Monthly Archives: November 2008


The Snowball: Warren Buffett and the Business of LifeThe Snowball: Warren Buffett and the Business of Life by Alice Schroeder

Rating: 5 of 5 stars ( Goodreads review)

To succeed in business, be patient, look for value, be honest, and have cash in hand. And don’t think about anything else. In fact, be an unrepentent monomaniac. Warren Buffett has become the worlds richest man by making investments that he gets derided for at 10-year intervals, then, when the bubble bursts, he is a saint again…. Buffett is extremely good at making money – and has a rather impressive idea about what to do with it (keep investing, give it all away to someone who is good at giving away money, such as Bill Gates.)

The biography is an impressive work in itself. 838 densely written pages about a man whose personal life has been rather unspectacular (hamburgers and Cherry Coke, poring over stock lists and annual reports). Schroeder is a business writer and financial analyst, so she has real knowledge about deals and can write with authority on complicated cases such as Salomon Brothers. I would have loved to see her write a biography on Bill Gates with the same level of business detail, though we will probably have to wait another decade or so for that to happen.

(Incidentally, I once heard Buffett speak, at the Harvard Business School in, I think, 1991. He was asked about what he thought of the derivatives market, which was beginning to take off at that point, and said that if he was alone on a deserted island with 100 people and the only sustenance was rice, he wouldn’t have put 50 of them to work peddling rice futures….)

Recommended for the budding investor – and as a backgrounder on the financial crisis. It is up to date as of April 2008, which is rather impressive in itself.

View all my Goodreads reviews.

Ozzie and the cloud

Steven Levy, a tech writer whose every article I read if I can get my hands on it, has a fascinating Wired article about Ray Ozzie and his long march to make Microsoft survive and prosper in the cloud. Service-based computing can be a disruptive innovation for Microsoft, since customers become less reliant on a single, fat client (dominated by MS) and instead can use a  browser as their main interface.

I have used Lotus Notes since well before the company was bought by IBM, and always considered it to be a fantastic platform that is somewhat underused, chiefly because while its execution is great, the user interface is somewhat clumsy (getting better, but still) and it is hard to program for. As an infrastructure play for a large corporation, Notes is just great. As a platform for software innovation and innovative interaction, it leaves a lot to be desired. The question is – can Microsoft gain dominance in this market (Sharepoint seems to execute on that one), extend it to consumers (Vista is not a good omen here), and somehow find a business model that works? (By that I don’t mean one with it the same profitability as it has now, that just isn’t possible. But one that is somewhat profitable long-term?)

If anyone is going to be able to pull that off, it will be Ozzie. The article paints, as I see it, a very complete picture and tells me a lot more about the relationship between Microsoft and Ozzie than I knew. But that is usual with Steven Levy articles, ever since he wrote "Hackers: Heroes of the Computer Revolution" back in 1984.

Highly recommended. (And since I like long and detailed articles: this one is at 6900 words or more than 40,000 characters including spaces. Just a hint to my Norwegian newspaper friends, who thinks anything more than 7000 chars won’t be read by anyone.)

Myers-Briggs and me

Typealyzer is a service that classifies your blog (and, by extension, you) into the Myers-Briggs personality classification framework. Based on, I am an INTJ, which is fine by me, though I thought I was more over towards ENTJ:


OK. Not sure I have difficulty communicating, but that may just be that I mostly sit by myself pontificating to the wall or similar-minded people who find my communicating style compatible. Anyway, what I really liked was this brain chart:


In other words, little chance that I will survive in a world like the one described in Ben Elton’s Blind Faith….

(Hat tip to Vaughan and Kimberly for this one.)


Until 2003, I lived in a part of Norway that gets about 7 ft of snow every year, so after a brief period of sweaty and aching mornings I invested in a small snow-blower. Then I moved to a place about 20 ft above sea level, where snowfalls are few and far between. But my little snow blower has brought unexpected benefits.

The first winter here was bare and cold until late January, when I woke up one morning to about a foot of snow. It was before seven in the morning and the office beckoned, so I dressed warmly and got to it.

