Follow the Trends

• Almost 70 percent of executives around the world say that global social, environmental, and business trends are increasingly important to corporate strategy, according to a McKinsey survey. Yet relatively few companies act on the global trends they think will affect them most; among those that do act, only 17 percent report significant benefits.
• One reason might be underinvestment in trends. For instance, many companies that pursue growing consumer segments in emerging markets build operations there but don’t develop lower-cost products.
• Companies that don’t act on trends they think will be important cite a shortage of skills and resources, higher strategic priorities, or a lack of possible responses to these trends.

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The Coming World of Collaboration - Follow up

Howard Rheingold, author of Street Mobs and invited lecturer at California’s renowned TED conference explains the phenomena of collaboration and its evolutionary effect on creating new forms of wealth and perhaps reforms to traditional economic theory. He initially notes that traditional success in both business and politics was fueled by the notion of Darwin’s biological theory of evolution; that the strongest and fiercest survive. But while this ideology has held true throughout the life of capitalism – he’s sure to emphasize that capitalism will continue to rule – the birth and growth of technology has vastly spread cooperation, collective action, and complex interdependencies. This, he notes, has forced competition to make a little room.

What Howard is really trying to get across to us is that through the cooperation, collective action, and interdependencies new forms of wealth can and are being created. In an example he gives early in his lecture he compares this collaboration to prehistoric times when small family units survived by hunting small game like rabbits and other animals. At some point however, hunters gathered together and collaborated to hunt the massive mastodon. His point being that today we can collaborate to conquer bigger “game.”

While the ideas presented could be criticized as rudimentary, it’s no farce that this level of collaboration is occurring today and is being led by some of the world’s biggest corporations. IBM, Sun Microsystems, and other leading IT firms are open-sourcing much of their software and encouraging other developers, be it graduate students or high school kids, to work and advance the available research. Toyota gives extensive training to its suppliers to help them increase their production efficiency even though many suppliers also work with their direct competitors. Even within these fierce markets, companies are opening up and welcoming collaboration. Why? Rheingold argues this is happening because it is a certain kind of sharing in self-interest.

For example, by allowing bloggers to earn money through its Adsense program, Google enriched itself by creating a new market for advertisers. Amazon.com opened its application interface to over 60,000 designers which in turn has grown the number of Amazon stores significantly while making money for virtual store owners. EBay, the auction giant, created an enormous market by creating a feedback mechanism that allows users to trust each other. All these examples reinforce how collaboration can turn a Prisoners Dilemma into an Insurance Game.

The Prisoners Dilemma, as in all game theory, states that “the only concern of each individual player is maximizing his/her own payoff, without any concern for the other player's payoff. The unique equilibrium for this game is a Pareto-suboptimal solution—that is, rational choice leads the two players to both play defect even though each player's individual reward would be greater if they both played cooperate.” The distrust players have for each other in this model is what dictates their rationale. If both could trust each other, they would be apt to work together and obtain larger rewards. This model in which trust is present between actors is known as the insurance game. This is what is beginning to happen. The most evident example of this is EBay. By establishing trust between buyers and sellers a huge new market was established where lower prices are often found for buyers and many new markets for goods that normally can’t be sold are now a click away for sellers.

These actions are all about self-interest to grow and add more to the already existent. Rene Descartes, the famous philosopher explained that we need a new way of thinking to understand absolute truth. While absolute truth would be nice, we can start by understanding the sociological and economic evolution that is the future of commerce and innovation. Globalization is shaking the foundation of traditional thought. To finish, I will leave you with the question Rheingold poses in his book Street Mobs. Are the populations of tomorrow going to be users, like the PC owners and website creators who turned technology to widespread innovation? Or will they be consumers, constrained from innovation and locked into the technology and business models of the most powerful entrenched interests? The answer seems to be getting clearer.

Sources:

TED Lecture – http://www.ted.com/talks/view/id/216

Wikipedia: Game Theory & the Prisoners Dilemma –

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The Coming World of Collaboration

Howard Rheingold talks about the coming world of collaboration, participatory media and collective action -- and how Wikipedia is really an outgrowth of our natural human instinct to work as a group. As he points out, humans have been banding together to work collectively since our days of hunting mastodons.

You can learn more about Howard Rheingold and his work by visiting his blog at http://www.rheingold.com/

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Young People Embracing Entrepreneurship

I found this survey on Inc. Magazines entrepreneurial section of their website (www.inc.com) and thought I would post it up and see if there's much of a response...

"A recent survey commissioned by the Ewing Marion Kauffman Foundation found that four out of 10 youths between the ages of 8 and 21 either have started or want to start their own business in the future.

