Archive for November, 2008

Knowing and understanding The Other

I have previously defined marketing as the organized creation and management of perceptions, which I am sure is not a controversial definition among marketers.   Effective perception management requires you to know and understand all the other entities in your business environment –  your customers, your competitors, your upstream suppliers, your downstream distributors, other partners (such as providers of credit to your customers), and your regulators.  What does it mean to “know and understand” someone?

Well, you can listen to their words and observe their actions.   But words may not provide much guidance to actions – people are notoriously unreliable predictors – or even recallers – of their own behaviour, and they may have many reasons (legitimate or not) to prevaricate, dissemble or distort reality when speaking about their own past actions and intentions.   And observing their actions may be too late if you have a major investment decision to make, such as Go-No Go decision for new product development or new venture launch.  So, “understanding” people means you need to know their intentions, perhaps better than they do themselves.   And for this, you need to understand people’s personalities, their attitudes, their cultures, and the environments in which they make their decisions.   None of this easy, and it requires a great deal of empathy and sympathy with the people you are trying to understand.  Marketing research might be defined as an organized attempt to identify and deploy rigorous methods aiming to know and understand a target group of entities.

The same deep challenge arises for intelligence agencies, who are also trying to know and understand a group of people.    As CIA veteran Robert Baer (among many others) has argued, all the sophisticated satellite imagery and data-mined mobile phone calls in the world won’t tell you about what is inside people’s heads, and what intentions they have.  For that (he argues), people on the ground are needed, able to operate seamlessly within the culture of the targeted community, listening and talking to the enemy.    Empathy and sympathy are necessary here too, although these attributes are often disparaged by many involved as “taking the side of the enemy” or “going native”.     I have long been struck by how much the people leading CIA and successive US administrations in the 1950s and 1960s were able – sometimes more so and sometimes less – to empathize with their opposite numbers in the Kremlin (eg, during the Cuban Missile Crisis), but completely unable to empathize with the supporters of the Vietminh and the Communist Party of Vietnam in the same period.  Former US Secretary of Defense, Robert McNamara, to his lasting credit, seems to have realised this, if only in retrospect.  (This failure to empathize with the Vietnamese is even more remarkable given the USA’s own armed struggle to achieve Independence from colonial rule.)

Seeing last week Uli Edel’s film, Der Baader-Meinhof Komplex (a film treatment of Stefan Aust’s book) brought these thoughts to mind again, because the film portrays the primary intelligence official leading the West German Government’s anti-terrorist efforts against the Baader Meinhof Group (aka the Red Army Faction, RAF) in the 1970s as quite able to empathize with the RAF, or at least to understand with sympathy their reasons for turning to violence.   When 10% of the population in northern Gemany (according to some polls) felt able to say to a pollster that they would be willing to hide members of the RAF in their homes if asked, then considerable tactical cunning and subtlety would be required to defeat the terrorists.    Such tactics do not come from nowhere, but require empathy and sympathy of the terrorist cause for their ideation and effective execution.

Alex Goodall, over at A Swift Blow to the Head, has a new post trying to understand the historical motivations of the terrorists likely to have been behind the Mumbai atrocity last week.   Such efforts at understanding are to be applauded.  Were President-elect Obama to nominate me to the post of Director of CIA, my first action would be to commission independent historical analyses of Catholic resistance to the Protestant rule of Elizabeth I’s police-state in 16th century England (among whose victims was Robert Southwell), and of the anarchist and revolutionary socialist campaigns of terror and assassination in the second half of the 19th century common across the developed world.  My aim in this would be to ask what lessons have been learnt from these past experiences.   Which leads me to wonder:  where is the intelligence community’s Centre for Lessons Learned?

Postcript: An immediate objection to the relevance of these ideas to contemporary events may be that the Catholic recusants in Elizabethan and Jacobean England were not, in general, suicide bombers.   While it is correct that they were mostly not bombers, a characteristic common to the English Catholic priests illegally returning to England to work underground in this period was apparently a great personal desire for martyrdom.  And in this desire they had  – and perhaps still have – considerable sympathy in the Catholic community.   The nearest Roman Catholic Church to where I am writing this post (in England), and built just 40 years ago, has a side chapel devoted to The English Martyrs.

References:

Stefan Aust [2008]:  The Baader-Meinhof Complex.  London, England:  The Bodley Head. (Translation by Anthea Bell.)

Robert Baer [2002]:  See No Evil.  The True Story of a Ground Soldier in the CIA’s War on Terrorism.  New York, NY, USA:  Three Rivers Press.

Uli Edel [Director, 2008]: Der Baader-Meinhof Komplex.  Germany.

