Dr Nurul Qomariah: July 2008

Nifong was "Intoxicated by the Media"

I attended a panel today at the Southeastern Association of Law Schools on the Duke Lacrosse Controversy. On the panel was KC Johnson, author of Until Proven Innocent: Political Correctness and the Shameful Injustices of the Duke Lacrosse Rape Case who wrote the popular Durham-in-Wonderland blog that played such an important role in reporting the real facts as they came up in the case. I asked Johnson after the panel how he got interested in the rape case and why he blogged about it. His reponse was that the Duke group of 88, the professors who took out an ad that accused the lacrosse players of being guilty without evidence seemed so unfair and the facts of the case didn't add up and he felt compelled to do something about it. And that he did.

The panel as a whole was impressive as James Coleman from Duke, Angela Davis from American University, Michael Gerhardt of the University of North Carolina and Lyrissa Lidsky from the University of Florida were all there to discuss the role of the media, the inappropriate use of power by prosecutor Mike Nifong, and the lessons we can learn from them.

Professor Davis, author of Arbitrary Justice: The Power of the American Prosecutor, pointed out that many poor people, particularly minorities are prosecuted unfairly without any justice, while Johnson pointed out that the Duke lacrosse students were prosecuted because they were seen as privileged and white. Lidsky discussed how the MSM pushed the case into a media frenzy and Professor Gerhardt stated that Nifong was "intoxicated by the media" and opined that the trial should not have been made public but would have been better off tried by a jury. Professor Coleman stated that "one of the most extraordinary things that happened in the case was KC's blog. It was accurate and well-sourced." Overall, the panel was terrific and reminded me that there are many fair-minded professionals out there who believe in justice even when it is not popular. Thank goodness.

"In general, a restraining order is only enforceable against a law-abiding, non-violent man."

Mike McCormick and Glenn Sacks: Restraining Orders Can Be Straitjackets On Justice:

Women�s advocates and the state Attorney General's office are criticizing a new court ruling which will make it harder for women to get restraining orders against their male partners. Star-Ledger columnist Fran Wood, in her recent op-ed �Don't soften protection for women,� called New Jersey�s Domestic Violence Prevention Act �one of the best statutes in the country,� and said the new ruling could �diminish the ability of domestic violence victims to get the protection they need.�

Certainly abused women need protection and support, but there are many troubling aspects of the DVPA�s restraining order provisions that merit judicial and/or legislative redress.

Under the DVPA, it is very easy for a woman to allege domestic violence and get a restraining order (aka �protection order�). New Jersey issues 30,000 restraining orders annually, and men are targeted in 4/5ths of them. The standard is �preponderance of the evidence� (often conceptualized as 51%-49%), and judges almost always side with the accusing plaintiff.

Under the DVPA, the accuser need not even claim actual abuse. Alleged verbal threats of violence are sufficient, even though it�s almost impossible for the accused to provide substantive contradictory evidence.

The restraining order boots the man out of his own home and generally prohibits him from contacting his own children. Men are cut off from their possessions and property, and some end up in homeless shelters.

Update: Vox Day has more on New Jersey's lack of regard for the Constitution when it comes to men and domestic violence.

The Red Queen

�They were running hand in hand, and the Queen went so fast that it was all she could do to keep up with her: and still the Queen kept crying 'Faster! Faster!' but Alice felt she could not go faster, thought she had not breath left to say so. The most curious part of the thing was, that the trees and the other things round them never changed their places at all: however fast they went, they never seemed to pass anything�.

Have you read Lewis Carroll�s �Through the Looking Glass�? If so, you might remember the passage above when Alice meets the Red Queen. They are running and running, but appear to be stationary. Competition among organisations can have the same effect. In order to keep up with competition, firms have to change continuously, in terms of adopting new technologies, launching new products and services, adapting to new business models, etc. Sometimes it can feel like a race, and be quite exhausting.

�Suddenly, just as Alice was getting quite exhausted, they stopped, and she found herself sitting on the ground, breathless and giddy. Alice looked round her in great surprise. 'Why, I do believe we've been under this tree the whole time! Everything's just as it was!'

'Of course it is,' said the Queen, 'what would you have it?' 'Well, in our country,' said Alice, still panting a little, 'you'd generally get to somewhere else � if you ran very fast for a long time, as we've been doing.' 'A slow sort of country!' said the Queen. 'Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!'

Although quite exhausting � if you don�t like running � it does make organisations better. Professor Bill Barnett, from Stanford, studied Red Queen effects among companies at length. He found that those exposed to ongoing competition and change improved considerably and became much stronger firms.

This is due to a �Darwinian effect� and a �learning effect�. First of all, in such a race, the weakest firms go bankrupt, leaving only the strongest competitors. However, it also stimulates firms to learn and adapt quickly. And if you�re learning and adapting, and becoming a more agile competitor as a result of it, it prompts your competitors to do the same (or die). It�s a bit like an arms race� But one that consumers, and society as a whole, benefit from.

Bill documented another, long-term effect though; sometimes everybody is running in the wrong direction. Or at least, someone took a bit of a wrong turn and everybody followed. It is related to this thing we call the success trap; firms have been running in a particular direction only to find out that the world has just changed and some other corner of the market has become more attractive. This triggers the entry of newcomers, while the original leaders struggle to catch up, simply because they had advanced so far into the other corner of the world.

