The CEO's Mom

The Economist magazine's special section on corporate social responsibility was kinda unenlightened. Today I sent this letter to the editor:

SIR - Your January 19 Special Report confused corporate social responsibility (CSR) with philanthropy. As the Google.org example illustrated, giving away money is to a great extent the job of corporate foundations. The foundation is governed separately from the profit-making entity and does not relieve the latter of responsibility for good behavior in its own sphere.

Executives don’t need “a broader understanding of the world in which they operate” in order to effect CSR. They just need to do what their mothers told them: Clean up their own messes, and refrain from taking what belongs to other people.

Before corporations think about doing good, they should stop doing bad. Every oil spill cleaned at public expense, every bribe for a permit to wipe out a village and dig a mine, disappoints a mother somewhere. If Mom is an economist, she calls these acts “externalities.”

You claim jobs and wealth created by corporations outweigh these negative externalities. Good to know we’ll have cash in our pockets as carbon emissions-driven climate change ends civilization!

You did zero in on the bottom line of CSR: The sovereign charters a corporation in return for an expected social benefit. It is easy at this pass to imagine voters demanding either performance or revocation of charters. Charterless companies, like rusty freighters, will then shop for flags of convenience. We shall see what customers buy from companies chartered in third-world backwaters.

FRED PHILLIPS
San Diego

The writers missed the main point: State governments are lax in specifying and enforcing the terms of corporate charters, and corporations spend quite a penny to preserve that state of affairs. The governments, for their part, are addicted to the taxes and fees that flow from having a business incorporated locally, and they're aware that if they refuse a charter, the corporation can shop around other states and countries.

Double Trouble, Toil & Strife, Too Many Choices in Your Life

(One from the archives...)

My heart goes out to earnest Karen Olson ("Too Many Choices?" Utne Reader, June 2003, p.61 ), who is overwhelmed by everyday choices.  Karen fears that each choice irrevocably defines her identity, and defines the points on which others will judge her.  Karen wants freedom, but cannot separate the ideas of freedom and choice.  She is highly conscious of the symbolic aspect of decision making, for instance, the correlation of consumer choice with economic class.  She mentions her "struggles and anxieties."

OK, Karen, I understand you may have been deliberately naive, in order to provide a setup for the issue's subsequent, more profound articles about making choices.  Nonetheless, here is my advice for you, drawn from my book The Conscious Manager: Zen for Decision Makers:

You are smart enough to know your identity has nothing to do with consumer choices, and it's only a handful of buttheads on Madison Avenue who are trying to convince you otherwise.  So first, find out who you are.  How?  As my book's subtitle suggests, meditate!  You will find out who you are.  You will realize you do not need to struggle.  You will understand that anxiety doesn't help.  You will worry less about what others think. Your mind will be free. 

A member of the Japanese imperial family - whose every waking moment was strictly scheduled - once remarked that she pitied those who must constantly make choices about how to spend their time.  Such choices, she noted, distract one from the perfect freedom of mind that ritual behavior makes possible.  Her sentiment is similar to that expressed by Buddhist monks imprisoned in China; behind bars, their choices are limited, but their minds are not.

With a clear identity and a free mind, you can attack Step Two:  Decide on a mission.  Perhaps yours is to make the world's best magazine even better, or to raise your children in a loving, educational environment.  As a consequence of identity, clarity, and mission (this is Step 3), all your daily decisions will spring forth spontaneously.  You will be a conscious manager, making choices with greater speed, less anxiety, and fewer regrets.

As for the symbolism of making choices, please note the wisdom in "The Greening of Tony Soprano" (same issue, page 74), to wit, "Sometimes a duck is just a duck."

Cluster Bucks

If you’re an economic development wonk, this column is for you. (Others, ‘scuse me.) It proves that spontaneous growth clusters do happen, and don’t need to cost much.  Note especially the part about "knowledge and a shared sense of possibility and empowerment are every bit as valuable as money."

The New York Times recently gave me credit for being godfather to the Northwest Education Cluster. I love this group. While piles of politics, coveys of consultants, and bales of bucks have failed to produce robust entrepreneurial clusters in the industries that Oregon officially targets, NWEC took off and has thrived for five-plus years – at the cost of a few pizzas.

NWEC now comprises more than forty companies. Pearson has paid a half billion dollars to acquire one of them (eCollege), and others are raising out-of-town capital at an impressive pace.

Fine, committed people bought those pizzas, and were key to NWEC’s success. More about them below. Various Oregon magazines called to ask me about NWEC, and the following is a digest of the resulting interviews.