Errol Morris [Director, 2003]:  The Fog of War:  Eleven Lessons from the Life of Robert S. McNamara. USA.

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Poem: South of My Days

Today’s poem is by Judith Wright (1915-2000), an Australian poet whose childhood was spent in the Northern Tablelands of New South Wales, and who then spent most of her married life in Mount Tamborine, in south east Queensland (just west of the Gold Coast), moving later to Braidwood, in the Southern Tablelands of NSW (east of Canberra).   To always live so close to the sea, but not at it, marked her clearly as someone of the Great Divide.   All these places are very familiar to me, and growing up with similar stories of cattle droving and bushrangers such as Thunderbolt, her poem resonates greatly.  Of course, the season there now is summer, not the chilling, high-ranges winter she writes of.

The image is of the film “Red River” by Howard Hawks (1948), which was also about a long cattle drove.

South of my days’ circle, part of my blood’s country,
rises that tableland, high delicate outline
of bony slopes wincing under the winter,
low trees, blue-leaved and olive, outcropping granite-
clean, lean, hungry country. The creek’s leaf-silenced,
willow choked, the slope a tangle of medlar and crabapple
branching over and under, blotched with a green lichen;
and the old cottage lurches in for shelter.

O cold the black-frost night. the walls draw in to the warmth
and the old roof cracks its joints; the slung kettle
hisses a leak on the fire. Hardly to be believed that summer
will turn up again some day in a wave of rambler-roses,
thrust it’s hot face in here to tell another yarn-
a story old Dan can spin into a blanket against the winter.
seventy years of stories he clutches round his bones,
seventy years are hived in him like old honey.

During that year, Charleville to the Hunter,
nineteen-one it was, and the drought beginning;
sixty head left at the McIntyre, the mud round them
hardened like iron; and the yellow boy died
in the sulky ahead with the gear, but the horse went on,
stopped at Sandy Camp and waited in the evening.
It was the flies we seen first, swarming like bees.
Came to the Hunter, three hundred head of a thousand-
cruel to keep them alive – and the river was dust.

Or mustering up in the Bogongs in the autumn
when the blizzards came early. Brought them down;
down, what aren’t there yet. Or driving for Cobb’s on the run
up from Tamworth – Thunderbolt at the top of Hungry Hill,
and I give him a wink. I wouldn’t wait long, Fred,
not if I was you. The troopers are just behind,
coming for that job at the Hillgrove. He went like a luny,
him on his big black horse.

Oh, they slide and they vanish
as he shuffles the years like a pack of conjuror’s cards.
True or not, it’s all the same; and the frost on the roof
cracks like a whip, and the back-log break into ash.
Wake, old man. this is winter, and the yarns are over.
No-one is listening
South of my days’ circle.
I know it dark against the stars, the high lean country
full of old stories that still go walking in my sleep.

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Adults at the helm, again

Africans will note that President-elect Barack Obama has selected his homeboy, the admirable Timothy Geithner,  as his nominee for Treasury Secretary.  Geithner spent part of his childhood in East Africa.  I’m sure it was professional competence and not fluency in Dholuo which got him the job.

And here’s The Economist:

“Assuming he is nominated Mr Geithner brings two crucial qualities. First, he represents continuity. From the first days of the crisis last year, he has worked hand in glove with Ben Bernanke, the Fed chairman, and Mr Paulson. He can continue to do so while awaiting confirmation. If Citigroup, for example, needs federal help, Mr Geithner will be involved. An unknown when he joined the New York Fed in 2003, he is now a familiar face to the most senior executives on Wall Street and to central bankers and finance ministers overseas.

Second, he represents competence. He has spent more time on financial crises, from Mexico and Thailand to Brazil and Argentina, than probably any other policymaker in office today. Mr Geithner understands better than almost anyone that in crises you throw out the forecast and focus on avoiding low probability events with catastrophic consequences. Such judgments are excruciating: do too little, and you undermine confidence and generate a bigger crisis that needs even bigger policy action. Do too much, and you look panicked and invite blowback from Wall Street, Congress and the press. At times during the crisis Mr Geithner would counsel Mr Bernanke on the importance of the right “ratio of drama to effectiveness”.

Ah, glorious, glorious competence. How we’ve missed you.”

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Organizational Cognition

Over at Unrepentant Generalist, Eric Nehrlich is asking interesting questions about organizational cognition.   His post brings to mind the studies of decision-making by traders in financial markets undertaken in recent years by Donald MacKenzie at Edinburgh University, who argues that the locus of decision-making is usually not an individual trader, nor a group of traders working for a single company, nor even a group of traders working for a single company together with their computer models, but a group of traders working for a single company with their computer models and with their competitors. Information about market events, trends and opportunities is passed from traders at one company to traders from another through informal contacts and personal networks, and this information then informs decision-making by all of them.