This is nothing new; we�ve seen it in the disk-drive industry, but also among freight companies using sailing ships when steamboat technology was introduced, among retail banks adopting innovative products and technologies, petrol stations evolving into self-service stations, with car-washes and mini-markets, in the steel industry when mini-mills emerged, tyres in the automotive industry changing from bias to radial technology, and so on. The Red Queen is everywhere, and there are few places where you can afford to stand still. And if you want to get into such a race, look for an industry where everybody is running in the same direction; they�re bound to get stuck in a corner some time soon.

The View from My Window

Church Shooting in Knoxville

A man in Knoxville opened fire on a Unitarian Church this morning. Michael Silence at the Knoxville News-Sentinel has the details.

Blogging Sucks: Women, minorities hardest hit.

Going Fishing

I am heading to Florida for a bit and will continue blogging if and when I find things of interest to tell readers about; remember, I wanted this chair so I could blog while traveling to the beach--so blogging might be light or not. In the meantime, let us know if you had a vacation this year, either with friends, family or on your own so we can live vicariously through your good times (or sympathize if they were not so good). Or if you decided not to take a break, why not? Do you dislike free time? Gas prices? Family squabbles? None of these?

College for the Non-PC

The Corner has a post on a book entitled All-American Colleges: Top Schools for Conservatives, Old-Fashioned Liberals, and People of Faith that looks good if you or someone you know is now looking at colleges:

It�s 450 pages of sheer wisdom and sound guidance: All American Colleges tells you the top 50 U.S. institutions providing programs that connect in a special way with the core values of the American founding and the vibrant intellectual traditions of the West � schools and programs that are, in fact, often transformative. If you have a kid or grandkid entering junior or senior year of high school, then you�ve got to get this book.

I wrote about a similar book here that also might be helpful for those who don't want the Indoctrinate U experience.

�Shareholder value orientation� � now, where did that come from?!

Well, it came from the US. And, alright then, a bit from the UK.

For the (blissfully) ignorant among us, what is it? It is the view that the purpose of a public corporation is to maximize the value of the company for shareholders. Traditionally, we find this orientation in Anglo-American societies. The view that the public corporation is more a social institution which has to consider the interests of various stakeholders, including shareholders but also employees, customers, the local community, etc. is the traditional soft stuff found in other parts of Europe and Asia (although, over the last decade or two �shareholder value orientation� has been spreading like a forest fire � pardon the analogy � gaining geographic terrain even in previously unlikely homes such as Germany, France and so on).

Whenever I ask a group of executives or MBA students in my classroom �to whom is the primary responsibility of a company?� nine out of ten people will wholeheartedly shout �shareholders!�, with usually a small, minority contingent on the backburner � with a suspected long-term Marketing indoctrination � arguing that �the company should adopt a customer-focus� and always place customers first (because that�s the best thing to do in order to gain shareholder value I guess�).

But why is that? Why do we immediately assume that the primary beneficiaries of organisations should be shareholders? I even find that quite a few people get a bit annoyed if not angry by even raising that question � like it is some God-given truth, which can�t be opened for debate and is even quite embarrassing to think (let alone talk) about.

Don�t get me wrong, I am not saying that companies shouldn�t do it but surely it is not a �law of nature� or so that a company is ultimately (only) responsible to its shareholders. It�s a choice. And like with many choices in business, that means that it is something worth thinking about every now and then; whether it is really the choice you want to make.

My former colleague (the great) Sumantra Ghoshal � who unfortunately died some years ago � would even argue (if inebriated) that shareholders are not owners at all, at least not of the company. He would argue something like the following (and a posthumous pardon to Sumantra if I remember his argument slightly incorrectly; he would often not be the only inebriated party in the conversation�): He�d say, if you own a dog, and the dog jumps into your neighbour�s house and wrecks the place, you are responsible for all the damage. However, if you own shares in an oil company and one of its oil-tankers shipwrecks and causes a billion dollar in damages to the environment, you�re only responsible for the extent of the monetary value of your shares; that�s the maximum you can lose.

Although Sumantra of course realised the legal reality of the situation, his argument was that therefore a shareholder�s ownership rights are just as limited as his responsibilities. As a shareholder, you�re an investor, which gives you the rights to for instance dividends, but it doesn�t make you the �owner� of the place in our traditional sense of the word.

Moreover, he would continue to argue that as an employee you often give a lot more: your intellectual capital, loyalty, ideas, firm-specific skills and investments, etc. And companies would do well to solicit such �gifts�. And if as an employee you give a lot more (than just money), and a lot more of yourself, perhaps you�re also entitled to more, in terms of the company�s loyalties and priorities.

"Every possible form of interaction between an adult and a child is perceived as yet another opportunity for child abuse."

Frank Furedi, professor of sociology at the University of Kent and author of Paranoid Parenting: Why Ignoring the Experts May Be Best for Your Child has an article at PJM on the paranoia over photographing children:

The assumption that pictures represent a significant threat to children has acquired a fantasy-like grotesque character. We rarely dare ask the question: what possible harm can come from taking pictures of children playing soccer? Dark hints about the threat of evil networks of pedophiles are sufficient to corrode common sense. Tragically, what the dramatization and criminalization of the act of photographing children reveals is a culture that regards virtually every childhood experience from the standpoint of a pedophile.