How did NWEC get started?
I had met investment banker Kelvin Ng socially, through the BudoDojo and the Harvard Club. In August 2003, he wanted to get Portland's education companies together, and asked Dr. Niki Steckler and me to emcee. I arranged a room at the Oregon Graduate Institute, added my education industry contacts to Kelvin's, and ordered some pizzas. Kelvin brought along Jim Snyder, who has been leading the group ever since.

What was your role?
I think the value I added was in mapping a way forward in the event that the group found value in meeting with each other. I also suggested the right questions to ask, to determine whether that value was there. (Jim still has a flow chart of all this in NWEC’s web archive.) It was Kelvin’s idea to call the meeting, but “just to see what will happen.” So, Kelvin’s initiative and mine complemented each other nicely. We decided not to force matters; if sparks flew, we’d host more meetings. If no sparks, we would enjoy the group’s company for an evening, and then forget about it.

As it turned out, there were sparks. We had more meetings at OGI. Bill Kelly, LaVonne Reimer, and Mona Westhaver injected a lot of energy into the early meetings. My company donated and hosted the group’s first web site. Subsequent developments played out actually much as the flow chart prescribed.

What did it take to get started?
To my knowledge, NWEC has received no direct government support – though some state education-related agencies participate – and in fact, not a whole lot of financial support from anyone. It is thus a good example of a decentralized, spontaneous, networked initiative for knowledge-based industry and economic development. My European friends are amazed that this can happen; in Europe, most such things are instigated by governments. But it is possible because when it comes to cluster formation, knowledge and a shared sense of possibility and empowerment are currencies every bit as valuable as money.

Your new book is on this topic. What is it about?
It is called Social Culture and High-Tech Economic Development: The Technopolis Columns (Palgrave-Macmillan 2006; European readers can get it direct from Palgrave here). The title pretty much describes what it is about, and it draws heavily on my experiences in Austin and Portland (and other places where I’ve consulted) encouraging technology-based regional development. I highlight the Northwest Education Cluster in the book, and Portlanders will recognize local figures and names. Ralph Shaw, Pierre Ouellette, and Chet Orloff contributed chapters. Some chapters are columns I wrote earlier for The Oregonian and the Portland Business Journal. Engineering the right social interactions among NEC members and between NEC and the larger community were key to the cluster’s success.

Had you been involved in anything like this before?
I’d been a founder and board member of the Austin Technology Council, which quickly grew to more than 400 company members. ATC’s founding had been preceded by several conferences at the IC2 Institute, all of which raised enthusiasm about software and tech cooperation in Austin. I wanted to see whether we could quick-start NWEC without all the preliminaries, and it proved to be a “yes.”

I’d used a DARPA grant to launch the Northwest Advanced Display Forum (NADFOR) in 1998 as a networking organization focusing on the business and strategy issues of the Northwest’s display industry. Eventually, we gave NADFOR to SID (the Society for Information Display), an international organization which until that point had dealt with technical issues only. But NADFOR, too, was a model I referred to when looking ahead to possibilities for NWEC.

I’ve consulted on new business incubation, in many countries. I helped the Portland Development Commission plan the incubator near Portland State University, and talked the Beaverton city council into starting the incubator which became the Open Technology Center.

Were there other success factors?
Oregon continues to attract educated people who are passionate about education. They are obvious employment targets for education companies, and obvious candidates to become education-related entrepreneurs. They don’t want to leave Oregon, so the companies have to come here and/or stay here.

Naturally, NWEC does what clusters do: meet for knowledge sharing and social networking, and connect with universities, governments, and other cluster initiatives in the region.  Technically of course NWEC is an industry association, representing companies in a nascent cluster.

Where VCs used to shun companies with “assets that could walk out the door tomorrow,” that is now changing. This means an enterprise with smart, committed, creative, relatively immobile people can now attract venture capital. A number of these companies also have proprietary code assets, but educational software is still not a mass market, nor one that commands high markups. Perhaps slow but sure growth, without the pressure for investor liquidity, is a success factor.

Why did you push in this area....why this particular project?
At that time in Portland, and I suppose still today, there was a lot of thrashing about concerning biotech, the off-shoring of semiconductor jobs, and so on. It absorbed a lot of energy and press attention, but I noticed there were several industries quietly thriving: outdoor clothing and gear (Columbia Sportswear and others), knives and small tools (Leatherman and others), running shoes and athletic wear (Nike and others), and education-related businesses (eCollege and others). Of course, flat panel displays were still thriving in Oregon as well, and several kinds of software companies. NWEC was an opportunity to help one of these unsung, embryonic clusters give itself a boost. It was a satisfying way to make a real difference when the biotech etc. initiatives were still just yakking.

