TIMnovate

Are YOU for Sale?  Living in a Price-Tag Society

By Shlomo Maital

 The Price-Tag Society

  Are YOU for sale?  NO?  Are you sure?  There is a terrible joke about a well-heeled man who offers $10k to a classy blonde for the right to spend a night with her.  When she refuses, he tells her, well, now we know what you are, it’s just a matter of negotiating the price.    More and more, our society is behaving like that man.  Everything has a price.

    Writing in The Atlantic (April 2012),*  philosopher Michael J. Sandel offers these examples of a price-tag society:  You can buy the services of an Indian surrogate mother for $8,000 (1/3 the going rate in America).  You can emigrate to America for $500,000 (that gets you a green card).  You can sell space on your forehead to display commercial advertising (a single mom in Utah was paid $10k by an online casino to install a permanent tatoo of the casino’s Web address on her forehead).  You can be a human guinea pig in a clinical trial, for $7,500.  You can fight in Somalia or Afghanistan (for a private contractor) for $1,000 a day.  If you’re a second-grader, you can earn $2 for reading a book. 

   “We live in a time where everything can be bought and sold.  Over the past three decades,”,  notes Sandel, “markets – and market values – have come to govern our lives as never before. We did not arrive at this condition through any deliberate choice. It is almost as if it came upon us.” 

   The problem with the price-tag society –one of many problems – is that it is grossly unfair.  Those who have money can buy anything, including privileges. Those who lack it cannot buy anything, because everything costs money.   Even democracy has a price. Lobbyists in America pay line-standing companies, who pay homeless and others $15-$20/hr. to stand in line to hold a place for a lobbyist who wants to attend a Congressional hearing.   Conservatives say this is great for the homeless and the unemployed.  Others think it is less than great, when money buys even the chance to hear (and influence) Congressional discussions. 

    Oscar Wilde once said that a cynic is someone who knows the price of everything, and the value of nothing. I have used this definition often, to define “economist”.  Have we economists created a society, where everything has a price, and NOTHING at all has a true value?  Because some things are so intrinsically valuable, they should never ever have a price tag, subject to the laws of supply and demand, rather than the laws of fairness, ethics, and justice.   Not everything needs a market.   There is a limit to the realms of our lives where economics rules.  It’s time to define those limits.  Economists, get out of the way. 

• What Isn’t For Sale?  By Michael J. Sandel. 

 Innovation/Global Risk

Oreo Cookies: Happy 100^th Birthday – What’s Their Secret?

By Shlomo Maital  

   We almost missed it.  Oreo cookies are 100 years old.  In 1912 Nabisco developed the Oreo at its Chelsea factory in New York City.  It was actually launched as an imitation of Hydrox cookies, made by the Sunshine company.  Nabisco’s superior marketing and advertising eventually led to Hydrox’s demise.  The Oreo cookie is simply a sandwich — two chocolate wafers with a crème filling. 

   Nobody knows the origin of the Oreo name.  Wierdly, Oreo cookies became the best-selling cookie in China, in 2006, after Kraft foods made the cookies far less sweet (Asian palates are far less fond of sweets than American palates) and sold them in small packages to reduce the cost of a package. 

    Oreos have a high-tech link.  Lou Gerstner, who became CEO of IBM in (I believe) 1993,  rescued the crumbling IBM, because he knew how cookies crumble – he had been CEO and Chair of Nabisco.  His marketing skills came in handy for the super-nerdy IBM. 

    Nabisco has of course proliferated Oreo varieties (I counted about 30), with different sizes, shapes, fillings, etc. – all to capture supermarket shelf space. But the original Oreos is still the most popular.

    The big mystery is,  what is the secret of Oreos?  Why has it had such a long and successful life?  Is Nabisco just really good at maintaining a legacy cash-cow product?  Does the cookie simply taste good?  Does it combine taste with ‘fun’ (remember how as a kid, you separated the wafers and licked the cream, deliciously circumventing parental restrictions on candy?)   Does Oreos benefit from nostalgia, as parents enjoy buying Oreos for their kids, because they themselves loved Oreos when they were kids?

 Innovation/Global Risk

Before You Die: Tell Your Fans Why You Did It

By Shlomo Maital  

Ding Yu Interviewing Death Row Man

This is the ultimate reality show. In China, a program with 40 m. viewers interviews Death Row inmates, sometimes just minutes before they die.   The interviewer, wearing silk scarves, perfect hairdo and immaculately dressed, contrasts sharply with the distraught interviewees. Her name is Ding Yu. Many of the prisoners confess their crimes and beg forgiveness from family and friends, before they are executed.   A documentary has been made, Interviews Before Execution, which will be viewed worldwide on BBC2. 

  The interviewed prisoners sit in leg irons, with a prison warden attending.  Ding Yu starts with some trivia (favorite foods, colors) but then cuts to the chase, asking about motives, crimes, feelings, fears.  Her goal seems to be to wring apologies from the distraught prisoners. 

