Stanford University Press Blog

SUP remembers Dr. Robert Hoyk

Everyone at Stanford University Press was saddened to learn of the death of Dr. Robert Hoyk on March 12. Along with colleague Dr. Paul Hersey, Bob authored one of the best selling titles published under our Stanford Business Books imprint. Initially released in cloth in 2008, the book The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior; 45 Psychological Traps that Every One of Us Falls Prey To, was released in paperback in 2010.

With its mix of case studies describing real world ethical traps faced by people at all levels in all types of organization, and practical strategies for avoiding them or coping with them, the book has been extremely successful. This success has been, in large part, due to Bob's two great gifts as an author. First, his engaging and "no frills" writing style made the normally demanding topic of business ethics easily accessible to both business people and college students alike. At one level, The Ethical Executive can be read cover to cover on a transcontinental flight yet, at a deeper level, it can sustain classroom discussion and debate for a semester or more. Second, Bob's tenacity and imagination translated into a constant stream of creative and extremely effective marketing initiatives. As as a result he probably sold as many books himself as did our sales and marketing department!

Bob's book is on track for another very impressive sales year: a tribute to his skills and personal qualities that he'd have appreciated.

How innovative are Forbes' "Most Innovative Companies?"

Some not so much, argues guest-blogger and SUP author of ENDURING SUCCESS: What We Can Learn from the History of Outstanding Corporations Christian Stadler, in a post written originally for his own blog, Enduring Success: 

 With the entire craze about innovation it was only a matter of time before we get a list of the world’s most innovative companies. Forbes published one based on a new book by Jeffrey Dyer, Hal Gregersen, and Clayton Christensen. Considering the stature of the three I would have expected a ‘solid’ ranking. By that I mean a ranking based on a method that really captures innovation. Unfortunately that is not the case.

Forbes’ innovation premium is calculated by comparing the Net Present Values of Cash flows (i.e. value of existing business) with the market capitalisation. The assumption is that investors bid up the stock value if they expect future innovation results. For two reasons this does not work. First, investors do not necessarily know what innovations companies work on. Often firms keep this secret to avoid competitors from copying their ideas. Second, investors bid up stocks for many reasons not related to innovation such as brand value, future competition, or economic environment. For example the market cap of an oil firm is going up when investors expect a crisis in the Middle East. For those oil companies having large reserves in politically safe countries the stock price is going to sore even more.

So how does Forbes’ list hold up when using other measures of innovation? Not very well! The most widely used measurement is patents. I ranked Forbes’ ‘Most Innovative Companies’ according to the number of patents they published in 2011 so far. The ranking is fundamentally different (for those into statistics, the correlation is -0.1285). Not much changes if I weigh the patents according to company size (correlation is -0.2043).

Patents are not an ideal measurement either as some innovations are difficult to patent (e.g. process innovation). This means that some industries patent much more than others. But even within a particular industry the Forbes ranking turns out to be flawed. Take Henkel, Procter & Gamble, and Unilever. According to the Forbes list, P&G is much more innovative than Unilever and Henkel comes last. Looking at patents P&G is still better than the other two but they are much closer together and Henkel has more patents than Unilever.

While alternative measures of innovation such as the number of new products introduced or patent citations (i.e. how often a patent is cited) might not produce exactly the same results, my crude patent count shows that Forbes’ list simply does not work. This does not undermine the book of Dyer and his colleagues as the companies on the list are probably all pretty innovative, but calling Salesforce.com the world’s most innovative company is a bit of a stretch.

