where people are chatting and chomping -- the most effective ads keep it simple, most executives and observers agree.
A different slant comes from Tom Prinsen, a professor of advertising at the University of South Dakota. He published an analysis of prime time television commercials which found that TV advertisements tend to perpetuate traditional stereotypes of women and men. Professor Tom Prinsen, who co-authored the study that appeared in the Journal "Sex Roles," said the advertisements that appear on the Super Bowl this year are unlikely to differ in that regard from the 1998 commercials he reviewed from the three major networks (ABC, CBS, and NBC).
"Look at last year's Super Bowl ads," Prinsen said. "You still have the older man being served by the younger woman." And in The Great Listener,' the male is not paying attention but gets accolades for being such a great listener. "Another of the Budweiser ads, ‘The In-laws,' shows what happens when women age and it's not having young men serve you. Your rear-end becomes huge and shocks your daughter's boyfriend." Prinsen said it will also be interesting to see how the erectile-dysfunction brands-all three of which bought airtime-portray males and females in their ads.
Prinsen's study of 1,337 prime time commercials found that they perpetuate traditional stereotypes of men and women. Although women make most purchases of goods and services, they are underrepresented as primary characters during most prime time commercials except for health and beauty products. Women are cast as younger, supportive counterparts to men, and older women are the most underrepresented group.
Old Classics
Old Classics: Master Lock: 1974
Master Lock Co., a unit of Fortune Brands Inc., was one of the first companies to recognize the potential of Super Bowl advertising. In 1974, the Milwaukee lock company spent two-thirds of its annual ad budget on a single spot, produced by Cramer-Kasselt in Chicago, for the Super Bowl. The series of Super Bowl ads, which ran during 21 games between 1974 and 1997, were straightforward, featuring a sharp shooter drilling a bullet through a Master Lock. The shooter then demonstrated that the lock stayed locked.
"That was one of the best spots ever run," says Mr. Trout of Trout & Partners, adding that the ad turned Master Lock into a household name. Because of its simplicity -- and the company's decision to place its bets on a high-profile advertisement -- Master Lock's ad is one of the most memorable commercials of all time. "People come up to me on airplanes when they see my Master Lock jacket and say, 'You guys are the ones who shot the bullet through the lock at the Super Bowl,' " says John Heppner, president of Master Lock.
Old Classics: Apple Computer's "1984"
Apple Computer offered up its vision of George Orwell's "1984" in a commercial directed by Ridley Scott, the Oscar-nominated director of "Gladiator" and "Alien." Lasting for a full minute -- an eon for an ad spot at the time -- the visually arresting ad for Macintosh computers depicted a brightly clad woman heaving a sledgehammer through a television screen that was projecting an Orwellian vision of Big Brother to groups of drab worker drones. The ad, which didn't include one shot of a Macintosh, told viewers, "No, it's not going to be like [Orwell's] '1984,' " says James Twitchell, author of "Twenty Ads That Shook the World" and University of Florida professor.
But the ad almost didn't make it to the Super Bowl. Executives from Apple, based in Cupertino, Calif., were set to can it after viewing the ad, Mr. Twitchell says, because it couldn't have "cared less about the product." Ultimately, post-game chatter about the ad itself put Apple, the Macintosh and ad agency Chiat\Day on the map. "It broke through the barriers of ad clutter and cultural fluff to say something that was new, radical and different," Mr. Twitchell says.
Old classics: Pepsi: 1987
PepsiCo Inc.'s ads have become a staple of the Super Bowl and set a high bar for using the event to launch new ad campaigns, industry watchers say. The beverage giant, based in Purchase, N.Y., earned its place as a Super Bowl powerhouse with its 1987 ad featuring one of television's favorite sons, Michael J. Fox. The star of "Family Ties" and feature films, including "Back to the Future," was cast in the ad as a young man whose beautiful new neighbor knocks at his door and asks for a Diet Pepsi. Out of stock, and seemingly out of luck, Mr. Fox braves a downpour, a rickety fire escape, and a pack of vicious dogs to fetch a can of Diet Pepsi from a vending machine down the street.
