This is a metaphorical essay on personal ethics, worthy of a serious read and contemplation. When I saw the title I was intrigued but suspected it had something to do with Andy Grove’s adage, “sewage flows downhill,” which means “if anything bad happens it will eventually flow down to you.” This is about ethics. The points made here are particularly apt in light of the huge number and sheer scale of recent business frauds: the Volkswagen fraud, LIBOR, Lehman Brothers, Bernie Madoff’s pyramid scheme, Conrad Black in Canada, Olympus in Japan, Bernie Ebbers and Worldcom, Tyco International, stretching back all the way to Enron, Michael Milken’s junk bonds, and the 1980’s savings & loan debacle.
This is a metaphorical essay on personal ethics, worthy of a serious read and contemplation. When I saw the title I was intrigued but suspected it had something to do with Andy Grove’s colorful adage, “sewage flows downhill,” which means “if anything bad happens it will eventually flow down to you.” This is about ethics. The points made here are particularly apt in light of the huge number and sheer scale of recent business frauds: the Volkswagen fraud, LIBOR, Lehman Brothers, Bernie Madoff’s pyramid scheme, Conrad Black in Canada, Olympus in Japan, Bernie Ebbers and Worldcom, Tyco International, stretching back all the way to Enron, Michael Milken’s junk bonds, and the 1980’s savings & loan debacle.
This is only a small selective list and many will be able to think of many other well-known scandals. The problem is that there are no easy answers in many situations. How much do we risk by taking an ethical stand on an issue, and the fact that the bigger the issue the bigger our personal risk? It is very existential. At the same time appear to have learned nothing from all these recent scandals, tightened regulations or changed personal behavior. A recent study of Wall Street brokers suggests that most would still commit fraud, if they benefited substantially, and believed that they would not be prosecuted for it.
Some years ago I heard an analogy that resonated with me. It was a description of learning something – some piece of information about a person’s character – that was so negative, so vile, that no matter what else you knew about that person, you instantlyunderstood the core of the person in question. There is, in fact, a folk-wisdom saying that illustrates this concept, which I first heard on a talk radio show: “That tells me everything I need to know about him.” Ironically, the talk radio host from whom I first heard this expression was revealed to have done something I consider so vile that, even before he was taken off the air, I realized that deed (plus his “Yeah, so what?” attitude) told me everything I needed to know about him – and I stopped listening… and having stumbled across his new broadcast home while channel-surfing, I still refuse to listen to him.
Before I dig into this, I want to be clear – nobody is perfect. We all have our flaws, being human beings, and need to be forgiving and tolerant. We all struggle with weaknesses and sin, and while Jewish I’ve found I like the instructional concept of the Seven Deadly Sins (and the other side of the coin, the Seven Cardinal Virtues), and am convinced that while all these are human weaknesses, each person has their “one sin” with which they wrestle as their dominant weakness. And in that struggle with and – hopefully – victory over it do we demonstrate that we are more than a collection of chemicals and cells, but sentient creatures striving to improve ourselves.
So… this analogy goes as follows:
Imagine you have two cups. One contains the purest, clearest, most wonderful water possible. The other, raw sewage. When you mix the two, you get sewage. The same for a cup of sewage and a pitcher of water, or a barrel of water. Regardless of the size of the pure water container, the sewage contaminates it.
This became the root of what I refer to as “The Rules of Sewage” in regards to a person’s character. This one is the First Rule of Sewage, The Non-Proportional Rule of Sewage. It means, as the saying above goes, that you can sometimes learn a thing about a person that taints the entirety of their personality – e.g., a person beats their spouse. It doesn’t matter what else they are, what acts they do, they are polluted by that one thing.
This simmered in my mind over a couple of years, and I started to formulate other Rules of Sewage. Each was based on the same base concept – mixing water and sewage. Thus far I’ve come up with six.
The Second Rule of Sewage is the Non-Compartmentalized Rule of Sewage. You cannot pour a cup of sewage into a container of water, and have it only remain in the place you poured it. Bad character leaks into other elements of character. E.g., a person who cheats on their spouse – thus breaking a sacred oath – cannot be counted on to keep an oath in any other part of their life.
The Third Rule of Sewage is the Immersive Rule of Sewage. Imagine an edible fish taken from that pure water, placed in sewage, and somehow surviving – no matter the fish’s immune system and other defenses, it will become contaminated. No matter how pure you are to begin with, if you are surrounded by bad people or bad content, it will start to affect you. E.g., a good, honest person who goes to work in a place with bad ethics and stays there – for whatever reason – will sooner or later find they are making compromises to their own character and standards, and rationalizing their doing so. (And this is, of course, the root of the proverb “Birds of a feather, flock together.”)
The Fourth Rule of Sewage is Irreversible Rule of Sewage. Simply put, it’s a lot easier to mix the sewage in and ruin the water than reversing the process. While people are certainly capable of change, it takes deliberate effort to do so, and usually also an ongoing awareness and maintenance of that change to avoid slipping back to whatever factor is being avoided.
The Fifth Rule of Sewage is the Odiferous Rule of Sewage. Sewage, to put it bluntly, stinks like sh*t. Bad odors like that can be covered up or contained, but not forever. Sooner or later the malodorous item in a person’s character will out, and be readily apparent. This actually ties in with…
The Sixth Rule of Sewage, the Reactive Rule of Sewage – when faced with a tank of sewage, normal people react negatively. And while a person learning something about another (ref: Rule One) won’t physically turn their head away and scrunch up their face in disgust, I believe the plain truth is that upon learning of such a think will cause a decent person to dissociate – to whatever degree possible – from the other. Failing to do so, or worse expressing approval, could be considered an example application of Rule One about them too.
In putting this concept “out there” it will be interesting to see if other Rules of Sewage develop in the comments.
I noticed the following post on LinkedIn, and thought that it was important to share it. When I first came to UBC to teach Industry Analysis and Entrepreneurship in the Faculty of Management, I was struck by how utterly unprepared Faculty of Management students were to stand up and communicate their ideas. Most students used 3 x 5 cards and stared at the floor. One student, without realizing it, stood up and crossed his arms across his chest, projecting only his personal discomfort with the situation. Clearly this problem needed to be addressed. If there is one thing I have learned since graduating with a Speech-Communication degree, it is the importance of being able to stand up and communicate your ideas, what you believe, and most importantly, who you are. It is crucial to career success.
I noticed the following post on LinkedIn, and thought that it was important to share it.
When I first came to UBC to teach Industry Analysis and Entrepreneurship in the Faculty of Management, I was struck by how utterly unprepared Faculty of Management students were to stand up and communicate their ideas. Most students used 3 x 5 cards and stared at the floor. One student, without realizing it, stood up and crossed his arms across his chest, projecting only his personal discomfort with the situation. Clearly this problem needed to be addressed. If there is one thing I have learned as a Speech-Communication graduate, it is the importance of being able to stand up and communicate your ideas, what you believe, and most importantly, who you are. It is crucial to career success, no matter what role you may play. Some people are “naturals,” while others are not. It makes no difference. You can do it if you make an effort.