It is possible, of course, for traders to pass false or self-serving information to competitors, but in an environment of repeated interactions and of job movements, the negative consequences of such actions will eventually be felt by the perpetrators themselves.  As evolutionary game theory would predict, everyone thus has long-term incentives to behave honourably in the short-term.  Of course, different market participants may evaluate this long-term/short-term tradeoff differently, and so we may still see the creation and diffusion of false rumours, something which financial markets regulators have tried to prevent.

Reference:

Donald MacKenzie [2009]: Material Markets: How Economic Agents are Constructed.  Oxford, UK:  Oxford University Press.

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Poem: Ach wie flüchtig, ach wie nichtig

As we head towards winter, today’s poem is a German hymn by Michael Franck (1609-1667) about the fleeting nature of human life and human affairs.   The hymn first appeared in print in 1650, after the Thirty Years Religious War (1618-1648) had devastated German society.  The hymn was famously set by JS Bach as Choral Cantata BWV 26, for the 24th Sunday after Trinity, which is this Sunday (23 November 2008).    The Cantata was first performed on 19 November 1724 in Leipzig, and the music for this cantata is among Bach’s most thrilling.  Alex Ross, writing in The New Yorker (11 April 2011), says this of John Eliot Gardiner’s interpretation of this cantata with the Monteverdi Choir and the English Baroque Soloists:    “In “Ach wie flüchtig, ach wie nichtig” (“Oh how fleeting, oh how trifling”) the orchestra even conveys the self-important bustle of an urban crowd. “

The picture above is “Das Eismeer ” (The Sea of Ice) by Caspar David Friedrich, painted in 1823-4.  The text is a translation of that set by Bach, based on a translation into English by Francis Browne (see:  www.bach-cantatas.com).  (Browne has also completed a literal translation of all of Franck’s poem, here.)

1. Chorus

Ah, how fleeting, ah, how trifling
Is the life of man!
As a mist soon arises
And soon vanishes again,
So is our life, see!

2. Aria (T)

As swiftly as roaring water rushes by,
So hurry by the days of our life.
Time passes, the hours hurry by,
Just as the raindrops suddenly divide themselves,
When all rushes into the abyss.

3. Recitative (A)

Joy turns to sorrow,
Beauty falls like a flower,
The greatest strength is weakened,
Good fortune changes in time,
Soon honour and glory are over,
Knowledge and men’s creations
Are in the end brought to nothing by the grave.

4. Aria (B)

To hang one’s heart on earthly treasures
Is a seduction of the foolish world.
How easily arise devouring embers,
How the surging floods roar and tear away
Until everything is shattered and falls apart in ruins.

5. Recitative (S)

The highest majesty and spendour
Are shrouded at last by the night of death.
The person who sat on a throne like a god,
In no way escapes the dust and ashes,
And when the last hour strikes,
So that he is carried to the earth,
And the foundation of his highness is shattered,
He is completely forgotten.

6. Chorale [Verse 13]

Ah, how fleeting, ah, how trifling
Are mankind’s affairs!
All, all that we see,
Must fall and vanish.
The person who fears God stands firm forever.

 

Acknowledgment:

Francis Browne.




Presidential planning

Gordon Goldstein has some advice for President-elect Obama in managing his advisors.  Goldstein prefaces his remarks by a potted history of John F. Kennedy’s experience with the CIA-planned Bay of Pigs action, an attempted covert invasion of Cuba.    Although Goldstein’s general advice to Obama may be wise, he profoundly mis-characterizes the Bay of Pigs episode, and thus the management lessons it provides.   As we have remarked before, one aspect of that episode was that although the action was planned and managed by CIA, staff in the White House – including JFK himself! – unilaterally revised the plans right up until the moment of the invasion.   Indeed, the specific site in Cuba of the invasion was changed – at JFK’s order, and despite CIA’s reluctance – just 4 days before the scheduled date.  This left insufficient time to revise the plans adequately, and all but guaranteed failure.  The CIA man in charge, Dick Bissell, in his memoirs, regretted that he had not opposed the White House revisions more forcefully.

Anyone who has worked for a US multi-national will be familiar with this problem – bosses flying in, making profound, last-minute changes to detailed plans without proper analysis and apparently on whim, and then leaving middle management to fix everything.  Middle management are also assigned the role of taking the blame.  This has happened so often in my experience, I have come to see it as a specific trope of contemporary American culture — the supermanager, able to change detailed plans at moment’s notice!     Even Scott Adams has recorded the phenomenon. It is to JFK’s credit that he took the public blame for the Bay of Pigs fiasco (although he also ensured that senior CIA people resigned for it).  But so indeed he should have, since so much of the real blame rests squarely with the President himself and his White House national security staff.