The commercial, produced by BBDO in New York, exemplified what ad industry watchers say made Pepsi's Super Bowl ads a hit: It's a mix of creativity and quality. "People expect the Pepsi commercials to be engaging and to have a little more stuff to them than just a joke," says Cheryl Berman, chief creative officer at Leo Burnett in Chicago. "They're more substantial in terms of a story line."
Old Classics: McDonald’s: 1993
Celebrities have long been a mainstay of Super Bowl commercials, in the hope that viewers will come to connect those well-known faces to the brands. One ad that got it right was McDonald's Corp.'s "Showdown" ad, produced by Leo Burnett for the 1993 Super Bowl. Basketball legends Michael Jordan and Larry Bird went head-to-head in a lighthearted game of one-upmanship, bouncing a ball off roads, buildings and billboards before whoosh ... "nothing but net."
"This was two guys at the top of their game, and the sense of competition between them caught the fun of it," Mr. Della Femina says.
Ad industry watchers also say "Showdown" worked because it wasn't trying too hard to sell McDonald's, of Oak Brook, Ill. "The brand registration didn't happen until the very end, and that's why the commercial had the ingredients of success," says Phil Dusenberry, chairman of BBDO North America.
Old Classics: Nissan 1996
Rob Siltanen had an experience similar to Apple's. In 1996, Siltanen was the hottest whiz kid in the industry. Working for TBWA/Chiat Day, he created a commercial for Nissan that featured a G.I. Joe doll look-alike speeding around a house in a toy Nissan 300 ZX. The manly Joe zoomed up to a dollhouse and picked up a Barbie look-alike, leaving the pretty-boy Ken doll dumfounded. The ad won nearly every industry award and was named the top commercial of the year by many publications.
A classic in 2004?
Will one of the ads in the 2004 Super Bowl be a classic? Only time will tell. The sponsors hopes are high. But the track record indicates that scoring a hit is rare. Whatever the outcome, the immense amount of time and energy - and expense - invested in making and airing the ads will ensure that these 30 minutes of high-tech storytelling are the most expensive in the world.
Read more on Super Bowl ads:
Wall Street Journal
New York Times
Courier-Journal (Louisville)
Daily Herald (Chicago)
Community
The Scotsman
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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organizational storytelling Organizational and business storytelling: story #5
Do we think in images or stories?
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Organizational and Business Storytelling In The News: Story #8
December 14, 2003: The Story of Junk Food
Misleading stories are the staple diet of advertising and account for the low regard in which that medium is held. See for instance the following examples cited by Chris Ballard in the New York Times on December 14, 2003 and Carol Hymowitz on December 16, 2003:
This year, KFC executives learned to be careful how far to push the envelope. Perhaps it was wishful thinking when they approved TV ads that proclaimed the chain's fried chicken is a healthy, low-fat food. In one ad, started in late October, a young man does a double-take after noticing a slimmed-down friend.
"Is that you? Man, you look fantastic. What the heck you been doing?"
Through a mouthful of fried chicken, the friend answers: "Eating chicken."
An announcer chimes in about the 11 grams of carbohydrates and 40 grams of protein in one KFC Original Recipe chicken breast. "So if you're watching carbs and going high-protein, go KFC," he says.
The Center for Science in the Public Interest, a health-advocacy group, wasn't convinced. "These ads take the truth, dip it in batter and deep fry it," said executive director Michael Jacobsen. Also skeptical was the Federal Trade Commission, which last month sent a civil subpoena to KFC, asking it to explain and justify the nutritional claims in its ads. Shortly after, KFC announced it was moving to new ads, but declined to explain the switch further.
• Pizza Hut introduced the Fit n' Delicious Pizza, and Burger King brought out a line of lower-fat ''fire-grilled chicken baguettes.'' For the carbohydrate-phobic, Hardee's began test-marketing a one-third-pound burger wrapped in lettuce rather than a bun.
• Even beer was touted for its relative health benefits. Michelob Ultra used the slogan ''Lose the Carbs. Not the Taste'' in television ads and plastered billboards with an image of an athletic-looking woman in a sports bra doing stomach crunches -- implying if not cause and effect, then at least an association between one kind of six-pack and another.