The next semester I was offered the opportunity to teach Management Communication, which apparently had been taught without any regard for the crucial importance of interpersonal communication and self-confidence. I seized on the opportunity, and my first order of business was to have people stand up and summarize themselves in 3 minutes or less. We spent the entire semester focused on “Toastmaster” public speaking skills and business ethics, and nothing could have been more productive or satisfying. Many of those students have since told me that they learned many important skills in my Management Communications course.
How to write an inspirational speech? Start with a moonshot
‘Inspirational speech’ is like ‘viral video’ – a great conversational soundbite, but devilishly hard to do.
That said, if you’re going to the massive effort of crafting a speech for a conference or event, it’s worth shooting for inspirational. You may not get to John F Kennedy or Martin Luther King, but trying to rise above the powerpoint stiffs is a noble goal.
And make no mistake. It’s important that you do shoot for inspirational. Inspirational stands out. If you’re raising investment, you need to stand out from your competitors. If you’re addressing a conference, your company’s brand (personified by you) needs to stand out from all the others on the podium.
Anyone offering you a simple answer to crafting an inspirational speech should be treated with the same credulity as a Nigerian prince offering you his fortune online. But there are some fundamentals that can get you on the right track.
Finding your moonshot idea is the first of those fundamentals.
If you were JFK, what would you say?
Most of the clients we write speeches for are pretty decent speakers already. They have good presentations, and they can command a room.
However, their presentations tend to explain how something is going to be done. The ten step plan. Three easy tips. Five things you should never forget.
JFK didn’t do three easy tips. He left that for his strategists to work out behind closed doors.
Instead, JFK focused on winning the hearts and minds of his listeners. Inspiring them to believe in an idea – not telling them how to execute that idea.
Think of your speech. Is there a big, lofty idea in there that will give your audience goosebumps?
Getting to goosebumps
Here’s my preferred methodology for trying to pull someone’s visionary idea out of their less-than-visionary script.
Why does the world need this? If you can tell me why society / civilization / the world needs this idea, it might have the trappings of a ‘moonshot’. Remember, need isn’t the same as could use. I need oxygen. I could use a steam iron for my suits.
What will the world look like once they have this? If the world sees your idea come to fruition, will it be a better place? Really better? Or just better in a superficial marketing sense? Your audience can sniff out non-innovation dressed up in a slick tagline and slide show. If your gut is telling you that your idea isn’t big enough to change the world in a fundamental way, dig deeper. Or find another idea.
Can my dream be part of your dream? Your big idea might be wonderful, but if there’s no role for me in it, then it’s simply an interesting side show. For example, I can’t get behind your dream to make lots of money – that’s all about you. I can, however, get behind your dream of redistributing all your money to start microbusinesses that make my inner city a more vibrant place.
What about the brass tacks?
If you have a complex topic to address, you can still do an inspirational speech. The trick is creating a leave behind.
A leave behind, in the form of a pdf on a landing page you create specifically for your speech, can be downloaded by anyone who wants the brass tacks of your talk.
Saying at the beginning of your talk that you have a leave behind gives you wings. Everyone knows you aren’t going to deal with the how in your talk. Your audience will relax, put down their pens and phones, and just enjoy. Win win.
Will it work?
If it were easy to do a moonshot speech, we’d all do them. We’d also all write Oscar-winning screenplays.
Fact of the matter, you may not get to the moon with your speech. But as the quote goes, if you aim for the moon and miss, chances are you’ll still hit a star.
Let’s be frank. Finding a decent job commensurate with your new UBC degree in Management has become extremely difficult. I have blogged previously here on the discounted value of a degree, as explained by UC Berkeley economist and former Secretary of Labor, Robert Reich. For those living in the Okanagan or hoping to stay here to enjoy the sunshine, I urge you to relocate to a region with better employment prospects. BC Business recently published a ranking of BC cities for employment prospects. Kelowna ranked 17th, despite being the second largest region in B.C.. Calgary is no better option for jobs these days.
Let’s be frank. Finding a decent job commensurate with your new UBC degree in Management has become extremely difficult. I have blogged previously here on the discounted value of a degree, as explained by UC Berkeley economist and former U.S. Secretary of Labor, Robert Reich. For those living in the Okanagan or hoping to stay here to enjoy the sunshine, I urge you to relocate to a region with better employment prospects. BC Business recently published a ranking of BC cities for employment prospects. Kelowna ranked 17th, despite being the second largest region in B.C.. Calgary is no better option for jobs these days.
The following list of potential employers is admittedly U.S. focused but it does give you some idea of kind of things you should look for in Canada. Calgary is no longer a good option due to the oil price slump, expected by Goldman Sachs to last at least five years. Avoid the Energy Industry completely unless it is renewable energy, a growth industry. So not much opportunity in fossil fuels industry for the foreseeable future. Two of the ten below are immediately off this list for that reason alone: Chevron and Schlumberger. In Canada, some UBC FOM graduates have found internships and entry-level positions in financial services companies like Edward Jones. High tech companies like Cisco Systems, Intel, and many others offer internships, but the competition is fierce. If you haven’t already done some serious advance work, you are probably out of the running. Don’t write off smaller companies if they are in an interesting industry. If you can afford it, social entrepreneurship may pay dividends to your career. Bottom line: if you want a good internship opportunity you are going to need to cast your net much further than you may have thought. work all possible network connections, and don’t be shy about asking for “informational interviews” with companies you are targeting. Looking in British Columbia only will be limiting though there are a few good companies, so it may be necessary to look across Canada. Follow the strengths of your aptitude, and people you know who can help you. Ask any FOM alumni who has managed to find a good entry-level position and they will tell you that it was a long, hard process. As my tag line says, “The harder I work, the luckier I get.”
REBLOGGED from CNNMoney:
Challenging projects. The real-world impact of one’s work. Access to company leaders. Free food.
These are some of the hallmarks of a great internship, according to reviews on the jobs site Glassdoor, which recently published its annual list of the highest-rated companies for interns.
Four of the firms in the top 10 are big tech companies; two are in the oil and gas sector, and there’s one each in media, finance, health and business consulting.
The interns who offered anonymous reviews of the companies where they worked also reported their pay. Average amounts for each company ranged from $1,722 to $7,214 a month.
CNNMoney contacted the 10 companies: three confirmed the pay numbers were in the ballpark, four wouldn’t confirm but said they pay competitively, and three didn’t respond. The survey didn’t distinguish between undergrad and grad student interns. Companies may pay graduate students more, so the average pay reported may be higher than what undergrad interns could earn in some cases.
Each company on the list is actively hiring for interns. And geographically, Glassdoor data show that New York currently has the most open internships (2,500), followed by San Francisco (1,500) and Los Angeles (1,400).