Every possible form of interaction between an adult and a child is perceived as yet another opportunity for child abuse. In a roundabout way society has normalized pedophilia. The default position is to always expect the worse � and therefore children should be placed in purdah.

Take a look at the comments too, they are illuminating and some commenters explore child abduction numbers; for example, here is an article from Slate that sheds some light on how many kids are really abducted--only 115 were "stereotypical kidnappings," defined in one study as "a nonfamily abduction perpetrated by a slight acquaintance or stranger..."

Cooking the Books on Homelessness Stats: Are there really 3 million Americans wandering the streets?

"What's the Matter With Chicago? and Seattle and New York and Boston...?"

Reason magazine ranks the worst nanny-state cities in America:

From New York to Los Angeles, from the People�s Republic of Cambridge to the west Texas town of El Paso, city governments are using and abusing their authority to tell the rest of us how to live. Two decades of healthy economies and dropping crime rates have given many city councils the luxury of worrying about less urgent issues, from the last wisps of secondhand smoke to the discomfort of fatted geese. So even while self-styled progressives in Seattle, San Francisco, and Boston take a more relaxed approach to sex and pot, they�ve adopted increasingly restrictive laws regarding alcohol, tobacco, and junk food. It may be easier to smoke a joint today than it was 20 years ago (except in New York City�see below), but it�s getting much more difficult to enjoy a legal cigarette.

Is your city on the list?

David Harsanyi: "What Obama Could Learn on Vacation."

Beach Connection

I ran across an article about this hi-tech lounge chair for geeks and was both fascinated and troubled by it:

Holiday makers will soon be able to have all the electronic gadgets and entertainment they need from the comfort of their sun lounger.

Known as 'The Tech Chair', the lounger will have docking stations for cameras, iPods and laptops and harness solar energy to power them.

Designed by PC World, users will now have access to thousands of songs, films, podcasts, games, and photos, as well as Wi-Fi internet connection from the beach or poolside.

It will even allows people to upload their digital holiday snaps onto their laptop before uploading them onto social networking sites such as Facebook or My Space.

A few summers ago, I encountered this Lafuma lounge chair while on vacation and we bought one. I thought this was "high-tech" enough for me but I see I was wrong. I am fascinated because with the geek chair, one could take their work with them while sitting at the beach, particularly bloggers or those who use the internet for business. On the other hand, should people really be this connected to technology 24/7? How healthy is it? Don't people need real vacations to just relax and do nothing or is this too much to expect in our wired world? Is it awful that I want one?

Are overconfident CEOs born or made?

Most acquisitions fail. That�s not even a point of debate or opinion anymore; the evidence from ample, solid academic research is quite overwhelming: about 70% of acquisitions destroy value, and this has been the case for many, many decades.

The question is, of course, what causes acquisitions to fail, and what causes managers to undertake them in spite of their rather dismal track record? Various complementary explanations have been offered but, remember, �failure� here simply means that the acquiring company does not create sufficient extra value out of the acquisition to recoup its (usually rather hefty) acquisition premium. One prominent explanation is that the average CEO suffers from �hubris�, or �overconfidence�. They think they will be able to create more value through the acquired company than these silly people who are currently running the show, because of �synergies� or simply because they�re much better and smarter than the sorry souls who are currently messing about in that block of bricks they call a firm.

Therefore they�re willing to pay an acquisition premium. Yet, it�s apparent that usually they are overestimating their abilities, because the average CEO/acquisition does not create any surplus value - quite the contrary. Fact is (assuming that managers are well-intended and do expect to create value through their acquisitions; some people even disagree with this assumption), on the whole one can only conclude that most of them are overconfident because in 70% of the cases they don�t manage to pull it off.

But where does their overconfidence come from? Does the average CEO suffer from hubris because that�s the type of person that makes it to the corporate top? That�s one possibility. The other one is that, over the course of their tenure, often top managers gradually become overconfident, rather than that they're suffering from hubris from the get-go.

Professors Matthew Billett and Yiming Qian from the University of Iowa examined this exact issue, using a sample of 2,487 American CEOs undertaking a combined 3,795 deals over the period 1980-2002, and they found some very compelling evidence that overconfident CEOs are made and not born that way.

They initially uncovered four things. 1) They discovered that CEOs� first deals, on average, did not destroy value: Their effect on a company�s market value was pretty much zero, 2) those CEOs who had experienced a negative stock market effect in response to their first acquisition usually lost their appetite for doing any more deals, 3) in contrast, those CEOs who � hurrah! � had experienced a positive stock market response to their first take-over got the hots for deal-making; they were very likely to undertake even more acquisitions in the ensuing years, 4) those subsequent deals, however � that is, take-overs by CEOs who had done some before � on average did destroy shareholder value! Hence, the consistent finding in academic research that acquisitions destroy value seems to be caused by CEOs� later deals only. Matthew and Yiming concluded that first-time, successful deals make CEOs overconfident, which not only stimulates them to do even more deals, but also makes them inclined to pay even heftier take-over premiums for subsequent ones, which they usually are unable to recoup after the acquisition.

