Monthly Archives: December 2008

One of the saving graces of this year…

…is that Anthony Daniels (more commonly known as Theodore Dalrymple) was born in 1949, is less than 60 years old, and thus capable of producing for many years yet. Read him when he discusses imprisoning criminal heroin addicts, when he goes against a former Lord Chief Justice, when he points out the dangerous absurdity of monitoring people’s racial status ("a fragile ego maketh a glad authority"), when he warns against borrowing for consumption more than a year before the financial crisis.

What language, what logic. To quote Horace Walpole via Dalrymple: The world is a comedy to those who think, and a tragedy to those who feel.

Oh, how I wish for a Norwegian pen like his.

Out of town news is out

image Another sign of the future of the traditional newspaper – Out of Town News is disappearing.

In the six years I lived in Boston and frequently walked by Out of Town News, I never bought anything there. Too expensive for a doctoral student’s budget. But I like the idea of a print-on-demand shop there, though I doubt it will be viable from a business standpoint.

Starbucks, methinks. It’s inevitable.

(Via Doc Searls.)

The efficient US auto industry

Fareed Zakaria makes it clear: There is an efficient US auto industry. It just isn’t in Detroit. Operative quote:

…there are 12 international car companies that have manufacturing operations in the United States. Collectively, they employ 113,000 Americans directly — even though that is less than the 239,000 at Ford, GM and Chrysler. However, those international car companies sell more cars than the Big Three and their customers love their products.


CNN: So you are against the bailout?

Zakaria: No. But the reasons the CEOs of Ford, GM and Chrysler present — that they will restructure, they are still competitive, they will change — are bogus; they won’t. The best argument for the bailout is that it is the most cost-effective jobs program that the government can run in the short term.

(Via Esteban.)

Here is a more philosophical piece by Roger Cohen.

Cisco does it again

Jim McGee comments on the case of Cisco (Fast Company article here, calling the company "socialist"), which seems to actually try to become a web 2.0 enterprise, whatever that might mean in the end. Cisco has always eaten its own dog food – back in the late 90s, I somehow bamboozled Pete Solvik, the CIO, into giving a talk to my students via teleconference. One of the things he stressed was the importance of being the first user of their own Internet technology. Back then Cisco was famous for serial buying of companies (for their technology) and for their extremely efficient internal procedures. It is one of the few companies I have seen that truly are strategy-driven, with strategy being an explicit choice and their vision and mission something distinctive.

The interesting thing here is that Cisco seems to be pulled in the direction of a higher-margin consulting company by its customers, which could leave it vulnerable to a low-end disruption from, say, Chinese home and SMB networking component companies powered by open source software. For those few companies that have been able to survive such a disruption, their survival has either been based on a move towards other places in the value chain (somewhat consistent with what Cisco is doing, it could be argued) or by a conscious choice to allow cannibalization by lower-margin products or services. In the cases I have heard of (such as Intel’s creation of the Celeron chip) this has dependent on top management with strong decision power and a long-term view of technology evolution. Could it be that decentralized management could make such a move, should it be necessary, harder for the organization to execute? Or,perhaps, easier, since at least the start phase can be done in a skunkworks fashion.

Nevertheless, Cisco is at it, again. I am looking forward to the rest of the story.

Posner and Becker: Let the Big Three go bankrupt

Both Posner (who has changed his mind) and Becker agree that the Detroit Big Three automakers should be allowed to go bankrupt rather than continue to suck up subsidies and produce cars the world market do not want. It is hard not to agree on principle, and in this case, also in practice.

The thing is, if the big three go bankrupt, this does not necessarily mean that Detroit is finished when it comes to producing cars. The designers, workers and machinery will be put to use – if nothing else, other automakers as well as entrepreneurs will come in, buy up the assets (free of dept), and start to compete by producing the most popular models, licensed models from other auto makers, or new ones.

The failure of the Big Three is complicated: A disastrous decision back in the fifties or sixties to make pensions the responsibility of individual companies rather than the government, short-sighted management, ossified unions, overfocus on automation (GM in the 80s), bad product quality, old-fashioned or just bad designs, short-term product development, financial rather than real innovation, slow product development (7 years per new model vs. the Japanese 3-4 in early 90s), too much focus on the domestic market, focus on what you can measure (such as parts commonality) rather than new customer needs and segments, political lobbying as marketing, and on and on and on….

Why not just let it die, and have something more sustainable (both in business and environmental terms) rise from the ashes?

Clayton Christensen on health care disruption

Here is Clayton Christensen giving a talk on disruptions in health care (but really a good introduction on disruption in general) at MIT:


Note that Clay uses Øystein Fjeldstad’s Value Configurations framework a little before 1:00:00 – a result of many conversations aboard the "Disruptive Cruise" which I arranged last year…. don’t say we aren’t doing our part over here….