Company
Avg. monthly pay interns reported
What interns say
Facebook
$6,779 (software engineer intern) $6,058 (intern)
Great culture, challenging tasks, access to anyone in company
Chevron
$6,001
Professionalism, they invest in you, lots of opportunities
Google
$6,788 (software engineer intern) $7,214 (intern)
Able to make an impact, supportive managers and co-workers, lots of training
Quicken Loans
$1,850
Learned a lot about mortgage industry, room for personal growth, free lunch
eBay
$5,893 (software engineer intern)
Felt appreciated, got to work with top execs, “Bagel Wednesdays”
Yahoo
$5,178
Everyone’s energetic and dedicated; Marissa Mayer a great leader
Epic Systems
$5,003 (software developer intern)
Well-defined projects, flexibility, fun events for interns every few days
Schlumberger
$5,607
Lots of learning opportunities, real projects, everyone helpful
NBCUniversal
$1,722
Great program, professional development sessions beyond your specific job
Boston Consulting
Group
$5,566
Surrounded by talent; friendly management; career development made a priority
Report Lacks The Rigor Necessary To Give It Much Credibility. The AO report’s “economic impact” conclusions are based on 2014 Survey Monkey voluntary responses, which are problematic due to an apparent lack of critical assessment. The report does not follow the kind of rigorous industry analysis performed by leading technology consultancy firms like International Data Corporation (IDC) or Gartner.
AO Tech Industry Report Lacks The Rigor Necessary To Give It Much Credibility
Read the AO press release and access the full reporthere
The AO report’s “economic impact” conclusions are based on 2014 Survey Monkey voluntary responses, which are problematic due to an apparent lack of critical assessment. The report does not follow the kind of rigorous industry analysis performed by leading technology consultancy firms like International Data Corporation (IDC)or Gartner. The definition of an “industry,” for example the “automobile industry in Canada,” involves broad activity around all aspects of “automobiles,” but at some point firms like Kal Tire or “Joe’s Brake Shop” might be excluded from a definition of the automobile industry. The report does not mention the rigor applied to this industry analysis, so the question is left open, “What exactly is the “tech industry” in the Okanagan?” A well-defined $1 Billion industry is the mobile advertising industry in Canada. Is that what we have in the Okanagan? By way of comparison, I reported on New Zealand’s Ice House tech incubator economic impact report, which has much greater credibility. The AO report is essentially claiming that the Okangan technology economy is more than twice the size of New Zealand’s…That’s too big of a leap of faith for me. Read New Zealand’s Ice House Startups Achieve Impressive Resultsand contrast it with the AO report.
Then there is the issue of Kelowna as an employment market, as noted in the recently reported BC Business low ranking of Kelowna at 17th. Clearly, there are unresolved contradictions with the AO report.
When I graduated from a prestigious public university in California, my future was so bright I had to wear shades. Even with a seemingly worthless degree in the Humanities and Social Sciences, I managed to quickly land an entry-level management position at Intel Corporation, which became a rocket ride into the top marketing unit in the company, heavily populated with Ivy League MBA’s. I also gained extensive international business experience which fueled my later career. My former students know that I have repeatedly said in class and in student meetings that this would simply not happen today. Employers today are swamped with applications from literally hundreds and thousands of graduates with credentials far better than mine at that time. I know of one top graduate from UBC Faculty of Management from a few years ago, who entered the job market with very high hopes and expectations, but is still struggling to move beyond low paying hourly employment. What has happened?
Robert Reich, Former U.S. Secretary of Labor in the Clinton Administration, and currently Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley, details the problems with the economic value of university degree. The points Reich makes are as relevant in Canada as in the United States. “People with college degrees continue to earn far more than people without them. And that college “premium” keeps rising. Last year, Americans with four-year college degrees earned on average 98 percent more per hour than people without college degrees. In the early 1980s, graduates earned 64 percent more. So even though college costs are rising, the financial return to a college degree compared to not having one is rising even faster.” So far so good.
Reich concludes, “But here’s the qualification, and it’s a big one. A college degree no longer guarantees a good job. The main reason it pays better than the job of someone without a degree is the latter’s wages are dropping,” The value of a degree is actually decreasing. This is the same economic inequality problem affecting all other aspects of the economy. The very best of our graduates, those who are the most resourceful and motivated, will manage to succeed, but the vast majority will be on a slippery slope. I have seen this in my time at UBC, and most students can look around and see the problem among their classmates.
Reposted from Salon, Tuesday, November 25, 2014:
Robert Reich: College gets you nowhere
The former secretary of labor examines why a degree no longer guarantees a well-playing job
This is the time of year when high school seniors apply to college, and when I get lots of mail about whether college is worth the cost.
The answer is unequivocally yes, but with one big qualification. I’ll come to the qualification in a moment but first the financial case for why it’s worth going to college.
Put simply, people with college degrees continue to earn far more than people without them. And that college “premium” keeps rising.
Last year, Americans with four-year college degrees earned on average 98 percent more per hour than people without college degrees.
In the early 1980s, graduates earned 64 percent more.
So even though college costs are rising, the financial return to a college degree compared to not having one is rising even faster.
But here’s the qualification, and it’s a big one.
A college degree no longer guarantees a good job. The main reason it pays better than the job of someone without a degree is the latter’s wages are dropping.
In fact, it’s likely that new college graduates will spend some years in jobs for which they’re overqualified.
According to the Federal Reserve Bank of New York, 46 percent of recent college graduates are now working in jobs that don’t require college degrees. (The same is true for more than a third of college graduates overall.)
Their employers still choose college grads over non-college grads on the assumption that more education is better than less.
As a result, non-grads are being pushed into ever more menial work, if they can get work at all. Which is a major reason why their pay is dropping.
What’s going on? For years we’ve been told globalization and technological advances increase the demand for well-educated workers. (Confession: I was one of the ones making this argument.)
This was correct until around 2000. But since then two things have reversed the trend.
First, millions of people in developing nations are now far better educated, and the Internet has given them an easy way to sell their skills in advanced economies like the United States. Hence, more and more complex work is being outsourced to them.
Second, advanced software is taking over many tasks that had been done by well-educated professionals – including data analysis, accounting, legal and engineering work, even some medical diagnoses.
As a result, the demand for well-educated workers in the United States seems to have peaked around 2000 and fallen since. But the supply of well-educated workers has continued to grow.
What happens when demand drops and supply increases? You guessed it. This is why the incomes of young people who graduated college after 2000 have barely risen.
Those just within the top ten percent of college graduate earnings have seen their incomes increase by only 4.4 percent since 2000.
When it comes to beginning their careers, it’s even worse. The starting wages of college graduates have actually dropped since 2000. The starting wage of women grads has dropped 8.1 percent, and for men, 6.7 percent.
I hear it all the time from my former students. The New York Times calls them “Generation Limbo” — well-educated young adults “whose careers are stuck in neutral, coping with dead-end jobs and listless prospects.” A record number are living at home.
The deeper problem is this. While a college education is now a prerequisite for joining the middle class, the middle class is in lousy shape. Its share of the total economic pie continues to shrink, while the share going to the very top continues to grow.
Given all this, a college degree is worth the cost because it at least enables a young person to tread water. Without the degree, young people can easily drown.
Some young college graduates will make it into the top 1 percent. But that route is narrower than ever. The on-ramp often requires the right connections (especially parents well inside the top 1 percent).
And the off-ramps basically go in only three directions: Wall Street, corporate consulting, and Silicon Valley.