Finally, they also examined �insider-trading�; whether CEOs would purchase their own company�s stock in the period preceding the acquisition (confident that they would increase in value as a result of the deal). Most CEOs did, whether they were first time deal makers or experienced acquirers. However, the effect for experienced acquirers (people who had done deals before) was twice as big as for the novices. Apparently, overconfident serial acquirers � who mostly ended up destroying shareholder value � most of the time fell into their own hole; they bought the shares whose value they were about to destroy! Guess there�s a hint of justice in this story after all...

Research is Good, Public Policy Change is Better

I have been doing a bit of summer reading and wanted to share a book with you that I thought was a rather fair-minded view of domestic violence. The book Violent Partners: A Breakthrough Plan for Ending the Cycle of Abuse was written by lawyer and social worker, Linda Mills, who holds the controversial view that women can often be as violent as men. In an interview, Mills states:

Over 200 studies of violent relationships have confirmed a pattern: Of relationships that are violent, one quarter of the violent incidents are initiated by women and one-quarter are initiated by men. What may be most surprising, however, is that 50 percent of the cases involve men and women who are inititating violence against each other--there is a back and forth.

The book has a good chapter on the anatomy of intimate abuse with sections such as "Are Women as Violent as Men? and "The Feminist Backlash Against Those Who Speak Up." Mills states that women are more likely to report abuse than men and that men are expected to tolerate hurt feelings, abuse, and even injury, since it supposedly tests their manhood, and they are often taught that they should hide their suffering. Apparently, only 14% of men who have experienced significant incidents of intimate violence even bother to report it vs. women who report such incidents at twice the rate.

Mills points out that homicide statistics report that women are far more frequently killed by intimate partners than men are but another trend suggests that a different pattern is emerging:

The Department of Justice reports that between 1991 and 2000, the number of girls under eighteen convicted of aggravated assault crimes increased 44%, whereas for their male contemporaries, the percentage decreased by 16%. Similarily, crimes involving weapons increased 18% for girls while decreasing 29% for boys. These patterns have also been detected in reports of dating violence.

A study by Murray Straus published in 2008 reveals that approximately 30 percent of college students who are dating in the United States experience a physically violent episode in their relationships. Overall, Straus found that approximately 21% of thse violent incidents were initiated by women, 10 percent by men. As these young women move into adulthood, we may very well detect an increase in intimate violence among married couples.

While it is all well and good to report the research and I am glad that Mill's book sheds some light on the real gender stats, this research needs to translate into policy changes in domestic violence laws such as VAWA and predominant aggressor laws that unfairly target men. For in the coming years, if there is an increase in domestic violence due to women's increased participation, guess which gender will pay a legal price for that domestic violence and guess which will just get away with it more often?

Right Wing News has an interview with author Peter Schweizer on his new book, Makers and Takers: Why conservatives work harder, feel happier, have closer families, take fewer drugs, give more generously, value honesty more, are less materialistic. I haven't read the book yet but it sounds interesting.

Chief Story Teller

What do CEOs really do? Stevie Spring, CEO of Future Plc (the magazine publisher), recently expressed it to me in the following way: �I am not really the Chief Executive; I am the Chief Story Teller�. What (on earth) did she mean with that?

What really is an organisation? Well, it is a group of people � sometimes a rather large group of people � (supposedly) working towards a common goal. This goal may simply be profit, but it certainly helps if we have a common idea of what we�re trying to do in order to make a profit. Hence, it is about setting a clear strategic direction.

A clear strategic direction is not a 40-page document outlining a firm�s strategy � that�s a drawer-filler. It is a concise set of choices that determines what we do and don�t do. For example, for Future it�s something like �special interest, English-language magazines for young males, possibly with spill-overs on-line and in terms of events�. Hence, they would for instance do a magazine on �guitar rock� but not on �music� (as that is not focused enough to be considered a special interest); they would do such a magazine in the US but not in German (then they might license it); they would cover motorcycle racing, or Xbox or wind-surfing, but not knitting (unless, without me realising it, knitting has recently had a popularity surge in the community of 20-something old males). Thus, it determines what you do, but it also determines what you don�t do, because it doesn�t fit your expertise and capabilities.

And Stevie Spring tells that story � over and over again � to a variety of constituents: to analysts and fund managers, board of directors, employees, customers and even the occasional business school professor.

Good CEOs have a story. Tony Cohen of Fremantle Media says they want television productions to which they own the rights, with spin-offs in other areas (e.g. on-line), which are replicable in different countries � simple and focused. Alistair Spalding of Sadler�s Wells theatre wants to be involved actively in producing a broad array of cutting-edge modern dance, aimed at a London audience. Frank Martin of Hornby wants to produce near-perfect scale models of model trains (and Scalextric race tracks) for collectors and hobbyist, which appeal to some feeling of nostalgia. Their stories are clear and simple; employees, investors and customers alike can understand and believe in them.

Is being able to tell a convincing story enough for a good strategy? I guess not � for instance, I remember a Goldman Sachs analyst writing about Enron in October 2001 (weeks before its bankruptcy) �Enron is still the best of the best. We recently spoke with most of top management; our confidence level is high."

However, it certainly helps. When you have a lousy strategy, without much focus or logic to it, it will be hard to come up with a coherent and convincing story. And it�s a good story that makes people want to invest in you, that carries the day when you need your board�s support (e.g. when making tough choices what to divest or invest in), and what helps your employees see their task and decisions in light of the company�s overall direction. It's the strength of the story, which makes the CEO.

"That's the way society is these days..."