I was a little worried, though. My next-door neighbor, with whom I share the driveway, is unofficial Norwegian champion sleeper and likes to delay the vertical part of life as long as possible. I wondered how he would react to the noise from the snow-blower at a time he considered to be just after bedtime. But I had to get to work, so I pulled the cord and started.

Half an hour later I was done, garaged my little machine (which is more like a motorized broom than a real snow-blower, except in the noise-making department) and got inside for a brief thaw-out and the day’s first coffee.

Then the doorbell rang. I prepared for the worst and nervously opened the door. There stood my neighbor, in slippers and morning coat and with his hair in all directions.

He had woke up, seen the snow and resigned himself to having to get up and do something about it when he heard me start the engine. He didn’t know I had a snow blower, and explained with an ecstatic expression that little snow-blower with a missing muffler was "the most beautiful sound he had ever heard."

Whereupon he handed me a bottle of Cognac and returned to bed.

PS: We have since formalized the arrangement. I blow the driveway, and he buys one bottle of wine per snowfall, which we consume with a delightful dinner sometime in April.

The oil rule: Whoever has the oil makes the rules

Tom Friedman, in his new book Hot, Flat, and Crowded, makes a pretty powerful argument that the US’s addiction to oil helps finance fundamentalist Islam and represses democracy. The main point: Having oil means dictators can finance repressive institutions (police etc.) and bribe the populace into apathy.

Here is a graphical telling of the same story:

World oil reserves chart

Looks pretty persuasive to me. Tom Friedman argued for a "patriotic" gas tax in the US back in 2001. Seems as good an idea now as it was then. (Chart from Daily Galaxy, via Jon Udell)

Tom also says that no country with more than 50% of its income from oil is a democracy. I am not totally sure of the numbers here, but I wouldn’t call Norway undemocratic. Update, thanks to Twit from mgjosefsen: Norwegian exports of oil and natural gas was 52% of total Norwegian exports in 2005. Share of GNP was about 25 %. We seem to be an exception, in other words.


 Jazzcode is a concert/presentation held by Carl Størmer and a jazz band, typically put together for each venue. Carl, who has been traveling around the world with this presentation and has written a case about Miles Davis for the Harvard Business School, explains how jazz musicians are able to come together and play without having played together or even met before,  largely because they listen to each other, have shared references, and adhere to a pretty strict pattern in how they play through a piece. Carl, very effectively, uses the metaphor of a jazz band to illustrate certain principles and requirements for collaboration in teams.

Today I had the great fortune of attending a private JazzCode concert in Oslo, the band consisting of Carl (drums), Georg "Jojje" Wadenius (guitar), Rob Waring (vibraphone) and Edvard Askeland (base). Though I suspect this concert was heavier on the music and lighter on the management thinking – half the audience was volunteers of the Oslo Jazz Festival – I can easily see how this approach can be both an entertaining and instructing part of a company retreat or meeting.

I saw the show with my father-in-law, Ludvig Mathiesen, who in addition to everything else was Norwegian Champion of Amateur Jazz in 1956, playing the piano. For me it was an introduction to jazz – and that, I suppose, is the added benefit of having JazzCode at your event: A helping of culture with the managerial pointers.

Highly recommended.

Liveblogging from Sophia Antipolis

This are my running notes from visiting Accenture’s Technology Labs in Sophia Antipolis, as part of a Master of Management program called "Strategic Business Development and Innovation" for the Norwegian School of Management.

Accenture’s Technology Labs is a relatively small organization: 200 researchers, 180000 employees in Accenture. There are four tech labs: Silicon Valley, Chicago (the largest), Sophia Antipolis, Bangalore, they should be able to do everything, but in practice there is specialization. The four main activities of the tech labs are technology visioning, research, development of specific platforms, and innovation workshops (with clients, press, consultants etc.) The themes pursued are mobility and sensors; analytics and insight; human interaction & performance; Systems Integration (architecture, development methods); and infrastructure (virtualization, cloud computing).