Don’t get me wrong. I don’t believe the main reason to go to college – or to choose one career over another — should be to make lots of money.
Hopefully, a college education gives young people tools for leading full and purposeful lives, and having meaningful careers.
Even if they don’t change the world for the better, I want my students to be responsible and engaged citizens.
But when considering a college education in a perilous economy like this, it’s also important to know the economics.
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His new movie “Inequality for All” is in Theaters. His widely-read blog can be found atwww.robertreich.org.
I had the great good fortune to know Professor John Sperling, Cambridge don, when I was an undergraduate student at San Jose State University. At that time, our campus was awash in great thinkers: visiting scholars Buckminster Fuller, Alan Watts, and a host of other eminent faculty. I knew Sperling as a friend and mentor, and worked closely with John and my friends with the SJSU student government: Dick Miner, Peter Ellis and others, some of whom went on to work with Sperling at the Institute of Professional Development and later at the University of Phoenix. My fondest recollection of John was as the catalyst for our symbolic burial of an ugly yellow Ford Maverick on the first Earth Day. John challenged us to define ourselves by what we would do to mark that day. It has become one of the defining events of the first Earth Day. But I also view John as the precursor of the current MOOC’s movement. John shook up the academic world with his revolutionary ideas about education. John created immense controversy but he also spawned significant change.
I had the great good fortune to know Professor John Sperling, Cambridge don, when I was an undergraduate student at San Jose State University. At that time, our campus was awash in great thinkers: visiting scholars Buckminster Fuller, Alan Watts, and a host of other eminent faculty. I knew Sperling as a friend and mentor, and worked closely with John and my friends with the SJSU student government: Dick Miner, Peter Ellis and others, some of whom went on to work with Sperling at the Institute of Professional Development and later at the University of Phoenix. My fondest recollection of John was as the catalyst for our symbolic burial of an ugly yellow Ford Maverick on the first Earth Day. John challenged us to define ourselves by what we would do to mark that day. It has become one of the defining events of the first Earth Day. But I also view John as the precursor of the current MOOC’s movement. John shook up the academic world with his revolutionary ideas about education. John created immense controversy but he also spawned significant change. Regrettably, over the years, Phoenix has turned into a questionable “for profit” education mill, akin to Trump University, and now the subject of a federal lawsuit for defrauding military veterans.
From the Arizona Republic:
John Sperling, a virtual illiterate as a teenager, learned to love learning as a young adult and went on to revolutionize the business of college education and access to it by creating the for-profit University of Phoenix.
His death at 93 on Friday was announced Sunday on the website of Apollo Education Group, the University of Phoenix’s parent company. A cause of death was not listed.
Sperling, a billionaire with homes in the San Francisco Bay Area and Phoenix, was remembered for his vision and his tenacity in support of adult education and numerous other causes that engaged his passion. Although he kept a low profile in Arizona, his philanthropy supported a variety of causes, from solar research to anti-aging efforts to the decriminalization of marijuana.
Sperling’s son, Apollo Group Board Chairman Peter Sperling, and company CEO Greg Cappelli said in the statement that “Dr. Sperling’s indomitable ideas and life’s work served as a catalyst for innovations widely accepted as having made higher education more accessible to adult students.”
Sperling founded the chain of schools in the 1970s and retired as executive chairman from its parent company in 2012. On his watch, the school grew from a small California operation to a publicly traded Fortune 500 company with 12,000 workers in Arizona. It established itself as the national leader in adult education and online classes.
Sperling’s schools often catered to older students wanting classes at more flexible hours. By tapping a demographic niche that traditional schools missed or didn’t want, Sperling elbowed the University of Phoenix into a lasting place in the often-staid world of higher education. But by the time he retired, the University of Phoenix had become a sometimes-controversial symbol of the rapid growth and excesses of for-profit universities.
The financial success of the University of Phoenix allowed Sperling to bankroll his social initiatives, from advocating medical marijuana to seeking to clone his dog.
“University of Phoenix is my proudest legacy,” Sperling said in a 2011 interview withThe Republic. “Knowing that over 1million staff, faculty and students have benefited in some way from the university is something I’m very proud of.”
“I think everyone will agree John Sperling really shook up the higher-education world,” said William Tierney, a professor of higher education at the University of Southern California and co-author of the book “New Players, Different Game: Understanding the Rise of For-Profit Colleges and Universities.”
“Sperling realized a need that the market had not thought about and the public sector frankly didn’t care about, and man, was he right,” Tierney said in a 2013 interview. “He really tapped into education as a needed commodity in a way that nobody else had done.”
A singular vision
Those who knew him well described Sperling as a man of generosity, curiosity, vision and grit.
“His focus was on bettering people’s lives,” said Jorge Klor de Alva, a former University of Phoenix president and Apollo Group senior vice president who knew Sperling for more than 40 years. “This university was focused on trying to help people succeed.”
Klor de Alva said Sperling, essentially shy, never backed down from a fight.
“He was always in pursuit of social-justice causes,” Klor de Alva said.
Grant Woods, a former Arizona attorney general and attorney who represented Apollo Education Group, said Sperling was ahead of his time with his views on many topics, including treatment for drug offenders, instead of incarceration, and the benefits of telemedicine.
“Professionally I was impressed with how visionary he was,” Woods said. “He was willing to be controversial, to fight the fights that most people wouldn’t fight. He was never afraid to put his money and his prestige behind them.”
Sperling invested heavily into causes including plant genetics and seawater agriculture, anti-aging medicine and drug decriminalization as opposed to treatment. He participated in efforts with fellow billionaires George Soros and Peter Lewis to sponsor and pass citizen-backed initiatives in 17 states focusing on treatment and education, as opposed to jail time, for non-violent offenders, while decriminalizing marijuana, especially for medical purposes.
U.S. House Minority Leader Nancy Pelosi, a fellow Bay area resident, said in a statement: “John Sperling’s passion for education changed America. By improving access to higher education for thousands of non-traditional students, he created a movement and empowered a generation of working adults with the tools needed to provide a better quality of life for their families. His life story inspires us to see — and seize — opportunities.”
Humble beginnings
Sperling achieved his perch atop for-profit education after escaping a humble, sickly and unhappy childhood.
In his autobiography, “Rebel With a Cause,” Sperling wrote that he was the youngest of five children. He was born in a log cabin in Missouri and raised in a home that had a coal-burning stove and an outhouse. He said his mother was “possessively loving” and described his father as a “classic ne’er-do-well” who often beat him.
“I learned nothing from my childhood except that it’s a mean world out there, and you’ve got to bite and scratch to get by,” he told Fast Company in a 2003 interview.
Sperling joined the Merchant Marine in 1939, and one of his ship’s engineers befriended him, teaching Sperling to read. Sperling was spellbound by classics such as “Notes from the Underground” and “The Great Gatsby,” fueling a lifelong love of literature and poetry.
After serving in the U.S. Army Air Corps, Sperling earned an undergraduate degree from Reed College on the G.I. Bill. He then attended the University of California-Berkeley, where he was awarded a fellowship to study at King’s College at the University of Cambridge. He earned his doctorate in 18th-century English mercantile history in 1955.
