Archive for November, 2008

Orwell’s Found Poetry

George Orwell

I’ve been reading Orwell’s diaries, thanks to a terrific project from The Orwell Prize that sends out his entries exactly seventy years after the day they were originally written. This is a great way to read a diary and it gives you an intimate sense of the writer’s life.

Entries are currently being published from the fall of 1938. Orwell is in Morocco where he was recovering from a near-fatal lung haemorrhage.

The entry from the 28th of October, 1938 is particularly spare and beautiful and reads as a piece of found poetry. I’ve reproduced it here. The line breaks are my own:

One egg. Many black beetles
squashed in the road. Inside they are
brilliant vermillion.

Men ploughing with teams of oxen
after the rain. Wretched ploughs,
with no wheel, which only stir the soil.

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The Dread Pirate Steve Jobs

I’ve been slacking off on maintaining this blog for the last month. It’s the time of the year where malaise and post-nasal drip seem to colour everything. I have a lot of ideas for posts and have a build-up of interesting stuff that I’ve come across in the last couple of weeks that I’d like to share, I just need a kick-start to get me in the habit of posting here again.

Thankfully, my latest Big Idea is out in Report on Business Magazine today, so reprinting it here gives me an easy way to start posting again. Next month’s Big Idea is about how computer models led to the downfall of AIG.

The Dread Pirate Jobs

What do today’s celebrity CEOs have in common with 17th-century pirates? A fearsome affinity for branding, for one

From Friday’s Globe and Mail

Drawing parallels between pirates and modern business is a popular pastime these days, and not just because a ragtag cast of Somali free-booters lucked into capturing more than two dozen Russian tanks earlier this year. In the past 18 months, a raft of books and articles have emerged arguing that, contrary to the half-crazed sea dogs portrayed by the likes of Johnny Depp, real pirates of the Caribbean made rational, intelligent business decisions, based on their dual goals of maximizing revenues and keeping down costs.

One of the men responsible for this explosion was Peter Leeson, an economist at George Mason University. In The Invisible Hook: The Hidden Economics of Pirates, his new book being released this spring, he contends that the world of 18th-century pirates—their business practices, social contracts and even the mythology that surrounds them—was more sophisticated than anyone previously assumed. Not only were pirates great managers, he says, they were experts at branding, developing some of the strongest and most consistent trademarks of all time.

“They wanted to avoid violence as much as possible,” says Leeson. After all, conflicts were costly. Crew members might be harmed in a fight, their ship could be damaged or, worse, they might destroy the ship they were attacking. “Pirates wanted other ships to give up without a fight. One way to do that is to have a reputation that is so heinous it’s scary.” A great example of this was the Jolly Roger flag, “one of the most memorable corporate logos in history,” says Leeson. That the skull and crossbones persists today, on T-shirts and books and candy bars, “is an incredible testament to the power of pirate branding.” The flag’s message is a simple one: Resist us, and you will be slaughtered.

The pirate brand didn’t stop at a winning logo. We know that pirates like Edward Teach, otherwise known as Blackbeard, actively worked on their personal images. “They looked a certain way and they had a particular reputation, and they cultivated that to the greatest extent possible because they understood the benefits it generated for them,” Leeson says. Blackbeard actively encouraged the worst rumours about his methods of torture and his sanity. He was so universally feared that, to this day, there are no verified accounts of his actually having to resort to murder—most of his victims submitted without a fight.

What does this mean for business today? While corporations can’t resort to threats of violence to get deals done, a reputation for hostility is as valuable as ever. The Recording Industry Association of America is an example of this: Its reputation for aggressive litigation (suing little girls and grandmothers with equal vigour) is designed to discourage illegal file-sharing. Likewise, Wal-Mart’s reputation for undercutting the competition causes many small businesses to simply roll over when it moves into town. Whether the business is privateering or private equity, “consistency is important for a message to become institutionalized,” Leeson notes. To many small business owners, Wal-Mart’s smiling yellow happy face is as scary as the skull and crossbones ever was.