Many of you (thanks!) have been emailing a troubling article from the Telegraph entitled "Father prevented from photographing own children at fair." It seems that photographing one's own kids at a public place now makes one a pervert:

Gary Crutchley was taking pictures of his sons Cory, seven, and Miles, five, on an inflatable slide when staff questioned him and told him to stop.

When Mr Crutchely, a father of three and an industrial rubber consultant, insisted he only wanted to photograph his own children, another parent challenged him, saying he could be putting the pictures up on the internet.

Mr Crutchely, 39, of Reedswood, Walsall, sought a second opinion from police at the Wolverhampton City Show, but was told "that's the way society is these days", though they admitted taking the pictures was allowed....

He said: "Another woman joined in and said her child was also on the slide and did not want me taking pictures of the youngster.

"She then said I could be taking pictures of just any child to put on the internet and called me a pervert."

Mrs Crutchely, added: "I was annoyed, extremely upset and embarrassed. I was shocked by the reaction of those women. It is very sad when every man with a camera enjoying a Sunday afternoon out in the park with his children is automatically assumed to be a pervert.

So, guys, remember, if you're out and about on a Sunday afternoon and have a camera in hand, especially in the UK, you may just be labled a pervert. I hate to think what would happen if a lone man actually walked around taking pictures without his own children present. Jail time may be next, if decent people don't stand up against this sort of absurdity.

Rachel Lucas: "Mamas, don�t let your sons watch HGTV. They�ll never get married." Read it, it's hilarious and all too true.

Ask Dr. Helen: Should Single Men be "Bagged and Tagged?"

My PJM column is up:

There are a variety of reasons why some married women might feel threatened by the sight of a happily unattached male.

This column seems like an appropriate follow-up to my recent post on bachelorhood--go read it and tell me what you think (within reason, please):

Evil Genes

Glenn and I met up with Barbara Oakley, author of Evil Genes: Why Rome Fell, Hitler Rose, Enron Failed and My Sister Stole My Mother's Boyfriend, for dinner this evening and had a wonderful time. Oakley was coming through Knoxville as part of her book tour and will be speaking at Carpe Librum book store in Knoxville on Friday, July 18 at 6:30 pm. If you are local and are interested in psychopathy, psychology, or borderline personality from a biological perspective, check out her talk or read the book.

Similar, not the same, but just alike

Sometimes CEOs are just like normal people.

Normal people � you and I (well... at least you) � as we know from ample research in social psychology, have an inclination to conform to certain peer groups, in the way we dress, speak, which music we like, how often we brush our teeth, buy a car or go on a holiday. Yet, on the other hand, we also like to stand out from the crowd (if just a little bit). It�s known as �optimal distinctiveness theory�.

We see the same thing in organisations. Some years ago, I was working with an executive (which will remain blissfully anonymous) in charge of expanding his company into foreign markets, mainly through acquisitions. We analysed his strategy and various market characteristics, through which it became obvious that the Scandinavian market, in his line of business, appeared to be particularly attractive. Yet, he clearly did not even want to think about entering this area. When I persisted in probing why, his answer was frank: �Look, none of my major competitors are active in that market, so there must be something wrong with it�.

I was slightly stunned, but that was the end of it.

Until, a few months later, I ran into him again. Having asked what he had been up to he answered, �I�ve just entered the Scandinavian market�. Upbeat, I asked him whether my advice had finally convinced him. His reply was, �not exactly� it is just that [my biggest competitor] has just entered the Scandinavian market, so it must be a good place after all�.

I am not making this up, or even exaggerating (for a change). Was he unusual in this behaviour? I think he was unusual in terms of the frankness of his admission, but not so much in terms of his behaviour. One of the biggest influences on strategic decision-making � if not the biggest influence � is imitation. We do what others do around us. Academic research has indicated over-and-over-again the prevalent nature of imitation among a wide array of management decisions, such as the adoption of conglomerates, choice of location when entering foreign markets, implementation of performance management programmes (such as ISO9000 or Six Sigma), product market entry, matrix organisations, and so on and so forth.

Yet, like individuals in everyday life, CEOs don�t like just doing what everybody else is doing; sometimes they just want to do something a bit different. For example, I recently analysed a large database of about 800 companies in the pharmaceutical industry, focusing on the breadth of their product portfolio, and the statistical results clearly indicated that companies sometimes also choose to do the exact opposite of what their peers are doing, merely for the sake of doing something else.

Similarly, some time ago, I was working with some executives of a British newspaper company, who faced the decision whether or not to also adopt the new small-size paper format, just like several of their peers/competitors had. Ultimately, they decided against it. One of the executives said �had we been the first one to come up with the idea, we would have done it, but now that others have done it before us, we can�t; it just wouldn�t be very original�.

And in a way, I like this attitude. Granted, when you simply do the opposite of what others are doing, or explicitly do not want to do it just because your peers did it, you�re as much influenced by peer behaviour as when you�re an imitator (only 180 degrees opposite). Yet it also brings a bit more variety to the world, and hence makes life a bit more interesting. It gives you the opportunity, as a firm, to not be average and stand out from the crowd. And, who knows, perhaps even make an above-average profit as a result of it.

Bachelors: Menace to Society or its Salvation?