Starting in 1960, Sperling served for 12 years as a tenured professor of history at San Jose State University.
There, Sperling made a name as a union activist.
Popular program
While still teaching in San Jose, in 1974 Sperling won a government contract to develop coursework for teachers and police officers who worked with at-risk children.
According to New Yorker magazine, top administrators at San Jose State balked at the program. The University of San Francisco was more receptive, so he launched it there.
The program proved so popular that Sperling, working with business partners, created an adult-education program for 2,500 students with classes available at Bay Area colleges. It became known as the Institute for Professional Development and offered bachelor’s and master’s degrees for its students.
“He got this thing going, and it was making money. It was running a surplus,” said David Breneman, a University of Virginia professor who teaches the economics of education. “The regional accrediting body in California came down on him like a ton of bricks. They didn’t like anything he was doing.”
Sperling responded in 1976 by moving the IPD and renaming it after its new home: the University of Phoenix. Within three years, it gained grudging accreditation in Arizona.
Sperling told The Republic that Arizona attracted him because the state “had never gotten around to writing any regulations.”
With his background in economics, Sperling draped his university in pragmatic cost-consciousness. Instructors were drawn from the working world. Accountants, for example, taught accounting rather than decorated academics.
Students presumably benefited from the instructors’ real-world experience; Sperling and the students gained from the lower faculty salaries that went with it.
In 1981, Sperling formed the Apollo Group, the parent company of the university, and bought out one of his partners. Seven years later, Sperling bought out another partner to take full control of Apollo.
As the university fell under his full control, it also began developing distance-learning classes, a forerunner to the online courses that would help remake adult education.
For years, the University of Phoenix grew steadily, largely on the strength of an older student body looking to start new careers. At a time when traditional schools made students build schedules around faculty, Sperling built his no-frills school around the students.
In December 1994, the Apollo Group joined the Nasdaq Stock Market as a publicly traded company. At the time, it had 28,000 students. In some ways, it was a final vindication of Sperling’s unique approach to higher education. But some say it also put the school on a new path that inevitably led to a shift in priorities.
“They got pushed by Wall Street,” said Breneman, who co-edited the book “Earnings from Learning: The Rise of For-Profit Universities.” “They got into this rat race of having to try to grow 10, 20, 30percent every year, so they started dipping down into younger students.”
By 2000, enrollment in the Apollo Group’s holdings reached 100,000. Three years later, it was 200,000. By 2010, enrollment had mushroomed to 600,000.
At that point, more than 80 percent of the university’s revenue source was federally backed student loans. In 2008, for example, it collected more than $3billion in federal financial aid.
That attracted scrutiny from Washington. On Capitol Hill, the university and its many for-profit competitors came under fire for bringing in too many students ill-prepared for college who, if they graduated at all, found themselves saddled with high debt and poor job prospects. The high dropout rates were fueled, some said, by recruiters whose pay was effectively tied to enrollment, which would violate federal law.
In 2009, the Apollo Group settled a whistle-blower lawsuit against the university for nearly $80million to dispense with claims of recruiting commissions.
A two-year Senate investigation pointed out in 2012 that an online degree from the University of Phoenix cost six times more than a comparable degree from the Maricopa Community College system and that Sperling was paid $8.6million in 2009, 13 times more than the president of the University of Arizona.
“When the University of Phoenix was started in 1976, it pioneered an entirely new model of learning,” the report concluded. “That model revolutionized thinking about how to provide opportunities for higher education to underserved and non-traditional students. Yet in the 2000s, Apollo appears to have made critical decisions that prioritized financial success over student success.”
During the probe, Washington tightened lending rules to hold schools accountable for the degrees their students pursued, and the university made its own adjustments, though Sperling, with characteristic bluntness, disagreed.
“We don’t agree with the new regulations. We think they are stupid,” he told The Republic in 2011.
Operating under tighter regulations, an uncertain economy and intense competition from other for-profit schools and public universities that had learned from Sperling’s model, the University of Phoenix contracted. It has cut its payrolls by thousands, and degreed enrollment in May was 242,000.
Sperling left as CEO of the Apollo Group in 2001 and retired as executive chairman of the company’s board of directors in December 2012.
Variety of causes
In 1996, Sperling gained attention as a financial backer of medical marijuana in Arizona, something he favored during his recovery from prostate cancer in the late 1970s.
In 2000, he funded a biotech company to help clone pets. His dog Missy died in 2002 without success in cloning her. Four years later, the company was shuttered.
Between 1997 and 2013, Sperling made more than $700,000 in political contributions, according to federal records. Overwhelmingly, but not totally, he gave to Democrats. He wrote several books, some on education and one outlining his liberal views on political demographics.
Although he was often at odds with the establishment, most say Sperling left a mark on higher education.
“I think we need to give credit where credit is due,” Tierney said. “There are a lot of others out there, and they didn’t become the University of Phoenix. He had an American kind of can-do spirit.”
Sperling is survived by his longtime companion, Joan Hawthorne; his former wife, Virginia Sperling; his son, Peter; his daughter-in-law, Stephanie; and his two grandchildren, Max and Eve.
Some people seem to be having a problem with Nick Hanauer. He seems to have pissed off a lot of people, but at the same time, he seems to be talking sense and to have achieved significant traction. This often seems to happen in times of turmoil and change. A multi-millionaire in his own right, but also someone with a profound liberal arts and humanities grounding, Mr. Hanauer has called “foul,” with the behavior of the 1%. I am personally fascinated with people like this, because I sense that Hanauer is somewhat like me. I worked with Ivy League MBA’s at Intel who said to me that they wished that they had my humanities education, while I told them that I wished I had their management education. I now teach management in a prestigious university and can comment intelligently.
Some people seem to be having a problem with Nick Hanauer. He seems to have pissed off a lot of people, but at the same time, he seems to be talking sense and to have achieved significant traction. This often seems to happen in times of turmoil and change. A multi-millionaire in his own right, but also someone with a profound liberal arts and humanities grounding, Mr. Hanauer has called “foul,” with the behavior of the 1%. I am personally fascinated with people like this, because I sense that Hanauer is somewhat like me. I worked with Ivy League MBA’s at Intel who said to me that they wished that they had my humanities education, while I told them that I wished I had their management education. I now teach management in a prestigious university and can comment intelligently.
I admit openly to being a capitalist, but something has gone terribly wrong with our system. I follow the leading global investment banks. I know about Michael Lewis, Liar’s Poker, Flash Boys, LIBOR, foreign exchange fraud, commodity trading fraud, tax evasion for wealthy U.S and German clients, money laundering for drug cartels and ask myself what has gone so terribly wrong. The worst has been Silicon Valley luminary venture capitalists like Tom Perkins, who have become an obscene embarrassment. Some of the wealthy have tried to distance themselves from Mr. Perkins, but actually have their own equivocations for why everyone misunderstands them.
I agree with Mr. Hanauer. The pendulum is swinging back as it always does and unless the rich get on board with ethical reform, the backlash will be harsh.