Kelly Dempski: Power Shift: Accenture Technology vision

The visioning used to be far-thinking, visionary etc., now have a much more immediate focus, want to look at things that you can implement today, make it much more "grounded in reality"

Eight critical trends:

  • 1: Cloud computing and SaaS: Hardware cloud (, IBM, Google (now the third largest producer of servers in the world)), desktop cloud (Google, Zimbra, MS Office Live Workspace), SaaS cloud (Netsuite, CrownPeak,, and services cloud (Google Checkout, Amazon web services, eBay, Yahoo)
    • examples: Flextronics has changed over their HR applications to an SaaS model. AMD emulates chips on software for testing purposes, now contract with Sun to do that in the cloud. New York Times had 4Tb of articles that they wanted to translate to PDF: Translated it all twice (because there was a bug the first time), someone went on Amazon with their credit card, uploaded 4Tb, processed it (24h), there was a bug, had to do it again, 48h, total cost $250 on someone’s credit card.
    • issues:
      • data location (where is the data)
      • privacy and security
      • performance
  • 2: Systems – regular and lite
    • SOA as the integration paradigm (regular), mashups (lite)
    • traditional back-end apps vs. end-user apps
    • small number of apps maintained by CIOs vs. large number of User and user-group created applications (long tail)
    • examples:
      • REST is a light architectural approach for interoperability & data extraction
      • Mashups (JackMe (trading platform tools), Serena, Duet (SAP and Microsoft), IBM) becoming more important in the enterprise arena
      • Widgets and gadgets are light-weight desktop UIs that continually update some data
  • 3: Enterprise intelligence at scale
    • combination of internet-scale computing, petabytes of data, and new algorithms
    • almost all the large systems vendors have partnered with or acquired some analytics oriented software company (such as Microsoft acquiring FAST)
    • rampant use of data: evolution through access, reporting, external & internal, unstructured etc.
  • Trends 1-2-3 together: The new CIO
    • hardware and software procured from the cloud
    • business units, end-users create their own lightweight apps
    • The new CIO:
      • "Data Fort Commander" – ensure security, privacy, integrity of corporate data and manage back-end apps
      • "Chief Intelligence Officer" – provide data analysis services & insights to business units
  • 4: Continuous access
    • mobile device "first class" IT object
    • No concept of enterprise desktop/laptop
    • location-based services
  • 5: Social computing
    • amplify and support the value of the community
    • three major directions: Platformization, inter-operability, identity management
  • 6: User-generated content
    • community-based CRM (users making videos about how to run certain kinds of software or build something from IKEA)
    • new forms of entertainment
    • revenue erosion of traditional media companies
    • this has marketing implications: You can measure the sentiment out there in the user community. You switch from advertising to engaging.
  • 7: Industrialization of software development
    • converging trends will increase integration: Predictive metrics, model-driven development, domain-specific languages, service-oriented architecture, agile-development & Forever Beta.
  • 8: Green computing
    • global warming, energy prices, consumer pressure, compliance and valuation
    • switch out energy-intensive processes for information-intensive processes: Electronic collaboration; Warehousing, supply chain & logistics optimization; Smart factories, plants, buildings & homes; and new businesses such as carbon auditing and trading

Cyrille Bataller: Biometric Identity Management

Biometric identification is coming, driven by increasing demand and technological progress. Biometric identification is defined as "automated recognition of individuals based on their physiological and/or behavioral characteristics. Physiological can be face, iris, fingerprint; behavioral can be signature, voice, or walk. Involves a tradeoff, as with all security systems, between the level of security and the convenience of the system. Fingerprint is most used (38%), face is the most natural, iris the most accurate. Many others: Finger/hand vein, gait, ear shape, electricity, heat signature, hand geometry and so on…

Balance between FMR (false (positive identification) m rate) and FNMR, called equal error rate. Iris has an EER of .002%, 10 fingerprints .01%, fingerprint .4%, signature 3%, face recognition 6%, voice 8%. Many parameters in addition to this.