Reader Mike emails this interesting article from New English Review entitled, "Bachelorhood And Its Discontents." This piece is definitely worth reading as it analyzes past and present thoughts on the state of bachelorhood. Some naysayers think that bachelors are a menace to society:

Essayist George Gilder thinks so. "The single man in general, compared to others in the population, is poor and neurotic," writes Gilder in his book Naked Nomads: Unmarried Men in America. "He is disposed to criminality, drugs, and violence. He is irresponsible about his debts, alcoholic, accident prone, and venerally diseased. Unless he can marry, he is often destined to a Hobbsean life--solitary, nasty, brutish and short."

But others indicate that single men might just be society's salvation:

�Certainly the best works, and of greatest merit for the public, have proceeded from the unmarried or childless men,� wrote Sir Francis Bacon (not a bachelor, but perhaps wishing he were).

Or perhaps bachelors have the time to discover things that married men can't:

Some years ago a noted Japanese researcher analyzed the biographical data of some 280famous mathematicians, physicists, chemists, and biologists and discovered that all peaked professionally in their twenties, at which point their careers spiraled downward. Married scientists suffered the worst decline in productivity. However, those who never married remained highly productive well into their fifties. "Scientists tend to 'desist' from scientific research upon marriage,� the researcher told an interviewer, �just like criminals desist from crime upon marriage." One theory suggests married men lack an evolutionary reason to continue working hard (i.e., to attract females). Though it likely they similarly lack the prerequisite time and solitude.

My guess it that a certain amount of bachelorhood is good for society, too much, maybe is not so good, depending on why men do not want to get married. If it is because men enjoy a solitary lifestyle, are more creative or wish to stay single for positive reasons, perhaps it is good. But if the reasons are that marriage is not a fair and egalitarian situation for men and has fewer rewards than in the past, then perhaps bachelorhood is chosen out of discontent for the institution of marriage and the way that married men are treated, rather than discontent with married life per se. This type of discontent may not be good for society, the former, may be fine.

Mike McNally has a good column up over at PJM on teaching human rights to toddlers: "The UN wants three-year-olds to learn about multiculturalism. How about learning right and wrong first? Or maybe just fingerpainting?"

Okay, this is a weird way to go:

A Russian woman in St. Petersburg killed her drunk husband with a folding couch, Russian media reported on Wednesday.

St. Petersburg's Channel Five said the man's wife, upset with her husband for being drunk and refusing to get up, kicked a handle after an argument, activating a mechanism that folds the couch up against a wall.....

The woman then walked out of the room and returned three hours later to check on what she thought was an unusually quiet sleeping husband.

So, the lesson here seems to be if someone is drunk, don't just fold them up in a couch and leave. Seems like it should have been obvious though.

Parenting Advice

MSN actually has a decent article on child rearing entitled "10 Big Mistakes Parents Make." Spoiling kids and inadequate discipline make the list as does not teaching kids to fend for themselves and making the mistake of not being a good spouse. Good advice.

Gardening for the Self-Sufficient

If you have been reading this blog lately, you will know that I have been growing tomatoes and strawberries in this EarthBox. I am proud to say that I now have a number of delicious tomatoes that I have been sharing with family members and have also been eating daily myself. I have gained a terrific sense of accomplishment from growing my own vegetables and fruit on a small scale. However, I decided to go beyond the basics and am reading a helpful book by Steve Solomon entitled, Gardening When It Counts: Growing Food in Hard Times.

Solomon is a gardening guru who has written eight books and is the founder of a seed company. His current book teaches those with access to 3-5000 square feet of garden land how to halve their food costs in most climates using just a bucket of household waste water, a few hand tools, and a few hundred dollars per year spent on supplies and seeds. One needs a bit of time to do this during the peak growing season--around two hours per day--but if one is around the house anyway, it would be time well spent.

Solomon is not a big fan of garden centers--frankly, I'm not either, some seem overpriced and the one near me has little help and the staff hides in the back or seems annoyed if you ask questions. Solomon explains to readers to beware of vegetable transplants and explains how to find healthy ones. He also describes how to grow your own seedlings and goes on to tell how to find quality seeds to plant. While I am not so dedicated to gardening and don't know if I will ever be, Solomon decribes his passion as follows:

...for me, gardening has never been a minor affair. It is life itself. It is independence. It is health for my family. And for people going through hard times, a thriving veggie garden can be the difference between painful poverty and a much more pleasant existence.

The book talks about the decline of cheap oil and the threat of hard times to come which may play a factor in prompting people to grow more food themselves. I don't know if I will get to the point that I will need to grow food to live (I sure hope not!) but I think it is important to be well-rounded and be able to grow a few things myself without relying solely on the grocery store or other means for food 100% of the time. If you feel the same way, you might enjoy Solomon's book.

Analysts, astrologers and lemmings � three of a kind?

�Financial forecasting appears to be a science that makes astrology respectable�, Burton Malkiel, professor of economics at Princeton, once said.

As you know, analysts, employed by investment banks, follow a number of firms (usually in a particular industry), evaluate them and offer us recommendations � in terms of �buy�, �sell� or �hold� � whether we should invest in their shares.

However, on average, these analysts give the advice �sell� in less than 5 percent of the cases. Yet, clearly, more than 5 percent of listed companies� share prices go down. So what�s going on?