But what happens when a company has so intrinsically linked its fearsome reputation to the personality of its captain? In the case of Apple, the company owes much—if not all—of its talent for bending others to its will to an enfant terrible CEO, Steve Jobs. Even within the company, the notoriously authoritarian chief is viewed as “a terror-inspiring taskmaster who’s forever screaming at his workers,” as Wired editor Leander Kahney wrote in his book Inside Steve’s Brain. How does a company ever crawl out from under that cult of personality?

Maybe it doesn’t have to. In the movie The Princess Bride, the black-clad hero Westley made his fortune by assuming the identity of the Dread Pirate Roberts, the original having long since handed off his mask and retired a wealthy man in Patagonia. Now consider Apple: Rumours surrounding Steve Jobs’s health—fuelled by the fact that Bloomberg accidentally published a draft version of his obituary last October—have investors wondering what might happen to the company if he died. Perhaps Jobs’s persona, black mock turtleneck and all, could be passed on down the line, for the next plucky privateer to play Dread Jobs.

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The First Time I Read About Obama

An endorsement of Obama

Months before his famous speech at the 2004 Democratic convention, I read about a young Chicago politician facing a rough and tough fight to become only the third black person elected to the United States Senate. The piece, written by the New Yorker’s William Finnegan, made an immediate impression on me. Here was a constitutional law professor who had been the first black editor of the Harvard Law Review, he was clearly intelligent, but even beyond that, everyone agreed that there was something special about him. He was principled, charismatic, a natural leader and a self-professed “legislation nerd” whose main concern seemed to be the most pragmatic way to move legislation in the right direction. We wasn’t an ideologue, he has a man who wanted to get things done.

When I heard that he had been selected to give a keynote address at the Democratic Convention, I was excited to see him speak, and of course I wasn’t disappointed. No one was. No one could have been. I remembered reading this specific bit at the time and thinking how true it must be now:

Jan Schakowsky told me about a recent visit she had made to the White House with a congressional delegation. On her way out, she said, President Bush noticed her “obama” button. “He jumped back, almost literally,” she said. “And I knew what he was thinking. So I reassured him it was Obama, with a ‘b.’ And I explained who he was. The President said, ‘Well, I don’t know him.’ So I just said, ‘You will.’ ”

I’ve often thought about this piece in the last couple of years as Obama made his triumphant run for the Office that Bush holds, but I had never gone back to read it. The New Yorker recently republished the profile on their website and it was just the opportunity I needed. Please take the time to read The Candidate.

One thing that is always mentioned about Obama is his preternatural calm. This is something he would be caught on tape mentioning about himself in preparation for the candidate debates. As reported in Newsweek’s remarkable “How He Did It“, Obama said, “There’s a certain ambivalence in my character that I like about myself. It’s part of what makes me a good writer, you know? It’s not necessarily useful in a presidential campaign.”

This same aspect of his character is mentioned in the New Yorker piece:

People in Illinois seem largely unaware of Obama’s long, annealing trip into their midst, although they often remark on his unusual calm. Now forty-two and a state senator, Obama emerged, in March, from a raucous primary as the Democratic nominee for the United States Senate. In a seven-person field, he received a remarkable fifty-three per cent of the vote—he even won the “collar” counties around Chicago, communities that supposedly would never support a black candidate. And everyone recalls that, as the votes were being tallied at his headquarters on Election Night, he seemed to be the least agitated person in the place.

That’s exactly the sort of guy I want handling the financial crisis, or the three am phone call.

Here’s another thing I liked about him at the time: While he had his problems with NAFTA, he clearly understood the upside of trade. Finnegan writes:

He mostly told the union men what they wanted to hear. Then he said, “There’s nobody in this room who doesn’t believe in free trade,” which provoked a small recoil. These men were ardent protectionists. A little later, he said, with conviction, “I want India and China to succeed”—a sentiment not much heard in the outsourcing-battered heartland. He went on, however, to criticize Washington and Wall Street for not looking after American workers.

Later, I asked him if he wasn’t waving a red flag in front of labor by talking about free trade. “Look, those guys are all wearing Nike shoes and buying Pioneer stereos,” he said. “They don’t want the borders closed. They just don’t want their communities destroyed.”

