Business is not evil: Lessons from the insanely great life of Steve Jobs

We live today in a world where many people consider business evil, corruptions corrupt, executives greedy.   It has become fashionable to bash Wall Street, lambast every move intended to boost profits, and even condemn capitalism itself.   Today, I reminded my students that business can indeed be a noble profession.  People can transform the world and make others' lives better through profit-making enterprises.  In society these days, we make heroes of those who work for non-profits and those who are great philanthropists. Surely, they are heroes. They do great work.  However, I believe business is also a noble profession, a deeply noble profession whereby you can create value, transform people’s lives, and create jobs that give people the opportunity to work and earn money to support their families.  Profit-making and social impact need not be mutually exclusive endeavors.  One can pursue profit and make the world a better place.  One need not only do that through an inherently "social enterprise." 

I mentioned this to students today as we reflected on the death of Steve Jobs.   He was more than just a successful CEO. He was a man who had a tremendous impact on society, who transformed the world. He did a great deal of good, as a business person who ran firms in pursuit of profit. Every day a doctor uses an iPad, a child with cancer watches a Pixar film and laughes, a person talks with their relative in a distant land via an iPhone, we see the transformational positive impact that he has had on the world.   Think about the incredible things that many people are doing to make others' lives better, using the technology that Jobs introduced to us.  

I also reminded students today that innovation, creativity, and entrepreneurship cannot happen without capital.   Steve Jobs persuaded investors to invest in him and his companies.  They believed in his vision.  They provided him the funds to pursue his dreams.  Many of those investors are now lambasted as "fat cats" from Wall Street.  Let's be careful before we paint with such a broad brush.   Access to capital is critical to those bold innovators who wish to change the world.   Business can indeed be a noble profession.

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Steve Jobs' Commencement Speech

I've posted this speech before, but I felt it was important to post again this morning.  If you have not seen this speech, you MUST watch.  It proves rather eerie listening to it today, but the message is so powerful.

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Henry Stewart Talks: Making Decisions

Prof. J. Edward Russo, S.C. Johnson Family Professor of Management at Cornell University, has edited a new seminar series on decision-making.  Henry Stewart Talks, a publisher of online seminars by leading experts, has published this series.  I'm honored to have been asked by Professor Russo to participate in this seminar series, along with accomplished researchers such as MIT's John Carroll, Gary Klein of Macrocognition, and Duke's Robert Clemen.  I hope you will take a look!

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China, Inflation, and Margins

The Wall Street Journal reports that Yum Brands (owner of the KFC, Taco Bell, and Pizza Hut restaurant chains) has experienced a substantial decline in profit margins in China.  While the company continues to grow sales rapidly in China, inflation has caused its costs to escalate significantly.   Meanwhile, Yum Brands has been offering value-priced meals to attract customers.   In an inflationary environment, value-priced meals may seem quite attractive.  However, if costs rise faster than prices, the firm has a problem.   The story reminds us of the risk that inflation brings for firms operating in China.   A firm that sources components and raw materials in China may be able to raise prices in developed nations in which it sells the finished products. The problem is more severe for firms making and then selling products in China, given the low incomes of average citizens. 

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Reasserting your Brand

Author and consultant Nick Tasler has a good article on Business Week's website regarding how firms can reassert their brand after a rocky period.   He uses Starbucks' turnaround recently to illustrate his points.  Starbucks realized it had strayed from its coffee roots and diluted its brand equity.   It had to clarify the brand's positioning.  Starbucks did so by trying to reassert itself as the "coffee authority."  Tasler argues that firms must take three steps to reassert their brand.


1. Decide what your equivalent is to being “the coffee authority.”   What do you want to be known for in the market?  For what do you want to be known as a leader?

2. Decide what you should start doing more of to reassert your authority.  What innovations can you bring to market to burnish your reputation as a leader in a particular market space?   Where should you invest to rebuild your competitive advantage? 

3. Decide what you should stop doing in order to reassert your authority.   What activities should you stop doing because they dilute your brand, distract management attention, and make you far too similar to other players in the market?  

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SNL Parody - Netflix

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The Challenge of Evaluating Leaders

Here in Boston, the Red Sox implosion has dominated the headlines for the past week. Manager Terry Francona has exited. Now attention has turned to General Manager Theo Epstein. How much blame does he deserve? Most people would place significant responsibility on Theo for selecting a series of high-priced players who have under-performed badly. However, observers then note that he has won two World Series during his tenure. Theo typically receives much credit for those championships. However, a closer look reveals that a number of key players from those teams were not selected by Theo. Consider the importance of Manny Ramirez, Johhmy Damon, Kevin Youkilis, Jason Varitek, Jon Lester, and others who were chosen by the prior regime (as well as Josh Beckett and Mike Lowell who came in a trade engineered when Theo briefly quit in 2006).

Consider too the credit given to Bill Belichick for the Patriots' three Super Bowl championships. Clearly, he deserves great credit for coaching those teams. However, what about player selection? Naturally, he chose most of the players. However, a small core of crucial players, particularly on defense, were chosen by Bill Parcells. Belichick has not won a Super Bowl without that core. Those core players include Ted Bruschi, Willie McGinest, Troy Brown, Ty Law, Ted Johnson, and Adam Vinateri. That's a key group not brought to the team by Belichick.

What's the lesson for those in business? Be careful when evaluating leaders at all levels. Performance lags decisions and actions by quite some time in many firms. Thus, today's success or failure often cannot easily be attributed solely to today's leaders. For this reason, firms also need to be careful with rotational programs. Moving folks too quickly can make it very difficult to judge their performance accurately.

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