Of those who have the entrepreneurial spirit, 92 percent said they want to found a business to use their skills and abilities, 89 percent want to build something for their future, and 85 percent hope that creating their own company will result in a high salary, according to the survey of 2,438 young people.

Overall, 63 percent of all respondents said they think that if they work hard enough, they can start their own successful business. (Source)"

With the amount of information and tools at the tips of peoples fingers it's now easier than ever to accomplish the goal of starting your own business. I'm curious to know who many people reading this are interested in being their own boss some day??

Poll: Bullshit Is Most Important Issue For 2008 Voters

Who's Who of World Wide Business

Who are the mover's and shakers? Here they are, the worlds top 25 businesses. Coincidentally almost all of these businesses were listed on Forbes' list of most desirable companies for MBA's to work at. It's also important to note that many of these countries are growing and expanding due to new ventures in emerging economies like China, India, Bangladesh, and eastern European countries. View the full Fortune 500 here.

Rank	Company	Revenues ($ millions)	Profits ($ millions)
1	Wal-Mart Stores	351,139.0	11,284.0
2	Exxon Mobil	347,254.0	39,500.0
3	General Motors	207,349.0	-1,978.0
4	Chevron	200,567.0	17,138.0
5	ConocoPhillips	172,451.0	15,550.0
6	General Electric	168,307.0	20,829.0
7	Ford Motor	160,126.0	-12,613.0
8	Citigroup	146,777.0	21,538.0
9	Bank of America Corp.	117,017.0	21,133.0
10	American Intl. Group	113,194.0	14,048.0
11	J.P. Morgan Chase & Co.	99,973.0	14,444.0
12	Berkshire Hathaway	98,539.0	11,015.0
13	Verizon Communications	93,221.0	6,197.0
14	Hewlett-Packard	91,658.0	6,198.0
15	Intl. Business Machines	91,424.0	9,492.0
16	Valero Energy	91,051.0	5,463.0
17	Home Depot	90,837.0	5,761.0
18	McKesson	88,050.0	751.0
19	Cardinal Health	81,895.1	1,000.1
20	Morgan Stanley	76,688.0	7,472.0
21	UnitedHealth Group	71,542.0	4,159.0
22	Merrill Lynch	70,591.0	7,499.0
23	Altria Group	70,324.0	12,022.0
24	Goldman Sachs Group	69,353.0	9,537.0
25	Procter & Gamble	68,222.0	8,684.0

Thinking of Going for an MBA?

A big question a lot of people ask is are MBA's really worth the cost?

You can expect to spend anywhere from $30,000 to $150,000 (Typically these are the ivy league's) for the degree. While more compensation is one of the benefits of MBA's they typically provide more opportunities for higher corporate positions and leadership roles. Simply put, they can turbo charge your business career.

Recently there have been some criticisms of American MBA programs, specifically the lack of emphasis on ethics and perhaps an over emphasis on management theory.

I figured I would let the numbers do the talking and dug up this table that shows pre and post MBA compensation from top American business schools. I thought it might be of interest for others to see.

Rank	Business School	Pre MBA Salaries*	Median Total Pay Package	Percent Increase
1	U. of Pennsylvania (Wharton)	$60,000	$156,000	160%
2	Northwestern (Kellogg)	$56,000	$142,000	154%
3	Stanford	$65,000	$165,500	155%
4	Harvard	$65,000	$160,000	146%
5	Columbia	$50,000	$142,500	185%
6	Duke (Fuqua)	$49,000	$128,500	162%
7	MIT (Sloan)	$55,000	$149,000	171%
8	Chicago	$55,000	$140,000	155%
9	Cornell (Johnson)	$50,000	$135,000	170%
10	Dartmouth (Tuck)	$50,000	$149,500	199%
11	Michigan	$50,000	$131,000	162%
12	NYU (Stern)	$45,000	$140,000	211%
13	UC -- Berkeley (Haas)	$50,000	$135,000	170%
14	Virginia (Darden)	$50,000	$135,000	170%
15	Yale	$45,000	$130,000	189%
16	UCLA (Anderson)	$55,000	$136,500	148%
17	Carnegie Mellon	$45,000	$125,000	178%
18	UNC -- Chapel Hill	$48,000	$125,000	160%
19	Texas -- Austin (McCombs)	$45,000	$107,000	138%
20	Indiana (Kelley)	$42,000	$114,000	171%
21	USC (Marshall)	$45,000	$112,000	149%
22	Purdue (Krannert)	$35,000	$101,500	190%
23	Rochester (Simon)	$40,000	$110,000	175%
24	Georgetown (McDonough)	$45,000	$116,000	158%
25	Washington U. (Olin)	$42,000	$109,000	160%

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