David Axelrod makes a couple of appearances in the piece. This, of course, was long before I had any idea who David Alexrod was:

“He could have gone to the most opulent of law firms,” David Axelrod, a longtime friend who is now Obama’s media adviser, said. “After Harvard, Obama could have done anything he wanted.” What he wanted was to practice civil-rights law in Chicago, and he did, representing victims of housing and employment discrimination and working on voting-rights legislation for a small public-interest firm.

One thing that was played up in this piece that I didn’t hear about in either the primaries or the general election is that Obama is not the typical product of the Chicago political machine. If anything, he is a testament to the fading power of that machine.

To an outsider with only the broadest idea of Chicago politics, Obama’s victory in the Democratic primary actually looked like a victory over cynicism. He had not slimed his opponents. Nor was he the candidate of the fabled local machine—that was Dan Hynes, the state’s comptroller, who comes from a powerful Illinois political family. Precinct captains and party organizations and old-line labor unions (most of the Teamsters, the A.F.L.-C.I.O.) had supported Hynes. The machine, however, is an outdated conceit. “A few creaky parts still work,” David Axelrod told me. “They can still elect a few water commissioners or sub-circuit-level judges. But no precinct captain can tell people how to vote for President or the Senate.”

And here was the money-shot for me: Obama comparing a good piece of legislation to great writing or great music:

Obama seems to be a true legislation nerd. When he talks about the maneuvering it took to line up the state’s prosecutors behind the videotape bill, and to keep the police associations neutral, his eyes narrow in pleasure. “You can’t always come up with the optimal solution, but you can usually come up with a better solution,” he said over lunch one afternoon. “A good compromise, a good piece of legislation, is like a good sentence.” He nodded. Miles Davis’s “Kind of Blue” was playing in the background. “Or a good piece of music,” he said. “Everybody can recognize it. They say, ‘Huh. It works. It makes sense.’ That doesn’t happen too often, of course, but it happens.”

In a short entry that accompanied the republication of this piece on the website, William Finnegan talks about why he left out talk of Obama having the talent to become the first black President.

What I didn’t include was something else Schakowsky said. “I think he’s got it,” she told me. “He can go the distance. He could be the first black President.” The quote was too bald, too broad, too bannerlike. Lots of other people in Illinois, including some Republicans, talked up Obama’s extraordinary promise, his possible future on the national stage, and I did use some of those remarks. But just coming out and saying “first black President” felt not only absurdly premature but like bad juju.

I guess we can all be happy that no bad juju got released.

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Eddie Izzard in Legoland

As far as I can tell, there is a 15-year-old filmmaker in the States who is devoted to producing lego-animated versions of famous Eddie Izzard bits. Thank God for the Internet! I definitely prefer watching Lego to watching Izzard in drag.

These ones are particularly brilliant:

Death Star Canteen

Supermarkets and Trolleys

More wonderfulness on Thorn2200’s YouTube channel.

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Beautiful 3D Paper Gears

These papercraft gear models made by Haruki Nakamura (the paper artist, not the Baltimore Ravens safety) are simply beautiful.

I would love a motorized version of either of these sculptures, with the motor on a timer that made the gears turn every couple of minutes.

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This is Your Brain on Advertising

Book cover of

While I was away on vacation, my latest Big Idea column came out in ROB Magazine, this one on neuromarketing.

I remain sceptical about whether technology like fMRI will truly change the world of advertising, product design, etc., but I definitely think that it’s something we’ll be talking about for years to come.

Brand surgery

As long as anyone can remember, marketers have been dying to get inside our heads. What if they really could?

Globe and Mail Update

They were so certain they had a winner. In the early 1980s, Coca-Cola spent $4 million conducting nearly 200,000 taste tests and interviews in an attempt to gauge consumer reaction to a sweeter formulation of its century-old soft drink. The data was unequivocal: Consumers preferred the new formula 8% more than Pepsi and an astonishing 20% more than the original Coca-Cola recipe. But none of that would matter. People simply didn’t want New Coke, and the resulting product quickly became the greatest marketing disaster of all time. Company president Donald Keogh summed it up thusly: “All the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to the original Coca-Cola felt by so many people.”