Well, there are various explanations but one is that, for various reasons (pertaining to incentives in investment banks), analysts are inclined to cover firms that they expect will go up in terms of share price. Therefore, perhaps an even more important decision than whether to recommend �buy, sell or hold� is the decision which firms to cover.

And this is where it gets tricky (and almost a self-fulfilling prophecy). Research has shown that the stock price of firms goes up when they gain analyst coverage. That is, purely the fact that a research department (employing the analyst) decides to start covering the firm will increase its share price, probably simply because the firm becomes more well-known, is exposed to additional investors, which enables it to raise capital more easily, etc.

But how do research departments decide to start covering a firm? Well, research by professors Huggy Rao, Henrich Greve and Jerry Davis shows that this is very much influenced by imitation. They analysed 1442 firms listed on the NASDAQ stock market and the analysts covering them and, through elaborate statistical analysis, showed strong evidence that when one analyst starts covering a firm, his colleagues at other investment banks are inclined to start doing the same (irrespective of this firm�s performance), thus creating a �cascade� of analyst coverage.

However, Huggy and his colleagues showed something else. Their models� findings also revealed that, in such cascades, the imitating analysts were prone � more than usual � to overestimate the firm�s future performance. And this made it very much a mixed blessing for the firm. Because analysts are inclined to cease coverage of companies which are underperforming in comparison with their predictions � which was very likely in this case, given the analysts� over-optimism � firms that initially benefited from increased analyst coverage were the same ones that subsequently were likely to suffer from analysts abandoning them.

The analysts, much like lemmings, optimistically jumped in, only to find out that the place they landed in wasn�t as rosy as they had expected. This prompts them to jump out again, saving their skin, but leaving the firm trampled and bruised.

Do Schools Overdiagnose Kids because of Financial Incentives?

Jay P. Greene, author of the excellent book, Education Myths: What Special Interest Groups Want You to Believe About Our Schools--And Why It Isn't So has a column along with Greg Forster at Pajamas Media entitled "Yes, Virginia, There Is a Special Ed Bounty." It's an interesting piece pointing out that schools have a financial incentive to diagnose students as "disabled" and then not serve them.

Take a look if this is a topic that interests you.

It's about Time

Good news from the New York Times: "The �60s Begin to Fade as Liberal Professors Retire" (via Ann Althouse):

Baby boomers, hired in large numbers during a huge expansion in higher education that continued into the �70s, are being replaced by younger professors who many of the nearly 50 academics interviewed by The New York Times believe are different from their predecessors � less ideologically polarized and more politically moderate.

Here's hoping Indoctrinate U will be a thing of the past.

The Jewish/Israeli Carnival is up at Daled Amos.

Surviving and Thriving after a Crisis

Have you suffered from an unbearable situation such as an illness, the loss of a loved one, or some other tragedy that leaves you wondering how you'll get past it, if ever? If so, you might be interested in a new book that I am reading called I Will Not Be Broken: Five Steps to Overcoming a Life Crisis. The author, Jerry White, stepped on a landmine during a camping trip to Israel when he was twenty years old. The accident resulted in losing part of his leg and he had to wear a prosthesis but learned to be happy despite the horror of the minefield. The book is his story interwoven with other tales of misfortune in the search for answers as to why some people become crippled from their experiences and others survive and thrive. Lest you think the book is a downer (okay, it is a bit), there are many positive messages in the pages and clear, concise solutions are given to the reader who may not know where else to turn.

So what are the five steps to overcoming a crisis according to the author? White states they are to face facts, choose life, reach out, get moving and give back. He states he learned these steps after thinking a lot about what happened to him and how he got through it. He interviewed other survivors who had thrived (and those who didn't) and came to the conclusion that these steps were the way to survive the bad things that happen to us, often without warning. The chapters outline what each of the steps entails and how to improve one's life.

So, if you are going through, or have been through a recent life crisis and wonder how to cope, this book might be of some value to you. If anyone else has a good self-help book recommendation for those who are dealing with illness, a crisis or trauma, let us know.

Inebriated cyclists

Remember the old anecdote of the man looking for his keys under a lamp-post? Here�s my version:

A guy exits a pub in the middle of the night. There, he sees a man on his arms and knees under a lamp-post, clearly looking for something. He asks him �what are you looking for?� and the (slightly inebriated) man answers �the keys to my bicycle; I must have lost them�.

�I will help you look� says the guy, and on his hands and knees he starts to search too. After a good ten minutes have passed though, still not having found the keys, he turns to the inebriated cyclist and says �are you sure you have lost them here, we�ve looked all over and they�re nowhere to be found?!�

�No� says the man (pointing towards a dark spot to the side of the road), �I lost them over there, but there it is so dark, I would never be able to find them�.

The morale of this well-known story is that we often look for solutions where there is light and we can see stuff, while the real cause of the problem lies in an area which is much more difficult to fathom.

Managers are often inebriated cyclists. If a company or division is in financial trouble, they cut costs, slash head-count, disinvest, set stricter targets and so on; the stuff that can be captured in numbers (i.e. �where it is light�), while the real cause of the problem will often be a lot more subtle, and lie in a tainted reputation, low employee morale or low service quality. And looking hard where there�s light won�t make you discover the key to solving your problems any quicker.