		Number of patents in 2011	Forbes' ranking
1	Toshiba	3610	94
2	Qualcomm	3586	61
3	Microsoft	1877	86
4	ABB	967	93
5	Procter & Gamble	964	24
6	Apple	888	5
7	L'Oréal	836	26
8	Henkel	744	83
9	Corning	716	69
10	Schlumberger	670	27
11	Boston Scientific	578	91
12	Daikin Industries	532	70
13	Google	475	7
14	Unilever NV	465	74
15	Alstom	463	29
16	Rolls-Royce Holdings	439	76
17	Kao	438	66
18	Syngenta	428	79
19	Halliburton	426	97
20	Air Liquide	393	90
21	Alcon**	372	21
22	Oracle	358	77
23	BAE Systems	350	96
24	Johnson Controls	314	73
25	Colgate-Palmolive	294	33
26	Areva	268	37
27	SAP	256	63
28	Juniper Networks	207	42
29	Monsanto	205	10
30	Terumo	204	14
31	Sandvik	200	58
32	Fresenius SE	194	78
33	Kraft Foods	187	82
34	Essilor International	185	25
35	Synthes	170	41
36	HTC Corp	167	56
37	Fresenius Medical Care	145	51
38	Air Products & Chemicals	140	60
39	Nidec	138	13
40	Adobe Systems	136	54
41	Kone	135	39
42	Altera	132	99
43	Atlas Copco	130	67
44	Automatic Data Processing	124	87
45	Reckitt Benckiser Group	123	11
46	Ecolab	123	28
47	Stryker	108	95
48	Cameron International	107	85
49	LeGrand	106	80
50	Amazon.com	104	2
51	Nintendo	103	20
52	Beiersdorf	88	23
53	NetApp	87	34
54	Hindustan Unilever	86	6
55	Intuitive surgical	84	3
56	Rockwell Automation	78	38
57	Praxair	71	43
58	Fanuc	70	45
59	Celgene	58	12
60	Agilent Technologies	58	55
61	Intuit	58	84
62	Emerson Electric	55	64
63	Citrix Systems	53	36
64	Tencent Holdings	50	4
65	Sany Heavy Industry	47	72
66	Avon Products	46	47
67	SMC Corp	43	49
68	CSL	42	32
69	Hershey	37	46
70	Danone	35	35
71	General Mills	32	31
72	Thermo Fisher Scientific	30	71
73	Natura Cosméticos	23	8
74	Infosys	23	15
75	Richemont (Compagnie Financière)	23	62
76	ASML Holding	21	59
77	ConAgra Foods	19	100
78	Keyence	18	17
79	Salesforce.com	17	1
80	FMC Technologies	15	18
81	Secom	13	52
82	Kellogg	13	57
83	Tenaris	13	92
84	Paccar	12	48
85	Anheuser-Busch InBev	9	53
86	Danaher	7	68
87	Starbucks	6	19
88	Schindler Holding	2	81
89	Campbell Soup	1	65
90	Zoomlion Heavy Industry	1	75
91	Activision Blizzard	0	22
91	Bharat Heavy Electricals	0	9
91	CA	0	98
91	China Oilfield Services	0	40
91	Estée Lauder Cos	0	44
91	ICL-Israel Chemicals	0	30
91	Maroc Telecom	0	88
91	PepsiCo	0	50
91	Pernod Ricard	0	16
91	Precision Castparts	0	89

 

Beyond Earth Day

It's wonderful that, for over 40 years now, we've made a point of remembering "Mother Earth" each April and, perhaps, renewing our commitment to doing what we can to reduce our costly footprint on the planet.  Recent programs and initiatives have greatly increased public awareness of the necessity to "reduce, reuse, and recycle," but it's becoming clear that we need to be doing more, and not just in our personal lives.  What can businesses, for example, do to make a difference?   

Plenty, show authors Chris Laszlo and Nadya Zhexembayeva in their new book, Embedded Sustainability: The Next Big Competitive Advantage.  As they point out in a recent article in the European Financial Review, "The linear throw-away economy, in which products and services follow a one-way trajectory from extraction to use and disposal, can no longer be supported, as we are simply running out of things to unearth and place to landfill.  Consumers, employees, and investors are beginning to demand socially and environmentally-savvy products without compromise, while radical transparency is putting every company under a microscope."  Embedded Sustainability, the incorporation of environmental, health, and social value into the core business with no trade-off in price or quality – in other words, with no social or green premium - is the answer.