  Her program has run now for five years, and has a prime-time Saturday night slot on national TV.

   Ms Ding has covered more than 250 cases in Interviews Before Execution. She told a child killer: ‘Everyone should hate you.’ Her interviewees also included a jealous divorcé who stabbed his ex-wife in front of her parents.  The shocking and macabre interviews have made Ding Yu, a household name across China.  In one scene, a prisoner in his 20s falls to his knees before his parents, who have been allowed to see him. He pleads: ‘Father, I was wrong. I’m sorry.’  Moments later, his parents see him about to be led away to his death. His distraught mother apologizes for beating him once as a child and implores her son: ‘Go peacefully. It’s following government’s orders.’   Prison officers then push her aside and drag him away.   In another scene, a firing squad of about 20 men is briefed by a senior officer before executing condemned prisoners. ‘Some criminals will be very tough and difficult. That means they’ll be dangerous,’ the officer tells them.

    The death penalty is wildly popular in China.  The Chinese believe strongly that for some 55 different crimes, death is deserved. 

 Innovation/Global Risk

Sarah Blakely Hated How Her Butt Looks – and Made a Billion!

By Shlomo Maital

 On Feb. 21, Sarah Blakely celebrated her 41^st birthday.  Who is Sarah Blakely?  She is the youngest woman (an American) to reach Forbes’ “billionaire”  list, self-made, on her own, without husband or family wealth.   She is 416^th on the Forbes billionaire list. 

   How did she do it?  One of the 10 key brain ‘exercises’ in my draft manuscript Build Your Creativity Muscles is #9, “It’s ALWAYS Personal”.  Sarah proves  this.  Here is her story.

   She was working as a sales trainer by day, and stand-up comedian by night.  She knew zero about pantyhose (except, she hated them), and had never taken a business class.  “I had only one source to operate from…my gut”, she says. 

   She hated the way her fanny looked, wearing regular panties. She decided to do something about it, because she was sure many other women felt the same way.  She developed a fanny-scrunching panty using Spandex, wrote the patent herself and it was approved. Then she trademarked the name SPANX.   For months she drove around North Carolina begging mill owners to manufacture her product.  Finally, after many rejections, she found a mill owner who agreed.  Why?  He said, he had two daughters.  It took a year to perfect the prototype, because Sarah was obsessed that her Spanx should be comfortable. (After all – she would wear them herself).    She chose the Spanx name carefully, and it proved to be a winner. (“It’s edgy, fun, catchy, and makes your mind wander,” she says, “and it’s all about making women’s butts better, so why not?”

    She took a bold new approach to packaging – if your product is innovative, its package has to look it – and chose a bold red package with three women on the front.  She called the buyer at Neiman Marcus, a top-of-the-line department store chain.  She agreed to give Sarah 10 minutes.  Together, they went to the ladies’ room, and Sarah showed the buyer her butt, in her cream pants, before Spanx..and after!  Three weeks later Spanx was on the shelves of Neiman Marcus.   She did the same with Saks, Nordstrom, Bloomingdales and others. She asked her friends to go to the stores and make a huge fuss over her product.

    She had no money to advertise, so she hit the road.  She did in-store rallies about Spanx with the sales associates, then stayed all day introducing customers to Spanx.   And she got help from media women; her product was on the Oprah Winfrey show, for instance, and on Tyra Banks’ Show.   To get free publicity for Spanx, she even joined Richard Branson’s reality show The Rebel Billionaire, leaving her business for three months to do daring tasks all over the world.

    Sarah has now launched a foundation, to empower women all over the world. She summarizes:  “My energy and inspiration comes from inventing and enhancing products that promote comfort and confidence for women. Customer feedback is one of the key drivers of our business. “

   How many millions of women looked in the mirror, turned around, and did not like what they saw below the waist? One bold woman did something about it.  And she’s a billionaire.  Annual revenues are $250 m. and her net margin is estimated at 20 per cent.

  And she started with the huge sum of $5,000 in personal savings.

   Good work, Sarah!  It really is all personal. 

 Innovation/Global Risk

Plants Talk To One Another.  Are We Listening?

By Shlomo Maital

“Talking plants? You gotta be kidding!”

  A team of scientists at Israel’s Ben-Gurion University has discovered that plants can talk to one another.  An injured plant “communicates” to a healthy one, through its roots, and the healthy plants in turn relay the signals to neighboring plants, perhaps helping them to deal with stress in the future. 

  The research was published in PLoS (Public Library of Science One).  The researchers were headed by plant biologist Ariel Novoplansky.  In his experiment, he exposed five garden pea plants to drought conditions.  The stressed plant closed its leaves to prevent water loss.  Meanwhile, “its roots released signals that caused neighboring plants, not exposed to drought, to react as if they had been!  The title of the study was “Rumor Has It —  Relay Communication of Stress Cuts in Plants”.   