Companies we've talked with say the vast majority of their revenue comes from outside the state of Oregon. Any speculation as to why this is the case? Do budget woes in Oregon education have something to do with it?
There are only 3 million people in Oregon. The vast majority of everything happens outside Oregon. Oregonians are passionate about education, but not always rich enough to pay for it.

The Oregon Business Plan Summit very much emphasized the importance of a strong education system, for benefiting the local economy and competing globally. Could this fuel companies within the education sector?
The Oregon Business Plan has been in development for at least five years now. What changes have been seen in Oregon education? Look at the (non-NWEC) companies involved in OBP. Have they lobbied to raise school taxes? Announced ongoing commitments to make significant gifts to school districts? I’ve been away and I’m uninformed, but I’d guess the answers are none, no, and no. The universities should partner with the NWEC companies and the school districts to write federal grant proposals for research and technology transfer. Our Congressional delegation would surely help with this.

I refer you to Jim Snyder's guest column in Education Week this month (Jan. 08).  The NW Ed Cluster's national profile grows.

Peru Travelogue 2007

We got in just after the labor riots, and got out just before the monster earthquake and the meteorite strike. For once in my life, good timing.

Lima, truth be told, is not a prime tourist attraction. It has an attractive historic square, with perhaps the world’s only cathedral that is located on an Avenida de los Judeos. Lima's "colonial balconies" have been restored and are a point of architectural pride.

What made it great was being tied into the local network, courtesy of my students at the CENTRUM business school of Pontificia Universidad Católica de Peru. César Ferrada took me to the famous restaurant José Antonio, located in a house that used to be Ferrada's father-in-law's home. Another student's mother is head docent at the Museo Arquiológico y Antropológico. She gave us an expert guided tour. Here's a photo of Hyon at the museum gift shop; note the photographer's reflection at right. Three MBA graduates, Lillian, Claudia, and Marina, hosted us at Dama Juana, a dinner show at the Larcomar mall in the Miraflores district. And of course the aikikai folks in Lima were most hospitable. Hotel Picoaga in Cuzco is owned by the cousin of one of still another of my students in Lima; this netted us a fruit bowl, a bottle of wine, and a nice room in the historic part of the hotel rather than the cramped modern section.

It has never rained in Lima in recorded history. Frequently there’s a heavy mist, but that's it. Plants have learned to eat the mist. The air in Lima is heavily polluted.

In Cuzco, there wasn't much air at all; it's over 11,000 feet high, more than twice as high as Denver. Above Cuzco, at Inca ruins called Saqsaywaman (pronounced 'sexy woman'), we saw people playing volleyball and soccer at an elevation of more than 12,000 feet! I was out of breath after just bending over to tie my shoe.

The Spanish were so eager to eradicate Inca culture that they made Cuzco more Spanish than Spain. The Inca's stonework was better, though, than anything the Spanish could muster. You can see the perfect joining. You can't see the 3-D interlocks and metal cores that made the walls impervious to seismic shock. An engineering marvel. As for Inca science, the Milky Way is so bright at 11,500' altitude, the Inca astronomy/astrology was based not on the patterns of stars but on the light and dark patches in the Milky Way.

We toured the Sacred Valley of the Incas. This is the valley of the Urubamba River, which forms part of the headwaters of the Amazon. Terraced fields as we go over the mountains (sometimes up to 13,500') from Cuzco to the Sacred Valley. Though it's southern winter (and the dry season in Peru), the weather is pleasant because we're so close to the equator. There was definitely snow at higher altitudes - and there were definitely higher altitudes – but glad to say we didn't go up there. There are poppy fields in the valley. We're already drinking too much coca tea, to battle the altitude sickness. Now poppies? Ooh, this is dangerous...

I ate alpaca steak (tasty), but did not try the other local delicacy, guinea pig. In the Cuzco cathedral, there is an old painting that pandered to the locals by depicting the main dish at the Last Supper as... guinea pig, the food of the Inca kings. The locals didn't know rodents aren't kosher and that the painting thus could not be accurate.

In the stores, alpaca clothing is scattered on tables and shelves, but vicuña scarfs and sweaters are in locked cabinets. Much more expensive, and you can see the difference in the quality of the wool – vicuña wool seems to glow with its own light.

Amazing Inca constructions at Ollantaytambo. If I wanted to get away from it all and write a book, I'd go to Ollantaytambo. Cute modern (well, post-Inca) village with B&Bs. Internet access might be a problem though, and I can't write without my Internet...