The Bay of Pigs action had another, more existential, problem.  CIA wished to scare the junta running Cuba into resigning from office, by making them think the island was being invaded by a vastly superior force.  It was essential to the success of the venture that the Cuban government therefore think that the force was backed by the USA, the only regional power with such a capability and intent.  It was also essential to the USA’s international reputation that the USA could plausibly deny that they were in any way involved in the action, in order for the venture not to escalate (via the Cold War with the USSR) into a larger military conflict.   Thus, Kennedy ruled out the use of USAF planes to provide cover to the invading troops, and he continually insisted that the plans minimize “the noise level” of the invasion.   These two objectives were essentially contradictory, since reducing the noise level decreased the likelihood of the invasion scaring Castro from office.

The Bay of Pigs fiasco provides many lessons for management, both to US Presidents and to corporate executives.   One of these, seemingly forgotten in Vietnam and again in Iraq, is that plans do matter.   Success is rarely something reached by accident, or by a series of on-the-fly, ad hoc, decisions, each undertaken without careful analysis, reflection and independent assessment.

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Class struggles at the check-out

Newcomers to Britain usually notice the pervasiveness of the nation’s class system.  This is a country which even has two classes of stamps!  The British supermarket chains have long been a battleground of the class struggle, with some offering mainly own-label, discounted products, and others offering mainly own-label, premium-priced products!   I can recall an elderly neighbour once asking me which of the several nearby supermarkets I shopped at, and then saying, “I’m so pleased!” when I gave an answer which she thought demonstrated that we were in the same social class.   

Now there is news that some of the chains are heading down-market, in order to take advantage of the recession.   But how to do this without losing your current market-position image, nor those customers still able and willing to pay premium prices?

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Poem: Pied Beauty

Following Times go by Turns by Robert Southwell last week, this week a poet greatly influenced by Southwell, and a fellow-Jesuit, Gerard Manley Hopkins (1844-1889).  One of Southwell’s syntactic innovations was repetition:  writing several nouns or phrases one after another, in order to add emphasis.  Hopkins does the same in Pied Beauty, another poem for this northern autumn season.

 

Glory be to God for dappled things—
For skies of couple-colour as a brinded cow;
For rose-moles all in stipple upon trout that swim;
Fresh-firecoal chestnut-falls; finches’ wings;
Landscape plotted and pieced—fold, fallow, and plough;
And áll trades, their gear and tackle and trim.

All things counter, original, spáre, strange;
Whatever is fickle, frecklèd (who knows how?)
With swíft, slów; sweet, sóur; adázzle, dím;
He fathers-forth whose beauty is pást change:

Práise hím.

 

The photo is by Rick Landry.

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Vale, Studs Terkel

 

Studs Terkel, whose sonorous voice and fascination with everday lives enchanted me growing up, passed away just before the US election.   A loss for Chicago, and for all of us.

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Chicago – this is your moment, too

The election of Senator Barack Obama as President of the USA has brought to the fore his adopted home-town, Chicago, now reinforced by his selection of Chicago-based Congressman Rahm Emanuel as his White House Chief-of-Staff.   Chicago, hog-butcher to the world, was known first in the 19th-century for its dominance of the meat industry, and then its dominance of the markets for other agricultural commodities.  In the 20th century this led to dominance of the financial markets where such commodities, and later more sophisticated financial products, were traded.  With all this money, it is not surprising that the world’s first modern skyscrapers were built there too.

But Chicago has also been a centre for business consulting – for example, via Arthur Anderson (founded Chicago, 1913), and its spin-off Anderson Consulting (now Accenture) – and a centre for marketing research and marketing data analysis.   That particular thread includes AC Nielsen (founded Chicago, 1923) and Information Resources, Inc. (IRI, founded Chicago, 1977).   The three founders of IRI, John Malec, Gerald Eskin and William Walter, sought to take advantage of newly-deployed supermarket scanners to analyse tactical marketing data for fmcg products.   (Modern supermarket scanners began operations in the US from June 1974.)

But there is an earlier fibre to this thread:  Before the invention of the electronic computer, Chicago was also a centre of manufacturing for adding machines.  Data, and its analysis, – practical, no-nonsense, mid-western, even – has been a key Chicago strength.

Reference:

Peggy A. Kidwell [2001]: Yours for Improvement – The adding machines of Chicago, 1884-1930IEEE Annals of the History of Computing, 23 (3):  3 – 21.  July 2001.

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