   According to the authors, “the results demonstrate the ability of plants and other ‘simple’ organisms to learn, remember and respond to environmental challenges in ways so far known in complex creatures with a central nervous system”, Novoplansky told Haaretz daily newspaper. 

  Apparently we’ve known about his phenomenon for years.  A paper published in Science in 1983, by Jack Schultz and Ian Baldwin, concluded that injured poplar and maple trees release ‘chemical signals that are picked up by healthy neighboring trees’, which then activate defense mechanisms as if they themselves were hurt. This study was ridiculed at the time, and called the ‘talking tree’ notion. It has since been vindicated.

  The amazing part of this research is that human beings have ‘mirror neurons’ in their brains, that enable us to feel ‘empathy’ – to feel what people near us are feeling, like pain, embarrassment, joy, etc.  Perhaps plants do too…through chemical emissions. Apparently evolution discovered that such plant ‘empathy’ helps plants survive to reproduce..and thus, ‘plant talk’ perpetuated itself. 

  I wonder if we should issue a blanket apology to all those who hug trees, and who talk to their plants.  And I wonder what trees and plants would say to humans, if they could speak to us?   Something like: “Listen humans, if you keep asphalting open land and cutting down forests, pretty soon, there won’t be any plants OR humans left.  Wise up!”  

 Innovation/Global Risk

One Small Tear….

By Shlomo Maital

  In a famous experiment that won it a Pulitzer Prize, the Washington Post sent world-famous concert violinist Joshua Bell to play in the Metro subway stations.   Very few people paid him any attention.  Basically they neither heard nor saw what others paid hundreds of dollars to hear in a concert hall.  The reason: Habit. We assume that a street musician cannot be worth stopping and listening to. 

   The experiment was attempted here in Israel, by a local Channel, using a cellist with 24 years’ seniority playing for the Israeli Philharmonic —  one of the world’s great orchestras, directed by Zubin Mehta.  The cellist set up in a shopping mall, in a poorer district, and in the lobby of a Tel Aviv theatre, Kameri.  He played familiar melodies with stunning vibrato. 

    Results?  He raised NIS 70 (about $20).  Most people ignored him. He got twice as much money in the poorer district as in the rich shopping mall.  And at the Kameri Theatre, where presumably highly-cultured knowledgeable people flock, hundreds walked right by the cellist without even glancing at him.

    There was one exception, in the poor neighborhood.  The TV interviewer spoke with a woman, who stopped to listen, and wiped a tear from her eye.  Why are you crying? asked the journalist.  “Such a wonderful musician!” she said. “Such beautiful music!  And…he has to play on the street.  It’s so sad!”   

    One tear. 

    I think we should shed a tear, for the singularity and tragedy that only one tear was shed.   Do YOU walk by street musicians, without popping a coin into his hat? (I know someone who has transformed himself, and as part of the transformation, puts coins into EVERY street musician he passes).   Do you wonder why they ARE street musicians?  Do you walk by, without caring, when you see pain, suffering, homelessness?  And why has modern life made us so damned uncaring?    

 Innovation/Global Risk

Good Listening: 3 Ways to Improve The Key to Innovation

By Shlomo Maital

One of the most amazing human organs is the ear.  Its combination of ear drum, tiny hairs, auditory nerves and of course the brain to interpret the signals it receives, are taken for granted, yet the complex system that enables us to hear is insufficiently valued – except when it breaks down. 

   We are equipped to hear.  But — do we really listen? Writing in the latest issue of McKinsey Quarterly, former McKinsey consultant Bernard T. Ferrari (now an independent consultant) notes that senior executives often are very poor listeners.  They become preoccupied with speaking, what they are going to say, and do not truly listen to those around them. And as a result, they lose invaluable information, that could help them strategize and innovate.  In a debate, they often formulate their own ‘speeches’ rather than listen to what those around them are saying. 

   Here are three things we can do, according to Ferrari, if we want to become ‘Ferrari’ quality listeners, instead of  Yugo listeners where only the “outgoing” button works. 

   1.  Show respect.   If you respect your workers and subordinates, they will respect you, and often do-or-die for you.  How do you show respect? By eliciting their opinions, sincerely, and really truly listening to them.  Often the solutions to sticky problems lie far down the organization, at the “coal face”.  But these solutions never reach the decision-makers..because they never bother to go to the ‘coal face’ or listen to the ‘miners’ when they do. 

  2.  Keep quiet.  Here is another of those 80/20 rule.  Listen 80% of the time.  Speak no more than 20% of the time.  And when you speak,  do it by formulating good questions, rather than deliver proclamations. 