Embedded Sustainability helps readers to comprehend—and act on—the notion of embedded sustainability, explaining why it is now a requisite in every sector, how smart companies are creating even higher value for their customers and investors, and what new management competencies are needed to compete in today's marketplace. 

About the Authors:

Chris Laszlo, Ph.D., is the author of Sustainable Value: How the World's Leading Companies Are Doing Well by Doing Good (2008) and The Sustainable Company(2003, paperback 2005). He is an Associate Professor at Case Western Reserve University's Weatherhead School of Management, where he is the Faculty Research Director at the Fowler Center for Sustainable Value. Chris is also the co-founder and Managing Partner of Sustainable Value Partners, LLC, an advisory services firm specialized in sustainability for business advantage.

 Nadya Zhexembayeva, Ph.D., is the Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management, the European business school based in Slovenia, where she teaches leadership, organizational design, and sustainability strategy. Nadya currently serves as Vice-President of Challenge:Future, a global youth think tank. She is a member of the Advisory Board of the Fowler Center for Sustainable Value at the Weatherhead School of Case Western Reserve University in Cleveland Ohio. Nadya is also an Associate Partner of Sustainable Value Partners, LLC.

Minority Women Business Owners Much More Socially Responsible Than Their Male Counterparts

That is just one of the many astonishing statistics that Mary Godwyn and Donna Stoddard discuss in their new book, Minority Women Entrepreneurs: How Outsider Status Can Lead to Better Business Practices.    
  For example, did you know that minority women start new businesses in the U.S. at four times the rate of non-minority women and men?  And yet their stories are seldom told.  Minority Women Entrepreneurs gives voice to these women and, as recent attention in the New York Times and Business Week shows, the world is beginning to pay attention.

Through in-depth interviews and firsthand accounts from minority women entrepreneurs, the authors found that minority women use their outsider status to develop socially conscious business practices that support their communities in innovative and exciting ways. They reject the idea that business values are separate from personal values, and instead balance profits with social good and environmental sustainability. This pattern is repeated in statistical evidence from around the globe, but until now, there was no clear explanation of why. Using sociological and psychological theories, the authors explain the tendency for women, especially minority women, to create socially responsible businesses. The findings in this book suggest fresh solutions to economic inequality and humanistic alternatives to exploitative business policies. Herein lays a radically new, socially integrated model that can be used by businesses everywhere.

 

Didn't find exactly what you wanted under the tree?

College Bowl season may be drawing to a close, but the Super Bowl is just over a month away; the NBA and NHL and getting into high gear, and Spring Training is just around the corner.  Want the inside story on what's going on behind the huge stadium crowds, television broadcasts and advertising, fantasy leagues and more?  Money Games: Profiting from the Convergence of Sports and Entertainment, by sports business industry expert David Carter, offers a detailed look at just how and why the coming together of the sports and entertainment industries has generated billions of dollars over the last decade--and offers tips on how you can profit from it.   

Carter, Executive Director of USC’s Sports Business Institute at the Marshall School of Business and Principal of the industry-leading Sports Business Group, conducted over three dozen interviews with senior sports industry executives from around the world, such as the Presidents of ESPN and EA Sports, on both the current sports landscape and where the sports experience might be headed.  Readers will find a new side of sports revealed in Money Games, and will be privy to the game of business chess that has parlayed endless fan interest and entertainment access into billions of dollars, while revisiting the stories that they know in a new way. 

 Money Games not only analyzes how industry stakeholders have monetized this convergence, but also provides readers with answers to this core question: how can the sports business continue to profit from the blurring of sports and entertainment?  Carter considers a wide array of implications for television content, video gaming, athlete branding, the Internet, mobile technology, gambling, sports-anchored real estate development, venue technology, and corporate marketing—in short, those areas where business opportunities exist now that sports and entertainment have become one.