Securimetrix has something called HIIDE, a mobile unit that does a number of biometrics, used in Iran. Voice is very interesting because it can be done over the phone, interesting for call centers, banks etc. Multimodal important, because it is hard to spoof.

Airports is a good example of what you can do with proper identification: You can move 99.9% of the check-in away from the airport. Bag drop can also be almost fully automated. Portugal is the leader in the EU, have automated passport control with facial recognition (scan, use electronic passport etc.). Most people are not concerned very much with privacy given some assurance and convenience. Likely to see lost of automated border clearance for the masses, but also registered travelers that go through even quicker and are interoperable across many airports. One common misunderstanding is that automated identity checking is moving away from 100% accuracy, but human passport/security control is an error-ridden process and mostly automated processes are more accurate.

Antoine Caner: Next Generation Branch

This is a showcase exhibit of best practice banking technology and processes. This showroom has about 40 companies (banks, mostly) visits per year.

Most banks have a multi-channel strategy, have returned from a strategy of getting rid of branches but want to redefine it. Rather than doing low-value transactions, the branches are seen as a mesh network for business development.

Key principles behind the branch of the future:

  • generating and taking advantage of the traffic
  • flexibility throughout the day
  • adaptation to client’s value
  • sell & service oriented
  • modular space according
  • entertaining and attractive
  • focused on customer experience


  • turning the branch windows into an interactive display (realty, for instance)
  • Bluetooth-enabled push information
  • swipe card at entrance to let branch know you are there, let your account manager know, apply Amazon-like features
  • digital displays for marketing
  • avatar-based teller services
  • biometric-based ATMs to allow for more advanced transactions, as well as more opportunistic sales applications
  • do both identification and authentication
  • digital pen user interface for capturing data from forms
  • RFID-based or NFC (Near Field Communication) in brochures, swipe and get info on screen
  • "interactive wall" for interaction with clients in information seeking mode
  • visual tracking of movement in the branch
  • modular office that can change shape during the day, reconfigurable furniture

What impressed me was not the individual applications per se – though they were impressive – but way everything had been put together, with a back-office application that can be used by the branch manager to track how this whole customer interface  (i.e., the whole bank branch) works.

Alexandre Naressi: Emerging Web Technologies

Alexandre leads the rich Internet applications community of interest within Accenture. He started off giving some background on Web 2.0 and used Flickr as an example of a Web 2.0 application, where a company use user-generated content and tagging to get network effects on their side. Important here is not only the user interface but also having APIs that allow anyone to create applications and to have your content or services embedded into other platforms. Dimpls is another example. More than one billion people have Internet access, 50% of the world has broadband access, which allows for richer applications. Customers’ behavior is changing – it is now a "read-write" web. It has also gotten so much cheaper to launch something: Excite cost $3m, JotSpot $200k, Digg cost $200.

Rich Internet Application and Social Software represent low-hanging fruit in this scenario. RIA allows the functionality of a fat client in a browser interface, with very rich and capable components for programmmers to play around with.

Two families of technologies: Jacascript/Ajax (doesn’t require a plugin, advocated by Google), and three different plugin-based platforms: Silverlight (Microsoft), Flash/Flex from Adobe, and JavaFX from Sun. All of them have offline clients that can be downloaded as well. A good example is, which gives a better user interface – Accenture has developed something similar for their internal enterprisesearch.

Social Software: Accenture has its own internal version of Facebook. Youtube is also a possible corporate platform where people can contribute screencasts of all kinds of interesting demos and prototypes.

Kirsti Kierulf: Nordic Innovation Model for Accenture and Microsoft

Accenture and Microsoft collaborating (own a company, Avanade, together), and have set up an Innovation lab in Oslo called the Accenture Innovation Lab on Microsoft Enterprise Search. Three agendas: Network services, enterprise search (iAD), and service innovation. Running a number of innovation processes internally. This happens on a Nordic level, so collaboration is with academic institutions and companies all over.

Have made a number of tools to support innovation methodologies: InnovateIT, InnovoteIT, and InnomindIT (mind maps), as well as a method for making quick prototypes of systems and concepts for testing and experimentation: 6 weeks from idea to test.