Super-Rich Guy To ‘Zillionaires’: Back $15 Minimum Wage Or
Prepare For Revolution
Reblogged from The Huffington Post |
A Seattle millionaire is urging his super-rich peers to support a $15 minimum wage or face the possibility of a devastating populist revolt.
In an essay published this week by Politico Magazine, venture capitalist Nick Hanauer warned that the widening income gap in the U.S. would eventually spark a violent revolution.
“No society can sustain this kind of rising inequality,” Hanauer wrote in the piece, shared nearly 200,000 times on Facebook by Tuesday afternoon. “In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out.”
Hanauer, whose fortune ballooned thanks to an early investment in Amazon, first suggested raising the minimum wage to $15 last year in an op-ed published by Bloomberg View.
Hanauer argues in the Politico essay that the trickle-down economics evangelized by conservatives since President Ronald Reagan is “idiotic” and compared it to the way medieval monarchs and rulers claimed their fortune and power was bestowed by higher powers.
“Historically, we called that divine right,” he wrote. “Today we have trickle-down economics.”
That philosophy makes it difficult for middle-class customers to earn enough money to spend on the products people get wealthy selling, Hanauer writes.
“The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were customers, too,” he writes. “Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.”
Hanaeur said inaction by larger companies like Walmart and McDonald’s prove that “we should compel retailers to pay living wages – not just ask politely.”
This year has given Hanauer reasons to feel emboldened. French economist Thomas Piketty struck a nerve with his book on the widening wealth gap, Capital In The Twenty-First Century which skyrocketed to No. 1 on Amazon. Further fueling the fire, the International Monetary Fund last month urged the United States to raise the minimum wage or risk even slower economic growth.
“If workers have more money, businesses have more customers,” Hanauer wrote. “The middle class creates us rich people, not the other way around.”
We all have our own reasons why we stopped teaching. Some are voluntary, others involuntary. John Beck discusses many of the uncomfortable issues of evaluation and faculty politics that get in the way of the joy of teaching
Stanford Graduate School of Business and Harvard Business School are adopting drastically different strategies for delivering business education. These differing strategies are reflected in the debate that has erupted between two of Harvard Business School’s best known professors and their visions for the future of business education, Michael Porter and Clayton Christensen. I have also been personally tire kicking MOOC’s, acting as a mentor for Stanford’s online Technology Entrepreneurship course, hosted by NovoEd. I have been pleasantly surprised by the experience, and among the teams I am mentoring is a group of Xerox senior research scientists acting as an entrepreneurial team.
Harvard Professor Clayton Christensen, author of The Innovator’s Dilemma
Harvard Professor Michael Porter, author of numerous books on Competitive Strategy
Stanford Graduate School of Business and Harvard Business School are adopting drastically different strategies for delivering business education. These differing strategies are reflected in the debate that has erupted between two of Harvard Business School’s best known professors and their visions for the future of business education, Michael Porter and Clayton Christensen. I have also been personally tire kicking MOOC’s, acting as a mentor for Stanford’s online Technology Entrepreneurshipcourse, hosted by NovoEd. I have been pleasantly surprised by the experience, and among the teams I am mentoring, is a group of Xerox senior research scientists acting as an entrepreneurial team.
Christensen predictably argues, as in his most famous book, that in order to survive disruptive change, businesses themselves must embrace disruptive change. Professor Porter on the other hand, argues that an enterprise “… must stay the course, even in times of upheaval, while constantly improving and extending its distinctive positioning.” Ironically, this debate is closely related to my most recent post, and a much earlier post on recognizing “strategic inflection points,” and acting on them.
If any institution is equipped to handle questions of strategy, it is Harvard Business School, whose professors have coined so much of the strategic lexicon used in classrooms and boardrooms that it’s hard to discuss the topic without recourse to their concepts: Competitive advantage. Disruptive innovation. The value chain.
But when its dean, Nitin Nohria, faced the school’s biggest strategic decision since 1924 — the year it planned its campus and adopted the case-study method as its pedagogical cornerstone — he ran into an issue. Those professors, and those concepts, disagreed.
The question: Should Harvard Business School enter the business of online education, and, if so, how?
Universities across the country are wrestling with the same question — call it the educator’s quandary — of whether to plunge into the rapidly growing realm of online teaching, at the risk of devaluing the on-campus education for which students pay tens of thousands of dollars, or to stand pat at the risk of being left behind.
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Harvard Business School faced a choice between different models of online instruction. Prof. Michael Porter favored the development of online courses that would reflect the school’s existing strategy.CreditDavid De la Paz/European Press Photo Agency
At Harvard Business School, the pros and cons of the argument were personified by two of its most famous faculty members. For Michael Porter, widely considered the father of modern business strategy, the answer is yes — create online courses, but not in a way that undermines the school’s existing strategy. “A company must stay the course,” Professor Porter has written, “even in times of upheaval, while constantly improving and extending its distinctive positioning.”
For Clayton Christensen, whose 1997 book, “The Innovator’s Dilemma,” propelled him to academic stardom, the only way that market leaders like Harvard Business School survive “disruptive innovation” is by disrupting their existing businesses themselves. This is arguably what rival business schools like Stanford and the Wharton School have been doing by having professors stand in front of cameras and teach MOOCs, or massive open online courses, free of charge to anyone, anywhere in the world. For a modest investment by the school — about $20,000 to $30,000 a course — a professor can reach a million students, says Karl Ulrich, vice dean for innovation at Wharton, part of the University of Pennsylvania.
“Do it cheap and simple,” Professor Christensen says. “Get it out there.”
But Harvard Business School’s online education program is not cheap, simple, or open. It could be said that the school opted for the Porter theory. Called HBX, the program will make its debut on June 11 and has its own admissions office. Instead of attacking the school’s traditional M.B.A. and executive education programs — which produced revenue of $108 million and $146 million in 2013 — it aims to create an entirely new segment of business education: the pre-M.B.A. “Instead of having two big product lines, we may be on the verge of inventing a third,” said Prof. Jay W. Lorsch, who has taught at Harvard Business School since 1964.
Starting last month, HBX has been quietly admitting several hundred students, mostly undergraduate sophomores, juniors and seniors, into a program called Credential of Readiness, or CORe. The program includes three online courses — accounting, analytics and economics for managers — that are intended to give liberal arts students fluency in what it calls “the language of business.” Students have nine weeks to complete all three courses, and tuition is $1,500. Only those with a high level of class participation will be invited to take a three-hour final exam at a testing center.
“We don’t want tourists,” said Jana Kierstead, executive director of HBX, alluding to the high dropout rates among MOOCs. “Our goal is to be very credible to employers.” To that end, graduates will receive a paper credential with a grade: high honors, honors, pass.
“Harvard is going to make a lot of money,” Mr. Ulrich predicted. “They will sell a lot of seats at those courses. But those seats are very carefully designed to be off to the side. It’s designed to be not at all threatening to what they’re doing at the core of the business school.”
Exactly, warned Professor Christensen, who said he was not consulted about the project. “What they’re doing is, in my language, a sustaining innovation,” akin to Kodak introducing better film, circa 2005. “It’s not truly disruptive.”