 Businesspeople who are engaged in the Sports Industry can use this book to take stock of the waters in which they swim.  Entertainment and Sports have been converging at such a rapid pace; this book will be useful for these readers to better understand their business landscape, the changes that they themselves may have been a part, and to determine their opportunities for the future.  Likewise, readers who are eager to participate in the sports and entertainment world (inclusive of MBAs) will find in this book a vivid depiction of the Sports Business—built on reflections from and research within the industry. 

 Today’s sports business is not that of your father’s baseball game, but of a synergy between entertainment and sports that makes for a much more dynamic and three dimensional experience in which the consumer can be saturated.  Money Games is the new sports business playbook for this landscape.

We've got a little list...Part II

 These days, we all know someone in need of a little friendly personal finance advice (indeed, some of us might count ourselves among them!).  Sure, financial advice columns abound, but they generally only address one issue at a time.  Where do we turn, in the absence of our own personal guru, for advice on all of life's money questions?  Bob Aliber's completely revised and updated  Your Money and Your Life has the answers.   

David Warsh, long-time financial guru and "Economic Principals" columnist at the Boston Globe, has this to say about "Your Money and Your Life" in his economicprincipals.com, his on-line, independent weekly commentary on the production and distribution of economic ideas:

"Wondering whether to buy a new car or one that has been slightly used? To prefer public to private education? To rent or buy?  To load up on insurance? To annuitize or not?  Curious about how to construct a bond ladder?  Anxious about senior health care? Aliber is full of wisdom on all these counts and more."

The perfect stocking stuffer for your financially challenged friends and family!

Innovation helps shape the HP Way

Looking at the histories of big companies, we often contribute their successes to the competent leaders and the loyal employees who follow their direction. But what if defiance could be even more of a breakthrough for a company’s success? In their book, The HP Phenomenon: Innovation and Business Transformation, Charles H. House and Raymond L. Price explain how not following the leader can yield great results for the individual, the leader, and the company. In a recent review in Forbes, George Anders commends House and Price for pointing out many of these sorts of bottom-up instances of success that were possible at HP.

It would seem like bad leadership to allow dissention to continue in your company, and even worse if these ideas that the leader rejects are good ones! As House and Price reveal, it is not bad leadership to create a company that is smart enough to run itself. One of the most intriguing anecdotes in the book is that of Charles House himself. As an HP engineer in the ‘60s, House was set on pursuing a large-screen electrostatic monitor. When he was told, “When I come back in a year, I don’t want to see that product in the lab!” by a superior, he took it as incentive to get the monitor out of the lab – and into production as soon as possible. When the monitor turned out to be a great success, House was awarded the “HP Award for Meritorious Defiance”. 

Who knew that ignoring a direct order from a superior could lead to success for all –profits for the company, awards for the defiant, and a successful product, which always reflects well on the leader. While House and Price’s account is certainly not advocating for complete defiance in business relations, it points out how success can come from the most surprising innovations.  For HP, seeking new methods of business management and surprising the world with new techniques is what helped to create the HP Way. Despite some flaws along the way, the stories of unexpected as well as the intricately planned successes leave House and Price very optimistic about the future of this ground-breaking company.

Are you in need of a transformation? Goldman on Transforming Toxic Leaders

We all encounter problems in the workplace at one time or another: your boss is too hard on you, you don’t get along with your co-workers. But these are minor complaints that most of us learn to deal with. Lately, there have been major concerns coming up about toxicity in the workplace. Alan Goldman, author of Transforming Toxic Leaders, discusses in an interview on Psychjourney Podcasts how “toxic” leaders affect the workplace and how, many times, a transformation of the organization of the system is what can remedy a toxic situation, not just an adjustment of the leader themselves.

Toxic leaders can be described in many ways and often share a set of common traits. These traits not only make them hard to deal with, but often contribute to their success. Narcissism, obsessive compulsive tendencies, attention to technical detail – these are all traits which can make a leader great at his trade, but horrible at creating a functional working environment.