Vice versa, the hard stuff (which can be captured in numbers), such as production capacity, headcount, etc., are exactly the things that cannot give you much of a competitive advantage; they often can be bought off the shelf, meaning that your competitor can get it to. It�s usually the soft stuff, such as morale, reputation, organisational culture, etc. (which we don�t spend much time measuring, largely because they�re difficult to observe and capture in numbers) that can make all the difference, because they can�t be bought and take much time and effort to develop.

Hence, don�t be misled by the hard stuff, which you can measure; of course you need it but it will seldom give you a competitive advantage or get you out of trouble. The soft things, which we cannot see and measure, are the ones that you have to carefully nurture and manage.

Happy 4th!

Do you remember being a kid and shooting off all kinds of fireworks? The 4th was always one of my favorite holidays and my parents would get us smoke bombs, firecrackers and other fireworks that we would play with for days. This all kind of stopped abruptly once when my brother blew his finger tips off after putting together some kind of firecracker concoction and it exploded in his hand. So, have fun but be careful. Or do parents let kids play with fireworks anymore?

Pool Mystery

Maggie's Farm: "These people were always finding water all over their pool deck and furniture every time they came home after being away for a few hours. They thought the neighborhood kids were waiting for them to leave, and using the pool. However, they could never catch them doing it. So, they set up their video cam and left. This is what they found out:...."

Bernard Chapin at PJM takes a look at why men need to be saved from the New York Times and how Kathleen Parker's book, Save the Males: Why Men Matter Why Women Should Care can help.

Complex yet so simple. Or was it the other way around�?

As a junior professor, starting to teach strategy at the London Business School, one of the first cases I ever discussed was that of a hotel chain in the south of the US, called La Quinta. It was a great example, not only because it came with a video featuring the famous Harvard Business School professor Michael Porter (who was goofy enough to make me look normal), but because it illustrated a particular point well: That, over time, successful organisations become both more complex and more simple.

What the heck did I mean with that (my students tended to ask)?! Well, over time, successful firms fine-tune their organisations to do even better what they already do well. They learn to operate through a particular set of procedures, gradually develop and employ a very appropriate yet intricate incentive system, organise a few specialist departments or functions focused on some specifically thorny issues, and grow a culture which is highly suited for the task at hand. And, as a result, they become quite a subtle and �complex� organisation.

Yet, such an organisation usually is also quite simple. What did I mean with that � complex AND simple�?!

Well, such an organisation becomes extremely suited for the thing it does, but suited for that one thing only. Hence, it�s a complex organisation, but �simple� in terms of what it can do.

For example, at the time, La Quinta hotels tailored to traveling sales people. People who are on the road all the time, work on commission, and often receive a travel budget (which they can spend or pocket). La Quinta targeted those customers (and those customers only). They located themselves literally on the highway, often next to a large parking lot. They did not operate any restaurant or offered any form of room-service but that was fine; opposite the parking lot would always be a diner, McDonalds or Pizzahut, and the salespeople would be happy to use those.

They did have spacious and very quiet rooms, which were standardised across all La Quintas, among others to give the salespeople a familiar feel away from home. And, above all, they offered low prices. It was perfect for the sales people, and every aspect of a La Quinta fell perfectly in line with the sales people�s needs. In this sense, La Quinta�s entire organisation was very subtle and �complex�.

But that would also make it simple. It could only do one thing, and target only one type of customer: the sales people. As soon as something would happen that kept away the sales people � a recession, a large business center in the vicinity moving away, etc. � the hotel would be vulnerable. It could not switch to high-end executives; after all, it didn�t have a restaurant, room service or business center. But it could also not switch to tourists; they were located on a highway for Pete�s sake, at a parking lot across from a diner! Let alone that they operated a family pool.

That�s the danger of being both complex and simple. You learn to do one thing very well; but one thing only� And when the world changes on you � which it usually does � that might get you into trouble.

Krav Maga

I have always wanted to learn the Israeli self-defense system Krav Maga and finally got around to taking my first training lesson today. If you are not familiar with this technique, you are not alone--although it is becoming more common in the United States. "Krav Maga" is the Hebrew name for "contact fight." It was originally developed for the Israel Defense Forces (IDF) and various branches of the security services by its creator, Grandmaster Imi Sde-Or, and was later adapted for civilians.

According to the book I bought after my lesson entitled Krav Maga: How to Defend Yourself Against Armed Assault, all Krav Maga techniques have been thoroughly tested in real-life situations. This sounded good to me. I listened to my instructor as he took me through a number of drills on various jabs, punches, and holds. I took Taekwondo years ago when living in New York and many of the movements came fairly naturally to me--but some did not and I realized that I would need a lot more practice.

What are the guiding principals of Krav Maga? From the book I mentioned above, they are:

Avoid injury! Carefully calculate the risks involved in a specific action, and avoid danger whenever possible; the Krav Maga techniques were developed as an extension of the body's natural reflexes; defend and counterattack in the shortest and most direct way possible, from any starting position, taking into consideration the safety and convenience of your action. Respond correctly, strike accordingly at any vulnerable point, use any tool or object available nearby for your defense and counterattack, there are no rules, technical limitations or sportsmanship restrictions, and finally, the underlying principal in training: advancing from closed skill to open skill (incorporating "mental training"), and from a single , specifically defined technique to improvised action in accordance with the dynamics of the situation.

Uh, okay, I guess once I have all of the above mastered, I will be on my way. It might take a while but I look forward to my next lesson!