‘Very Different Places’
Professor Christensen did something “truly disruptive” in 2011, when he found himself in a room with a panoramic view of Boston Harbor. About to begin his lecture, he noticed something about the students before him. They were beautiful, he later recalled. Really beautiful.
“Oh, we’re not students,” one of them explained. “We’re models.”
They were there to look as if they were learning: to appear slightly puzzled when Professor Christensen introduced a complex concept, to nod when he clarified it, or to look fascinated if he grew a tad boring. The cameras in the classroom — actually, a rented space downtown — would capture it all for the real audience: roughly 130,000 business students at the University of Phoenix, which hired Professor Christensen to deliver lectures online.
Why had his boss, Mr. Nohria, given him permission to moonlight? “Because we didn’t have an alternative of our own” online, Mr. Nohria explained.
The dean had taken a wait-and-see approach — until 18 months ago, when his own university announced the formation of edX, an open-courseware platform that would hitch the overall university firmly to the MOOC bandwagon.
He said he remembered listening to an edX presentation at an all-university meeting. “I must confess I was unsure what we’d be really hoping to gain from it,” he said. “My own early imagination was: ‘This is for people who do lectures. We don’t do lectures, so this is not for us.’ ” In the case method, concepts aren’t taught directly, but induced through student discussion of real-world business problems that professors guide with carefully chosen questions.
“Nitin and I are close friends, and we’ve talked about this repeatedly,” Professor Porter said. “I think the big risk in any new technology is to believe the technology is the strategy. Just because 200,000 people sign up doesn’t mean it’s a good idea.” Though Professor Porter published “Strategy and the Internet” in the Harvard Business Review in 2001, before the advent of MOOCs, the article makes his sternest warning about the perils of online recklessness: “A destructive, zero-sum form of competition has been set in motion that confuses the acquisition of customers with the building of profitability.”
Mr. Nohria ultimately chose for the business school to opt out of edX. But this decision forced a question: What should the school do instead? “People came out in very different places,” Mr. Nohria said. “Very different places.”
One morning, he sat down for one of his regular breakfasts with students. “Three of them had just been in Clay’s course,” which had included a case study on the future of Harvard Business School, Mr. Nohria said. “So I asked them, ‘What was the debate like, and how would you think about this?’ They, too, split very deeply.”
Some took Professor Christensen’s view that the school was a potential Blockbuster Video: a high-cost incumbent — students put the total cost of the two-year M.B.A. at around $100,0000 — that would be upended by cheaper technology if it didn’t act quickly to make its own model obsolete. At least one suggested putting the entire first-year curriculum online.
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On the topic of online instruction, Prof. Clayton Christensen said: ‘Do it cheap and simple. Get it out there.”CreditRick Friedman for The New York Times
Others weren’t so sure. “ ‘This disruption is going to happen,’ ” is how Mr. Nohria described their thinking, “ ‘but it’s going to happen to a very different segment of business education, not to us.’ ” The power of Harvard’s brand, networking opportunities and classroom experience would protect it from the fate of second- and third-tier schools, a view that even Professor Christensen endorses — up to a point.
“We’re at the very high end of the market, and disruption always hits the high end last,” said Professor Christensen, who recently predicted that half of the United States’ universities could face bankruptcy within 15 years.
Mr. Nohria states flatly, “I do not believe our M.B.A. program is at risk.” He concluded that disruption is not always “all or nothing,” and cited the businesses of music and retailing as examples. “In the music business, all record stores are gone,” he said, while in retailing, “it’s not like Amazon has eliminated everything; after those debates, my feeling was that we’re going to be more in that category.”
Still, Mr. Nohria said, he wanted some insurance. “Our beliefs can always turn out to be wrong,” he said. Harvard Business School could not afford to stand on the sidelines. So last summer, he said, he asked the business school’s administrative director, “What would you say if we started a little skunk works around this technology?”
‘Hollywood’ at Harvard
That skunk works, in a low-slung building 300 yards from campus, is not little. It buzzes with 35 full-time staff members — Wharton’s online efforts, by comparison, employ one-half of one staffer, Mr. Ulrich said — who are scrambling to complete a proprietary platform that, after this summer’s limited go-round, could support much larger enrollments.
“Here’s Hollywood,” Ms. Kierstead said on a recent tour, passing an array of video equipment that’s hauled around to film business case-study protagonists on location. Nearby, two digital animators worked on graphics for Professor Christensen’s forthcoming course. Another staff member handled financial aid.
To run HBX with Ms. Kierstead, Mr. Nohria tapped Bharat Anand, 48, a strategy professor who had been researching how traditional media companies have coped, or haven’t, with digital disruption. “I think about those cases a lot,” said Professor Anand, who is also Mr. Nohria’s brother-in-law.
The dean handed him a sheet of six guiding principles, including these: HBX should be economically self-sustaining. It should not substitute for the M.B.A. program. It should seek to replicate the Harvard Business School discussion-based style of learning. This was no easy assignment, Professor Anand conceded.
“What is competitive advantage?” he asked, invoking Professor Porter’s signature theory. “It comes from being fundamentally different. We teach this all the time. But saying it is one thing. Putting it into practice is hard. When everyone is going free, everyone is going with a similar type of platform, it takes courage to do your own thing.”
On campus, Harvard business students face one another in five horseshoe-shaped tiers with oversized name cards. They fight for “airtime” while the professor orchestrates discussion from a central “pit.”
“We don’t do lectures,” Mr. Nohria said. “Part of what had already convinced me that MOOCs are not for us is that for a hundred years our education has been social.”
The challenge was to invent a digital architecture that simulated the Harvard Business School classroom dynamic without looking like a classroom. In a demonstration of a course called economics for managers, the first thing the student sees is the name, background and location — represented by glowing dots on a map — of other students in the course.
A video clip begins. It’s Jim Holzman, chief executive of the ticket reseller Ace Ticket, estimating the supply of tickets for a New England Patriots playoff game: “Where I have a really hard time is trying to figure out what the demand is. We just don’t know how many people are on the sidelines saying, ‘Hey, I’m thinking about going.’ ”
It’s a complex situation meant to get students thinking about a key concept — “the distinction between willingness to pay and price,” Professor Anand said. “Just because something costs zero doesn’t mean people aren’t willing to pay something.” A second case study, on the pay model of The New York Times, drives the point home.
Then a box pops up on the screen with the words “Cold Call.” The student has 30 seconds to a few minutes to type a response to a question and is then prodded to assess comments made by other students. Eventually there is a multiple-choice quiz to gauge mastery of the concept. (This was surprisingly time-consuming to develop, Professor Anand said, because the business school does not give multiple-choice tests.)
At a faculty meeting in April, Professor Anand demonstrated the other two elements of HBX: continuing education for executives and a live forum. He unveiled the existence of a studio, built in collaboration with Boston’s public television station, that allows a professor to stand in a pit before a horseshoe of 60 digital “tiles,” or high-definition screens with the live images and voices of geographically dispersed participants. “I’m proud of our team, and how carefully they’ve thought about it even before they’ve done it,” Professor Porter said.