Ballard notes:
“The campaign was apparently effective: Ultra's share of the beer market in the United States is said to have more than doubled, to 2.5 percent from 1 percent, in about a year.)
• Not to be outdone, Miller Lite ran ads extolling its own low carb count, and Amstel Light introduced a Web site this fall called twopretzels.com -- two pretzels representing the difference in carbohydrates between Astel Light and competitors like Michelob Ultra.
Ballard comments:
Not mentioned amid the hucksterism was the fact that all major light beers have a similar number of calories, a key ingredient in any weight gain. Indeed, the goal of all these ad campaigns seemed to be a sort of sinister placebo effect: as long as you believe that beer, burgers and fried chicken are good for you, who cares if they're not?
Telling false stories is not a good idea in business: any short-term gains that may be made are quickly erased once the truth emerges.
Source: New York Times and Wall Street Journal (Carol Hymowitz on December 16, 2003)
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
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Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
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organizational storytelling Organizational and business storytelling: story #9
Conveying the Complexity of
Wall Street
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Organizational and Business Storytelling In The News: Story #10
December 16, 2003: New Story Justifies War Ex Post?
A story in the present may change our perception of what was done in the past. We can see this phenomenon at work in the discussion of the retrospective impact on the perceived justification of the ongoing war in Iraq of the pending trial of Saddam Hussein.
Supporters of the war are seeing it as an opportunity to justify the war in people’s minds. Charlie Savage in the Boston Globe reports:
The coming trial of Saddam Hussein will blanket world media with the daily evocation of decades of atrocities, potentially recasting the Iraq war from a campaign rationalized by the still-unproven threat of weapons of mass destruction to a moral undertaking justified by ending his regime's massive human rights abuses.
• John Hulsman of the conservative Heritage Foundation says: Without ever appearing to be partisan, but merely by cataloging Saddam's numerous heinous crimes . . . it will become implicit in a lot of people's minds that this was a terrible person and that toppling and catching him was undoubtedly a moral and practical good. That undermines the moralism at the base of left-wing opposition to the president's Iraq policy. It hits them where they live."
• Larry Sabato, a University of Virginia professor of politics, predicted that supporters of the US occupation of Iraq would schedule the trial with politics in mind.
• Others such as Leslie Cagan, national coordinator of the antiwar protest coalition United for Peace and Justice argue that the trial will not play smoothly for supporters of US policy.
• Depending on how far back the charges go and how much opportunity Hussein is given to defend himself, he could try to implicate the United States in his crimes… But if it also comes out about the role of the US in setting up that regime, then I think there will be even greater questioning about why this war happened and why this occupation is going on and what the real interests of the US are at this point.
• Ruth Wedgwood, a Johns Hopkins University professor of international law, suggests that the trial will have a positive effect on Arab perceptions of the war. The truth-commissionlike nature of the investigation into Hussein's violence will destroy the idea that this man could purport to represent Iraqi sovereignty in the Middle East, where the "Arab street" remains bitterly opposed to the US invasion. This will certainly validate the view of the war as necessary to displace someone who is really a first-class human rights violator. I also think that will have a good effect on the region because even if Saddam Hussein was numero uno in brutality, watching another head of state go on trial for human rights violations could have a salutory effect on Syria, the Saudis, and the Iranians.
• Tony Kireopoulos, associate general secretary for international affairs and peace for the National Council of Churches suggests that the trial will have a mixed impact: It may give an immediate public relations advantage for the prowar faction. But he said the problems created by the war will not vanish despite the competing story line. The human rights justification was really a third and distant reason for entering into this war, after purported weapons of mass destruction and links to the Al Qaeda terror network, "and it still begs the questions of how long our troops will be there.
• Michael Ignatieff, director of the Carr Center for Human Rights Policy at Harvard University's Kennedy School of Government suggests that the change is already happening: While it's important to remember that human rights was not the government's chief motive, others who supported the war from the beginning on human-rights grounds -- including himself -- have started feeling "vindicated" since the announcement that the former dictator will face trial. His human rights violations were a scandal, but no one was actually prepared to support military force to topple him. There's some funny shift in the ground here. Liberal opponents of the war always understood that there was a human rights ground for getting rid of him, but said, you know, `We can't trust Bush' or `We don't like violence,' or whatever their reason was. I think everybody has just remembered that he's an extremely bad guy and it's good to get rid of him.