Current innovation models are not working for long-term, risky projects. Closed models do not work – hence, looser, more informal and open innovation models with shorter innovation cycles. Pull people in, share costs throughout the network, Try to avoid the funnel which closes down projects with no clear business case and NIH. Try to park ideas rather than kill them.

Important: Ask for advice, stay in the question, maintain relationships, don’t spend time on legalities and financials.



As I said after reading his book in in 2005:

In an age of seemingly simpleminded politics and increasingly spin-oriented politicians, it is rather reassuring to know that at least one US senator has the experience of life in the less privileged lane; the perseverance and intellectual capability to analyze deeply entrenched issues and work at resolving them; and the willingness to keep the complex issues complex and […] the simple things simple.

Practicing what you preach (The business school edition)

I am a board member of (prior description here) a startup company that offers a recruitment service for universities, primarily those offering master programs in business or related fields. The company now has a number of universities and business schools signed up, and we have begun to  learn something about the market that we (or, at least, I) did not know before, even though I have worked for a large, private business school for many years.

The thing is, it seems (many) business schools do not practice what they preach – i.e., many of them fail to apply some rather basic strategies, sales practices and web practices. Here are a few observations I have made so far:

1. Business schools say they differentiate, but they don’t

The classic. Porteresque view of competitive strategy says that there are only three generic strategies you can apply: Cost leadership, differentiation (i.e., being unique in some way), or segmentation (i.e., addressing specific sub-markets based on attributes of the customer). The latter, of course, is merely a more granular and partially combined version of the two first ones. Even though business schools should know competitive strategy well (it is, after all, one of their most important subjects), most of them do not pursue any one of these strategies. Or, rather, they say that they pursue a differentiation strategy but don’t. In that sense, they are neither strategic nor different.

The test for whether you have a strategy that truly is strategic is that you have chosen not to do something that you could have done. The test for whether you are differentiated is whether you can take away the school name (and things the school cannot change easily, such as nationality and location) from its description and then see whether you can determine which school it is based on its marketing material.

The reason I say this is that I have played around with the course and school descriptions found in our database, and been struck by how similar they look. Do the test yourself – go into the Masterstudies database, look up a few schools, and ask yourself: Which student segments are this school deliberately not trying to get – and what part of its offering is sufficiently different that you can see to what extent they are doing this in practice or just in Powerpoint.

Most of them are looking for the future leaders who see the challenges of  globalization, new technology and a constantly changing marketplace as opportunity to employ innovative strategies to build flexible learning companies that create value for their customers, shareholders and employees while displaying a sense of diversity and social responsibility. Hmmmm…. I wonder how large that segment really is – and to what extent the school really can serve this mythological student once he or she shows up?

The net result, of course, is a power law distribution of interest, with about 10 schools, the Harvards and Stanfords and MITs and Kelloggs of the world, getting all the attention; a near-first tier that is deadly afraid of doing something that the best schools do not, lest they be criticized for it; and a medium body and eventually long tail of schools that really do some differentiation but dare not talk about what it really consists of – for instance, explicitly targeting those who did not make it into the first tier schools but still are good students.

2. Business schools talk about market analysis, but many don’t do it well, or at all

Recruiting a student of sufficient quality and interest is a complicated process: You have to create enough awareness so you get enough applications so you can send out enough qualified to get enough accepts. To do this, you have to track

a) the number of leads (expressions of interests) you get

b) how many who actually send in an application (conversion rate)

c) how many of these are qualified and will get an offer (acceptance rate)

d) how many who accept the offer when they get it (yield)

My thoughts were that every Dean of Admission in the world eagerly tracked these numbers (they are, after all, also pretty good for measuring the level of effort of the sales team) but no, there are some indications that a number of schools, in fact, do not even know them. Depending on where in the distribution of schools you are, you ought to track different numbers: If you are top-ten, you track yield rate; if you are new, you track earlier in the process. (Incidentally, what Masterstudies offer is a filtered version of the first one, where schools can set up criteria for what kind of leads they want, thereby filtering out the clearly unqualified and enable some geographical or gender balancing – the difference between carpet-bombing and surgical strikes, as it were).