That emotional attachment we feel toward certain products and brands is something marketers are dying to understand. They’re forever trying to get inside our heads, and they’ve recently turned to neuroscience for help. Researchers dabbling in “neuromarketing” make use of technology like functional magnetic resonance imaging (fMRI) to delve into our minds like never before. It works like this: By measuring blood flow at more than 100,000 locations in the brain and watching the output on an fMRI scanner, scientists can get a pretty good idea of how your brain is processing information. Just last year, a team from MIT, Stanford and Carnegie Mellon made a real breakthrough when they were able to correctly predict which combinations of products and prices would get their subjects to buy a product. All they had to do was watch a group of neurons in the forebrain called the nucleus accumbens (the same portion of the brain that gets turned on when we anticipate a financial gain) and wait for them to light up on the scanner.

A few companies had already been experimenting with this technology. In 2002, scientists working for DaimlerChrysler found that fMRIs could give them a better understanding of how men reacted to cars. In one study, subjects were presented with images of car grilles, and a part of their brains called the fusiform face area (the portion of the temporal lobe that allows us to recognize faces) was triggered. It was later hypothesized that one of the reasons BMW’s Mini Cooper had been selling so well was that, at least subconsciously, it had an “adorable face.” Furthermore, when drivers were shown pictures of high-performance cars, particularly the Ferrari 360 Modena and the BMW Z8, the areas of the brain associated with concepts of wealth and social dominance were excited. No focus group or survey could ever pick up such a pure and unguarded emotional response.

Martin Lindstrom has spent most of the last 20 years travelling the globe, helping steer the course of such brands as Disney, Pepsi, McDonald’s and American Express. According to him, the problem with traditional market research (that is, surveys) is that it relies on people being honest and accurate in their answers. Why would people lie? Any number of reasons. They may be attempting to appear more affluent, cultured or educated than they really are. They may be trying to please or impress the researcher by giving what they believe to be a “correct” answer, or, quite possibly, they are simply unable to articulate how they really feel about a product.

“Surveys and focus groups force people to pass everything they think and feel through a rational verbalization filter,” says Lindstrom. “Neuromarketing taps into the 85% of our mind that is unconscious. Try asking someone: Why do you love your wife? Give me three bullet-point answers. It’s ridiculous. Yet that is exactly what we’re doing when we ask people why they love their iPod.”

In 2004, Lindstrom directed the largest neuromarketing study ever conducted. The project lasted three years and involved the work of 200 researchers, 10 professors, and over 2,000 subjects in the U.S., England, Germany, Japan and China who volunteered to have their brains scanned. Lindstrom outlines the results of this study in his book, Buyology, released earlier this month. One of the most fascinating chapters details an experiment that underscores just how powerful some brands have become. A group of people who deem themselves devout were shown a series of religious symbols as well as a number of consumer products, ranging from pints of Guinness to Harley-Davidson motorcycles. The products of particularly powerful brands, researchers noted, lit up the same areas of the brain—just as strongly—as the images of crosses, rosary beads, Mother Teresa, the Virgin Mary and the Bible.

The chances that a machine could help a company make a product so good and so satisfying that using it becomes a quasi-religious experience are slim. Still, there are some who feel that having this much insight into the way we think is simply too much power to put in the hands of marketers. CommercialAlert, the consumer protection organization founded by Ralph Nader, calls neuromarketing “Orwellian” and claims that it will lead to ever more marketing-related diseases such as obesity, diabetes and alcoholism. They find it offensive that one of the world’s greatest medical inventions is being used to sell goods, rather than help people.

Martin Lindstrom is unwilling to cede the moral high ground. In his book’s introduction, he writes, “The more companies know about our subconscious needs and desires, the more useful, meaningful products they will bring to market. …Imagine more products that earn more money and satisfy customers at the same time. That’s a nice combo.” Neuromarketing isn’t mind control; it’s market research, and it remains to be seen whether it can help companies avoid disasters like New Coke in the future. After all, the functional MRI is merely a descriptive technology. It’s like the difference between a weather map and a climate model: The map can tell you where it’s raining, but not why it rains. And that’s not going to change any time soon. The brain is still a far more complicated machine than we understand.

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