Meanwhile, following the capture of Saddam Hussein, there was immediate uptick in the approval rating of President Bush in the US.
Democratic pollster Peter Hart, who conducted the Journal/NBC survey with his Republican counterpart Robert Teeter, said that Americans regard Mr. Hussein's capture as "day one of the next campaign" to repair Iraq, and new adversity there could put the president "back to square one." But, he said, the weekend development "is the right piece of news ... and that pays political dividends."
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #11
Daimler Learns Expensive Lesson
________________________________________
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
________________________________________
Organizational and Business Storytelling In The News: Story #11
December 17, 2003: Schrempp Learns Expensive Lesson
If you want to know the financial impact of storytelling, ask Jurgen Schrempp, the CEO of Daimler-Chrysler. He led the charge when Daimler undertook what he called “a merger of equals” with Chrysler, but later said in an interview with the Financial Times that in fact it was a takeover that was presented as a merger to make it more palatable. That simple story has already cost Daimler-Chrysler in legal fees, and may end up costing them a lot more in damages.
The suit was prompted by a 2000 interview in The Financial Times of London, in which Mr. Schrempp said he had intended all along to relegate Chrysler to a division of the parent company and had used the term "merger of equals" only for "psychological" reasons.
Mr. Schrempp described himself as a chess player, keeping his next moves secret. "If I had gone out and said, 'Look, eventually Chrysler will be a division of the DaimlerChrysler Group,' everybody would have said, 'No way will we do a deal like that,' " he told the newspaper.
The article set off a storm of publicity and so upset the Chrysler Group's American employees that Mr. Schrempp eventually visited them and said his comments had been misunderstood.
That tiny anecdote has led to a $2 billion lawsuit by shareholder Kirk Kerkorian. In the suit, Mr. Kerkorian has accused DaimlerChrysler Chairman Juergen Schrempp of fraud, arguing that he disguised a takeover of Chrysler by Daimler-Benz as a "merger of equals," thus depriving Chrysler shareholders of a takeover premium on their shares. Mr. Kerkorian is seeking as much as $2 billion in damages.
One of the top stories in the Wall Street Journal on December 17, 2003 was that the trial was halted when written evidence unexpectedly emerged from a key executive’s notes that seemed to confirm Kerkorian’s case.
U.S. District Judge Joseph Farnan unexpectedly halted proceedings in billionaire Kirk Kerkorian's civil lawsuit against DaimlerChrysler AG to give the court time to investigate handwritten notes unearthed by the auto maker's lawyers Tuesday.
A day before the trial was set to end in Wilmington, Del., Judge Farnan sealed the 61 pages of notes and turned the matter over to the special master who oversaw the trial's discovery process. Both sides say a hearing before the special master could come Monday.
Most of the notes come from the files of Gary Valade, the chief financial officer of the former Chrysler Corp. In court, Judge Farnan said he considered the notes to be relevant, and said they were "in some instances very substantial testimony" in the case.
Also in court, Terry Christensen, who is leading Mr. Kerkorian's legal fight, said the notes started during meetings in February 1998 and cover merger negotiations between Daimler-Benz and Chrysler executives.
But Christensen told the judge, "This is a colossal issue, colossal issue." He said the notes lent support to his case.
In 2000, Tracinda sued DaimlerChrysler, contending that the company deceived Chrysler shareholders into believing that the 1998 combination of Daimler-Benz and Chrysler was a merger of equals rather than the acquisition that Tracinda says it was. Mr. Kerkorian says he should have received a 62 percent loss-of-control premium for his 89 million shares in Chrysler, a 14 percent stake. He is seeking at least $1 billion in damages.
Mr. Christensen used the new evidence to bolster the case. On one sheet, he pointed to a series of notations listed in bullet form, including: "loss of independence."; "American image and character."; "Senior management sold out."