Goldman asserts that while there are cases where a toxic leader would be toxic in any situation, in many cases you can eliminate toxicity by reorganizing the structure of the workplace and putting experts in their rightful places. He uses the example of a surgeon who is a master of the technical aspects of his job but has no communication skills, yells, and makes his co-workers and patients feel scared or uncomfortable. Goldman coached the surgeon and suggested reorganizing the staff team so that the master of the surgical aspects of the profession worked in tandem with a surgeon with personal skills.

Overall, Goldman attributes toxicity in the workplace to individual psychology and staff organization – the latter being infinitely easier to deal with. With these ideas in mind, one might ask if toxicity is a necessary result of becoming a successful leader. Is it possible to become a master without creating a toxic environment? Goldman seems optimistic that non-toxic environments can exist and that even if toxicity enters the workplace, it can be eliminated.

Perhaps the next time you go to work you’ll look around and ask if your work environment is “working.” If not, how can you eliminate toxicity?

Author James March named Gurus' Guru by The Economist

James March has been named one of the gurus in a list complied by The Economist Guide to Management Ideas and Gurus, announced in an article in the Economist. We congratulate James March (author of Explorations in Organizations and The Dynamics of Rules: Changes in Written Organizational Codes) on this much deserved accolade. He is author of ideas, like satisficing, which has become part of the vocabulary across the social sciences and business.  It is the idea that we as consumers and managers go for the less-than-rational decision because we are restricted by human and organizational limitations (to mention two broad factors). As the Economist points out, March comes up with " colorful metaphors"  in which to package his theories, for instance, the "garbage-can" theory of organizational decision-making, which (once again) emphasizes the chaotic nature  in which problems are tackled and solutions assigned in organizations.  The solutions may not address the problems for which they were designed. And, what was the problem? Sound familiar?  Anybody who has ever worked for a company of any size can relate to that.  His other inventive metaphors include "technology as foolishness" and the "hot-stove effect."

With his full embrace of  organizations as both rule-based and imperfectly adaptive and complex systems, it is no wonder that Professor March finds much inspiration in poetry and in the work of Cervantes.  His most recent book with SUP, Explorations in Organizations, considers theories of organizational action, the ways in which organizations continue to adapt, and the uses of literature in the study of organizations.

Southern California as a Blueprint for Obama's Administration

Smile Southern California, You're the Center of the Universe a recent book by James Flanigan, with its sunny cover and celebration of the prosperity of the region, is at first glance wildly at odds with our current economic recession and California’s enormous budget deficit (somewhere around $16 billion, at the latest estimate). James Srodes, a financial journalist at the Washington times, points out in a recent review that at first it may seem as if this book was only relevant before economic crisis; because in the time it has taken to be written and published, California has suffered the same downfalls as all the other states and in fact currently has the worst budget deficit of all the states. He goes on to say that this is not a negation of the importance of Flanigans work. In fact, the book can act as a  sort of blue print for how a society can rise and prosper within the quickly changing international arena.

"First, there is international trade, which is now a leading contributor to the U.S.  GDP in a world economy swelled by billions of new participants — principally the enormous populations of Asia, Latin America and Eastern Europe. In today's world, however, industries and countries do not merely exchange goods and services but collaborate in producing them. This is a new paradigm and a richer exchange.” (Flanigan)

No matter what criticisms may come to southern California, Flanigan makes clear that the region is a picture of globalization and flourishing trade; not to mention the fact that Southern California has become a modern “Ellis island” in terms of immigration.

"Southern California became the new Ellis Island and reaped economic energy as immigrants started businesses.” (Flanigan)

California has transformed from having a base of government funded science and technology research centers to relying on a knowledge-driven economy supported by the many world-class research universities of California; and the author shows that the research provided by these institutions can pave the way for the new administration in its quest to come out of this economic slump. Flanigan’s research itself certainly warrants national attention, and, as Srodes points out, can be used to “offer a direction that Mr. Obama and his planners would do well to consider — and promptly.”