  3.  Challenge assumptions.  “Good listeners seek to understand – and to challenge – the assumptions that lie below the surface of every conversation.”   Ferrari uses legendary baseball manager Earl Weaver (Baltimore Orioles) as an example. Weaver’s autobiography is titled “It’s What You Learn After You Know It All That Counts”.  To do this, to learn after you know it all, requires you to challenge the assumptions of those to whom you listen, but above all, to challenge your own sacred-cow assumptions as well. 

    I would add a fourth idea.  4. Don’t fill in pauses.  When there is a pause in the conversation, don’t be embarrassed and rush to fill it in with idle conversation.  Let the silence live.  Let your conversant speak.  You may end up finding out what people should have told you, but forgot or didn’t have the space in which to say it.  And by the way – ask them!  Ask people if there is anything you should know they haven’t yet told you.  That communicates the message, that you expect people to give you all the information you need, without gaps. 

* McKinsey Quarterly. “The executive’s guide to better learning”.  B. T. Ferrari.  Feb 2012.

 Innovation/Global Risk

Machine Guns Vegas: Now THAT’S a Sure-Fire Innovation!

By Shlomo Maital

Las Vegas is an ideal place to look for new over-the-top super-excess ways to amuse people with money to waste.  Hotels recreate the Eiffel Tower, the Pyramids, almost anything, at huge expense. 

    But now comes the latest sure-fire Vegas innovation:  MGV.  Machine Guns Vegas. It’s an indoor upscale shooting range with two key features:  skimpily-dressed gun-toting hostesses, and a wide range of vintage weapons, including Uzi’s and Thompson machine guns. *    If you’re tired of baccarat, why not drop in and fire off a few thousand rounds?   Pretend the target is someone you really dislike.

        The Thompson machine gun was invented in 1919 by John Thompson, and became infamous during the Prohibition era in the U.S., when it was used by law enforcers and criminals alike.  It got the affectionate nickname, Tommy Gun.  The Uzi is a submachine gun designed by Major Uziel Gal in the 1940’s and is still wildly popular among submachine gun aficionados. 

     The pricing model?  For $699, the top of the line package, a client gets to fire an array of 16 weapons, 1,550 rounds of ammunition and a pass to the VIP lounge. For the Full auto package, you get 10 machine guns, for $399. 

    “We did the fully automatic,” says 61-year-old Wilbur Willis, a printer from Tennessee.  “It was awesome: some older guns, some newer guns.” 

   This business innovation has huge possibilities. It could quickly be franchised, to Kabul, Afghanistan, and Ramadi, Iraq. In fact, Syrian President Assad has already optioned MGV, with a wrinkle: He uses real live women and children for his targets. 

     There is one place in the world where MGV will never fly.  Israel.  Here, where young men and women learn to fire weapons as part of their compulsory military service, somehow submachine guns lose their allure when you have to sleep with them, and smell the gun oil, for three years or more. 

* “In Las Vegas a nice place to fire an Uzi and relax with a cappuchino”.  Global NYT March 7 2012.

 Innovation/Global Risk

America: Failed Welfare State #2

By Shlomo Maital  

   Pay for this…

 …and get this!

Would you say that a nation that spent $8,000 per person on health care (double that of Canada, or France) would qualify for the title “welfare state”?

   That state is America.  And according to Ezra Klein, writing in The Washington Post, the reason is simple.  Prices.   Health care costs in America are double those elsewhere.

   Spending (on anything) is defined as price times quantity, P Q .  When spending is high, there are only two reasons. Either Q (quantity of health care) is very high, or P (price of a unit of health care) is very high.  For America, it is clearly the latter, P.  Klein cites a study showing that for the prices of 23 medical services and products, Americans pay a higher price than elsewhere.  America, in health care, is paying Maserati prices for VW returns. 

   Why?

   In Canada and Britain, health care prices are set by the government.  In Germany and Japan, they’re set by providers and insurers, with government mediation. In America?  It’s a free-for-all. Providers can charge what they can get away with. 

    Klein notes that two of the five most profitable industries in America are pharmaceuticals and medical devices, with margins of about 20 per cent.  They beat out even the financial services sector for profitability. 

   So, yes, America is a welfare state, because it spends fortunes on the health of its citizens. But it is also a FAILED welfare state, because it gets so little for all that money. Why? Because it privatized (for-profit) what is basically a public good – health.  According to health care expert Uwe Reinhardt, of Princeton University,  “the money we (Americans) spend on health care is money we don’t spend educating our children, or investing in infrastructure, scientific reseach and defense spending.  So  what this means is we ultimately have overmedicalized, poorly educated Americans competing with China, that’s not a very good investment.”

   President Obama blew all his political capital on a health care bill.  Problem is, it does not at all address this P’s and Q’s issue, of slashing health care prices.  And that is the core issue. If there was smaller “P”, then more people could get more “Q”.  It’s not a bad bill.  It simply misses the key point.