In court, Mr. Christensen said the last-minute revelation should cost the company the trial, and hinted that he might seek a default judgment against the company. As an alternative, Mr. Christensen asked Judge Farnan to keep Mr. Valade off the stand while allowing his side to use Mr. Valade's notes as evidence.
The evidence was unveiled on the eve of Mr. Valade's testimony. One of the only two remaining former Chrysler executives on the DaimlerChrysler management board, Mr. Valade was a director of Chrysler, as well as its finance chief, while terms of the deal were being hammered out. Mr. Schrempp has called Mr. Valade a key negotiator. Mr. Christensen described him as the "the point man."
The law firm representing DaimlerChrysler, Skadden, Arps, Slate Meagher & Flom LLP, said the new evidence came to light on Mr. Valade's plane ride to the trial from Michigan. So far, the firm's lawyers have taken full responsibility, blaming the "Skadden production machine" for the problem. A DaimlerChrysler official said the law firm is investigating what happened.
Whatever happens in the case, Daimler-Chrysler will have spent a fortune on legal fees defending the case, which all turns on which storytelling the court believes – the story that Jurgen Schrempp told when he was launching the merger, or the story that he told the Financial Times. Either way, it’s a very expensive lesson in storytelling for Jurgen Schrempp and Daimler-Chrysler.
From the start, though, there were signs that the combination was not exactly on an equal footing. Not only was the new company incorporated in Germany, but Daimler-Benz shareholders held 58 percent of its stock, and Chrysler shareholders were paid a premium of 28 percent above the former share value. Mr. Kerkorian's lawyers say a much higher premium would have been merited in the case of an outright acquisition. He is seeking at least $1 billion in damages. In August, DaimlerChrysler agreed to settle a class-action suit for $300 million that was filed by other disgruntled investors over similar claims about the representation of the merger.
Of the Financial Times interview, he repeated that his comments had been misunderstood. When he said division, Mr. Schrempp explained, he meant only Chrysler's auto operations, not its top management structure. In other words, Chrysler would be a division the way Mercedes would be a division.
"Chrysler was not divided in a corporate part and operating part," he said. "So only as a result of the negotiation for the merger of equals did we take the corporate part of Chrysler, meaning directors, executive committee, staff functions, and merge them with the corporate part of Daimler-Benz."
DaimlerChrysler's lawyers have suggested that Mr. Kerkorian's claim borders on the absurd. They said that the terms of the deal had been spelled out clearly in writing in an agreement disclosed to shareholders and that Mr. Kerkorian had an insider's view of the transaction through his representative on Chrysler's board.
Like Mr. Kerkorian, several former Chrysler executives testified that they, too, were either hurt or puzzled by Mr. Schrempp's interview. One was Mr. Eaton, the former Chrysler chairman who had split the chairmanship of DaimlerChrysler's management board for two years with Mr. Schrempp.
Yet the Chrysler executives, Mr. Eaton included, also said that they stood by the deal. "I believe it was a merger of equals," Thomas T. Stallkamp, the former president of the Chrysler Group, said at the trial. He was forced out of Chrysler the year after the merger.
But was it a merger of equals? At the trial, Mr. Schrempp called that description "absolutely correct."
"And by telling the truth," he added, "I don't think I can defraud anyone."
Further, he argued, the terms of the contract laid out a division of management for a set period of a few years, and that condition was met; beyond that, he said, no company can permanently cede the right to make management changes.
Mr. Schrempp said he saw the deal as a chance to survive in an industry that had shrunk from 50 to 60 automakers in the 1960's to 16 or 17 in 1998 and now to 10 or less, depending on how interlocking companies are counted. "We were continually studying what will happen in the international automotive industry, who are the companies that will survive this consolidation process," he said. "What do you have to do to be part of those companies to survive?"
The crucial factors were being large enough to have competitive economies of scale, to compete in the world's major markets - Europe, the United States and Asia - and to maintain a high level of technology, be it engineering or gadgetry. The third factor was costly, but especially important to maintaining a luxury brand like Mercedes.