Now to the most famous sight in Peru. We found it well worth the trip, but unless you're a hard-core climber, you'll see your fill in a half day. Machu Picchu was abandoned before the Spanish arrival, about 500 years ago, and we don't know why. These are not ruins; they are complete buildings, with only the thatch roofs missing. When M-P was "rediscovered" in 1911 (actually, there were a few families living here then), the terraces were overgrown. Now a small herd of llamas - "Inca lawn mowers" - keeps things neat.

No one could explain why it is the women in this country who wear top hats. Men wear wool caps with ear flaps.

Haragei: A story of Beppu

The Conscious Manager: Zen for Decision Makers featured stories of the weird and wonderful, and readers have asked for more. Here we go…

My wife had asked me to bring her chabako, traditional tea boxes, from Japan. My host in the city of Oita agreed to take me on a chabako quest, before delivering me to the Oita aikido club that evening. Because the boxes were more likely to be found in Beppu, the neighboring hot springs resort town, we climbed into Keiji’s car and were soon navigating the narrow streets of Beppu.

(Nomao map of Beppu)

“The allies never bombed Beppu during the Pacific War…unfortunately,” Keiji remarked.

“Why do you say ‘unfortunately’?” I asked.

“They bombed Oita very obligingly,” he replied, “and we got to rebuild it with nice, wide streets, good for driving cars. But it was a dirty war, and the American pilots knew they would need a bath afterward. So they kept the bombs away from Beppu, and it still has these damn narrow streets. By the way, isn’t this a lot of trouble to get a tea box for your ex-wife?”

“Keiji-san, I’m sorry if I was unclear. This is for my wife. I don’t have an ex-wife.”

Keiji said, “Neither do I…unfortunately.”

By the time I could control my laughter, we had arrived at an old-fashioned tea retailer. The tea merchant explained that his deliveries came in ordinary cardboard boxes – but if we drove up another three narrow streets we would find a merchant who still received the old-style tin-lined wooden boxes. Keiji and I thanked him and turned to leave, but the tea merchant continued to talk, saying that he would close a few minutes early because on Tuesdays he always went to train at the Beppu aikido club.

Keiji, a thoroughly modern Japanese who worked in an Oita government office, was shocked. Japanese shopkeepers do not make unnecessary small talk with casual customers. Moreover, not many people practice aikido, even in Japan, and I could almost hear Keiji thinking, “What are the chances…”

In fact, the odds of one aikidoist randomly finding, in a small town on Japan’s far-southern island, another aikidoist who happened to be an impolite chatterbox were vanishingly small. I was surprised too. I checked my clothing for telltale aikido logos, finding none.

Finally, Tea Guy ran out of steam and stood there with a “what am I saying?” look on his face. Keiji put him out of his misery, explaining that the visiting gaijin with no ex-wife was an aikidoist too. Tea Guy was relieved and satisfied; this obviously had been haragei, Japanese telepathy, and was therefore completely reasonable.

Keiji was shaking his head over the incident well into the next day. It’s not that he did not believe in haragei; rather, he was shocked only by the shopkeeper’s chatty breach of social etiquette.

Remember to enter the contest: Propose a title for the follow-up to the Conscious Manager book.  Post your entry in a comment on this page, or email info(at)generalinformatics.com

Coming: Pirate Analog TV Stations

We baby boomers get what we want. That’s why there are so many classic rock stations on the radio.

No technophobe or Luddite me; I’m a computer power user and an e-commerce guerrilla. But I just have no patience with digital television. Find three remotes so I can switch from my kids’ DVD connection to cable? Not worth the bother. Play with wires, connectors, and downloaded upgrades before I can start an X-box game? Forget it; I have only one free hour for games, so let’s reach into the closet for the Monopoly set. Yes, the version with a cardboard playing surface.

The nice thing about analog TV is you can just switch it on and switch it off.

Why are we about to lose analog TV? “To free the public’s spectrum for other uses.” OK, digital transmission uses less spectrum than analog, but most of us get TV via cable anyway. So those “other uses” won’t include much TV. Well, it turns out that the spectrum will be auctioned to wireless providers. But we don’t know what the wireless providers will use it for.

After the FCC’s 2007 decisions on consolidation of news ownership, are you going to trust them to let out our spectrum in the best public interest?

In any case, baby boomers remember Pacifica radio (not to imply Pacifica isn’t still here – it is) and other pirate radio stations, some originating from ships at sea. Baby boomers rule, simply because there are a lot of us.

Expect bootleg analog TV stations any day now.