These numbers are not hard to get, but fewer schools than I thought actively manage them. (Not that I have formal statistics or would share them if I had them.).

Schools differ widely in their attitude to prospective students as well. We tested the response rate of schools and found that it varied widely – some schools did not respond at all, whereas some schools were on the phone with our prospective students in less than 30 minutes. That makes a difference as to whether the students will send in an application or not. (And no, there was no quality difference between these schools in terms of rankings and so on – we could not detect any pattern at all.)

3. Business schools know little about why they don’t get the students they want

There is a classical study by Abraham Wald of the location of bullet holes in bomb planes to find out where to add armor. Wald looked at where the airplanes were shot up and then concluded (not in the referenced paper, though) that more armor should be in the places with no bullet holes. The reason was simple enough: The planes that returned were the survivors, with bullet holes in places that could take the damage.

I wonder if not some of the same bias comes through with business schools. I wonder how many of them systematically interview or otherwise try to elicit responses from those students that did not chose their offering – at any point in the process. There are some schools that are clever – for instance, one school makes sure that the lack of a GMAT is not a hindrance to start studying if your grades and other academic performance indicators are good, by allowing the student to start and having time and resources set aside for GMAT certification. But I wonder how many take the time to find out whether it is lack of awareness, interest, timing, geography, content, structure, reputation or finance that makes promising student choose a different school. For those that interview candidates, I assume some of this comes out in discussions, but I have my doubts as to how well defined and executed these processes are.

I also have a sneaking suspicion that many students choose a business school for more mundane reasons that they tell school officials. It sounds better to say you chose this particular program because you like its specific focus on subjects or teaching philosophy (differentiation again – see point 1 above) than because the school is conveniently situated or your friends go there.

4. Business Schools make their web sites viewable, but not findable

Findability refers to the degree to which your web site or specific page can be found  by a search engine. As search technology more and more becomes the preferred interface to information, having a findable web site becomes very important. But more and more schools are finding that when you Google their specific master programs, the description of the the program found at comes up higher than their own description.

This is because schools spend a lot of money creating nice-looking web sites, but not much on making them findable. I think this is because the school has an understanding of how to create nice exclusive-looking brochures, but don’t know much about search engine optimization. The visual design of a site is outsourced to an ad agency, and the maintenance of it done through some content management package that does not use descriptive directory and file names, instead hiding new and interesting programs behind cryptic URLs. Perhaps each business school thinks their brand equity is so strong that students will know about them and come in the front door (i.e., the home page) like they used to do 10 years ago?

I have always wondered why business school web sites are done in such an overadministered and cumbersome fashion – for instance, few business schools set up ways for faculty to have blogs, instead requiring them to have official-looking web pages that are pain to maintain and leaving blogging to those who either set up their own blog outside school premises or have the technical gumption and political power to install the software on school infrastructure themselves. There are simple and cheap solutions around – Drupal, for instance – that allow descriptive directories and simple, shared content management. And when it comes to content – why not just use Movable Type or WordPress and the underlying software for faculty and other writers? In that way, the content would be plugged into what is beginning to look like the Semantic Web almost by default.


Given that I am on the Board of a company that tries to help business schools recruit internationally, I personally think this is just swell: Lots of business extension possibilities for us. But there is low-hanging fruit here: Simple, effective strategies and practices that business schools ought to execute on, with or without our help.

As marketing and recruiting increasingly goes on line (and, after that, into communities such as LinkedIn and Facebook), business schools will have to understand and change their marketing to make themselves much more differentiated and findable. In the meantime, there is room for first (or, rather, fast second) movers.

May your school be one of them.

Demotivators Fall Catalogue

…has arrived. And they are keeping up with the times:


I guess I like the procrastination one as well, as evidenced….

Come to think of it, there is no demotivator for strategy, and I need one for a project I am working on with nGenera – and because it would be wonderful on the wall of the department of Strategy and Logistics here at NSM….