The Clashing Models
Not everyone was so impressed. Professor Christensen, for one, worried that Harvard was falling into the very trap he had laid out in “The Innovator’s Dilemma.” “I think that we’ve way overshot the needs of customers,” he said. “I worry that we’re a little too technologically ambitious.”
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The dean, Nitin Nohria, found that students were also divided on the issue of online instruction.CreditRick Friedman for The New York Times
He also feared that HBX was tied too closely to the business school.
“There have been a few companies that have survived disruption, but in every case they set up an independent business unit that let people learn how to play ball in the new game,” he said. IBM survived the transition from mainframe computers to minicomputers, and then from minicomputers to personal computers, by setting up autonomous teams in Minnesota and then in Florida. “We haven’t got the separation required.”
Professor Porter has expressed the opposite view. Companies that set up stand-alone Internet units, he wrote in 2001, “fail to integrate the Internet into their proven strategies and thus never harness their most important advantages.” Barnes & Noble’s decision to set up a separate online unit is one of his cautionary tales. “It deterred the online store from capitalizing on the many advantages provided by the network of physical stores,” he said, “thus playing into the hands of Amazon.”
Here is where the two professors’ differences come to a head. In the Porter model, all of a company’s activities should be mutually reinforcing. By integrating everything into one, cohesive fortification, “any competitor wishing to imitate a strategy must replicate a whole system,” Professor Porter wrote.
In the Christensen model, these very fortifications become a liability. In the steel industry, which was blindsided by new technology in smaller and cheaper minimills, heavily integrated companies couldn’t move quickly and ended up entombed inside their elaborately constructed defenses.
“If Clay and I differ, it’s that Clay sees disruption everywhere, in every business, whereas I see it as something that happens every once in a while,” Professor Porter said. “And what looks like disruption is in fact an incumbent firm not embracing innovation” at all.
In other words, it’s not that U.S. Steel was destined to be undone by minimills. It’s that its managers let it happen.
“The disrupter doesn’t always win,” argued Professor Porter, who nonetheless called Professor Christensen “phenomenal” and “one of the great management thinkers.”
Who will win the coming business school shakeout? Professor Porter acknowledged that it’s a multidimensional question.
Most schools offering MOOCs do so through outside distribution channels like Coursera, a for-profit company that has Duke, Wharton, Yale, the University of Michigan and several dozen other schools in its stable. EdX, of which Harvard was a co-founder with the Massachusetts Institute of Technology, counts Dartmouth and Georgetown among its charter members.
“These will come to have considerable power,” predicted Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business. He pointed to the aircraft industry: “In order to get into China, Boeing transferred its technology to parts manufacturers there. Pretty soon there’s going to be Chinese firms building airplanes. Boeing created their own competition.” Business schools, he said, “are doing it again; we are creating our own demise.”
Professors as Online Stars
The worry is all the more acute at midtier schools, which fear that elite business schools will move to gobble up a larger share of a shrinking pie.
“Would you rather watch Kenneth Branagh do ‘Henry V,’ or see it at a community theater?” asked Mr. Ulrich at Wharton. “There are going to be some instructors who become more valuable in this new world because they master the new medium. We’d rather be those guys than the people left behind.”
This raises a still more radical case, in which the winners are not any institution, new or old, but a handful of star professors. One of Professor Porter’s generic observations — that the Internet increases the “bargaining power of suppliers” — suggests just that. “It’s potentially very divisive in a way,” he acknowledged. “We’re all partners; we all get paid roughly the same. Anything that starts to fracture the enterprise is a sobering prospect.”
François Ortalo-Magné, dean of the University of Wisconsin’s business school, says fissures have already appeared. Recently, a rival school offered one of his faculty members not just a job, but also shares in an online learning start-up created especially for him. “We’re talking about millions of dollars,” Mr. Ortalo-Magné said. “My best teachers are going to find platforms so they can teach to the world for free. The market is finding a way to unbundle us. My job is to hold this platform together.”
To that end, he has changed his school’s incentive structure, which, as in most of academia, was based primarily on the number of research articles published in elite journals. Now professors who can’t crack those journals but “have a gift for inspiring learning,” he said, in person or online, are being paid as top performers, too. “We are now rewarding people who have tenure to give up on research,” Mr. Ortalo-Magné said.
Mr. Ortalo-Magné spins out the possibilities of disruption even further. “How many calculus professors do we need in the world?” he asked. “Maybe it’s nine. My colleague says it’s four. One to teach in English, one in French, one in Chinese, and one in the farm system in case one dies.”
What is to stop a Coursera from poaching Harvard Business School faculty members directly? “Nothing,” Mr. Nohria said. “The decision people will have to make is whether being on the platform of Harvard Business School, or any great university, is more important than the opportunity to build a brand elsewhere.
“Does Clay Christensen become Clay Christensen just by himself? Or does Clay Christensen become Clay Christensen because he was at Harvard Business School? He’ll have to make that determination.”
I personally have seen in my past career, and personally experienced how simple humility is a key characteristic of leadership. This may seem counter-intuitive but it is not. People are drawn to the charisma of a leader who is also simply humble, and who appreciates the values of those he or she leads. A leader like that can get subordinates to follow them anywhere. I think there may even be an inverse relationship in human behavior between hubris, and leadership success. By that I mean that the more arrogant and overbearing a person, the more insecure he may actually be, and therefore less successful in the subjective art of leadership.
In a bizarre sequence of events this week, I have yet again witnessed someone literally self-destruct as a leader due to their failure to exhibit simple humility and to be aware of other stakeholders, whose support or not, could make or break the leader.. Successful leadership is a fragile thing, a subjective human experience. I have written about this phenomenon previously on this blog.
I personally have seen in my past career, and personally experienced how simple humility is a key characteristic of leadership. This may seem counter-intuitive but it is not. People are drawn to the charisma of a leader who is also simply humble, and who appreciates the values of those he or she leads. A leader like that can get subordinates to follow them anywhere. I think there may even be an inverse relationship in human behavior between hubris, and leadership success. By that I mean that the more arrogant and overbearing a person, the more insecure he may actually be, and therefore less successful in the subjective art of leadership.
In a bizarre sequence of events this week, I have yet again witnessed someone literally self-destruct as a leader due to their failure to exhibit simple humility and to be aware of other stakeholders, whose support or not, could make or break the leader.. Successful leadership is a fragile thing, a subjective human experience. I have written about this phenomenon previously on this blog.
Tragically, I witnessed this person’s Waterloo in real time, as did many others. It was there for all to see. It is a very serious matter for everyone to consider carefully and to also realize that it will be a terribly hard learned lesson, and life changing experience for the person experiencing it. Fortunately, in my own career, I somehow dodged this bullet and learned the lesson of leadership humility early. Thank you to my early management mentors, colleagues, and Harvard Professor John Kotter.
I make this point because I came across a LinkedIn discussion in the Harvard Business Review group, “What is the most important leadership quality?” Many traits have been proposed in the discussion, the leading ones being integrity, management communication skills, ethics, trust, and humility….