"We were very good, obviously, in technology," said Mr. Schrempp. "We had and still have in this field very good margins, good cars. Luxury cars I am talking about. But we had the volume of 800,000, 900,000 cars.'' By contrast, General Motors, the world's largest automaker, sold more than 8.6 million cars and trucks last year.
As for competitors, Mr. Schrempp said: "We were on the forefront of technology, which means we had the highest cost to finance that technology. And we were actually concerned whether we can sustain that, because others have seen our success, others were coming. Honda, Toyota, BMW were in there already. Audi was coming. So we couldn't sit there and say let's enjoy these high margins on a low-volume basis. We could not sustain that."
Whatever the outcome of the trial, the cost to Daimler-Chrysler of the single story told by Schrempp to the Financial Times will be massive.
For more examples of Storytelling in The News, go to the Archive
Organizational and Business Storytelling In The News: Story #13
December 19, 2003: Boeing: Story May Cost $170 million
The story this morning that Boeing illicitly acquired a competitor’s documents may cost the company $170 million in civil claims. In theory, the government might be able to press claims of $510 million if the government seeks treble damages, as allpwed under federal false-claims laws.
Federal attorneys in Los Angeles plan to seek civil damages from Boeing Co. to cover the cost of switching satellite launch providers in the wake of the company's illicit acquisition of a cache of a competitor's documents, according to people familiar with the government's strategy.
Meanwhile, the U.S. Attorney's office here is ratcheting up a criminal investigation of the Chicago aerospace giant for alleged theft of trade secrets. People familiar with the investigation say federal officials have added additional investigators in recent weeks and increased efforts to speak with current and former employees.
Source: Wall Street Journal
For more examples of Storytelling in The News, go to the Archive
Learn more about
Squirrel Inc: A Fable of Leadership Through Storytelling,
a new book by Steve Denning (Jossey-Bass, June 2004)
Storytelling in Organizations
a new book by Steve Denning with John Seely Brown, Larry Prusak & Katalina Groh
(Elsevier, June 2004)
The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations
The acclaimed book by Steve Denning (Butterworth Heinemann, 2000)
Sign up here to get Steve Denning's newsletter about organizational storytelling
Email:
Go to other relevant links
Steve Denning consults and gives workshops and keynote presentations on topics that include: leadership, innovation, organizational storytelling, business storytelling, springboard storytelling, knowledge management, branding, marketing, values, communication, communities of practice, business performance, collective intelligence, tacit knowledge, business collaboration, knowledge, learning, community, performance improvement, visionary leadership, social potential, institutional community building, and internal communications. You can contact Steve at steve@stevedenning.com
I want to add this website to my favorites!
Copyright © 2000-2004 Stephen Denning Webmaster CR WEB CONSULTING
home | learn organizational storytelling | understand knowledge management | contact me | get my bio
arrange a tailor made workshop | get my newsletter | read my blog | go to CreatingThe21stCentury.org
Read my books: The Leader's Guide to Storytelling | Squirrel Inc | The Springboard | All my books
Steve Denning
The website for business and
organizational storytelling Organizational and business storytelling: story #14
Tyco discovers power of narrative
________________________________________
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Organizational and Business Storytelling In The News: Story #14
December 20, 2003: Tyco: Rules vs Narratives
The huge conglomerate, Tyco, recently learned that the way to transmit values is guess what? By narrative.What the religious leaders discovered thousands of years ago, business leaders are now rediscovering.
In 2003, a heroic effort was under way to resuscitate Tyco, a company that had been tainted by scandal. Systematic illegality and fraud beginning at the very top of the organization had created a climate of uncertainty and a reputation that was unenviable. Yet Tyco did not implode like Enron. Beneath the cloud of scandal, Tyco had solid profitable manufacturing businesses providing a broad range of products, including duct tape, sprinkler systems, industrial values and security systems. It was a $35 billion company with 260,000 employees. Part of the effort involved the obvious structural measures – separating finance from operations, appointing a credible board of directors with real powers, and conducting exhaustive audits.
But the more difficult challenge involved changing the hearts and minds of the people who worked there. How could one instill a new set of values? How could the new team establish honesty and integrity when this had been singularly lacking in the very recent past?
The first step of Eric Pillmore, senior vice president for corporate governance at Tyco was the development of a Guide to Ethical Conduct. It’s a publication translated into 14 languages setting forth the new rules in such areas as harassment, conflicts of interest, compliance with laws and fraud. The first version laid out the rules and was impeccable in content. But it was tedious and he could see that it would merely gather dust on people’s shelves. It wouldn’t lead to lively discussions or cause people to come to a deeper understanding of the issues involved. So Pillmore threw out that first version of the guide and started again in an effort to bring the principles alive.
How did he do that? Through stories! The eventual Guide was rolled out in May-June 2003 and is available on the web. It doesn’t just state the rules: it offers employees miniature stories – vignettes – a on problematic situations, such as hiring a relative for the company, or failing to disclose a financial interest in a company that Tyco does business with. The stories lent themselves to dramatic treatment and videos were created to get people thinking about the nuanced and complex issues involved. Three were in an office setting and three were in a factory setting:
Unsafe Behavior Related to Health, Safety, and Environmental Looks Like …
• To save money at his plant, Sam provides half the number of safety goggles as there are employees on the line and instructs them to share.
• Piette, the plant operations manager, instructs her people to dump used machine oil on unused acreage at the back of the facility.
• Al, the plant manager, allows the contractor responsible for the removal of organic waste material to dump it in a local lake
Inappropriate Political Activity in the Workplace Looks Like …
• Nancy distributes fliers, sponsoring a political candidate running for local council, in the cafeteria at work.
• Tom, a team leader, uses company e-mail to solicit support for his cousin who is running for state representative.
• Timothy distributes ticket purchase forms for a customer’s favorite political fund-raiser.
Pillmore didn’t just distribute the guide: employees gathered in the 2000 Tyco locations not only to get their copy of the guide but to see the videos and begin an ongoing dialogue about the content.
When asked why he was focusing on the whole staff when the wrongdoing had been at the top, Pillmore replied that it was about empowerment. “If they had a bad apple now,” says Pillmore, “they are expected to address the issue before it becomes a problem. Before, it was very unclear what they could and should do. “We’re essneitally saying to managers and supervisors, ‘We’re handing you a tool kit you never had.’” Pillmore sees as “putting the disciplines in place to guard against future abuses, in whatever form they might take.”
For the original article, go to: Pillmore, Eric M. “How We’re Fixing Up Tyco”: Harvard Business Review, December 2003, page 96.
The booklet can be found at http://www.tyco.com/pdf/tyco_guide_to_ethical_conduct.pdf
Organizational and Business Storytelling In The News: Story #2
November 13, 2003: Can Story Be Commodified?
A current worry among storytelling practitioners is whether, with the emerging management interest in storytelling1/ storytelling will become "commodified". Now that Harvard Business Review, CIO Magazine, Booz Allen, and the Wall Street Journal, can the exploitation and commodification of story for profit be far behind? And in the process, won't this destroy all the natural wonder and mystery of this ancient art?
Is this a legitimiate worry? In principle, it sounds plausible, since pretty much everything else has been commodified - so why not story? Surely storytelling is at risk too?
Bottom line: obviously there is some kind of risk, but the size of the risk is an issue.
One of the nice things about story is that it only works if there is human feeling involved and it tends to backfire if the purported feeling is simulated or false. People may be fooled once or twice, but it's tough to go on fooling them with a story.
So corporate efforts to commodify story seem to me largely doomed to failure unless they represent authentic efforts to communicate the truth. In the US, individuals are currently bombarded with an average of 5000 ads a day, many of them attempts at "telling a story": the fact that few of the ads are authentic efforts to communicate the truth leads us to have an appropriately low opinion of those responsible for their creation and promulgation.
One could make the case that story emerges even from this depressing experience essentially unscathed: it helps us see the PR people for what they are.
The risk of gifts being turned into a commodities is much greater, because there is a physical thing that can be stored, exchanged, bought, sold.
A story is of course also a kind of a gift, but lacking any such physical properties, seems to me much less liable to be commodified.
For more examples of Storytelling In The News, go to the Archive
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