Romney vs. Obama: 14%, 42%, 47%...

Whatever percentage of the electorate Obama needs to win over to stay in office, one thing's for sure: percentages have not been kind to Romney.

Take the 14% he paid in taxes on millions in income. Romney defends by saying that his income was already subject to America's high corporate taxes. It may be unpopular, but he's mathematically in the right here.

Consider two companies. Company A makes $210,000, but pays it all as wages to Al--so it'll make no "profit". The company must pay around 5% in payroll taxes, so Al will get $200k, about 35% of which he'll give back in taxes. Total to (federal, state, local) government: $80,000; total to Al: $130,000.

Company B makes the same $210k but calls it profit, and pays it all to its sole shareholder, Bill (Willard) Mitt Romney. But first it must declare that profit and pay 42% to the government. Then Bill will pay his 10% capital gains tax on the rest. Total to govt: 88.2 + 12.2 = $100,400; total to Bill: $99,600 ($30,000 less than Al, in case you hadn't noticed).

It's hard to feel for the millionaire, but it's clear from these simple sums that America's very high corporate tax rate is unfair and redistributionist (a good illustration of just how much higher it is than other developed countries here: http://www.economist.com/node/21548245), not to mention a drag on the economy and a disincentive to investment, and a driver behind high levels of corporate debt (as interest payments are tax-deductible).

Much was also made of Romney's gaffe-claim that 47% of Americans are takers who enjoy more back than they contribute, and would therefore vote for Obama. Put aside for a moment the insidious class implications of the statement and the sneering contempt for 150m Americans (if you can) and consider this.

If income is taxed equally at all income levels, and the benefits distributed evenly amongst all citizens, then it is a mathematical fact that the lowest 50% on the income scale will get more back out of government than they put in (assuming the government's output is equal to its input) and vice versa the top 50%.

And we know that income is not taxed equally; the top 5% of earners in 2009 paid almost 60% of the nation's federal income tax burden, earning 30% of total income (http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0). Or, put another way, the bottom 95% of earners paid just 40% of taxes, on 70% of income.

Nor are benefits distributed evenly, with those in greater need receiving more--rightly so. (Of course, the government may be destroying value, in which case more of us will get less back than we put in.)

This doesn't excuse Romney's contempt for 47% of Americans, but it does support his claim that those at the top of the income scale are already paying their dues.

I admire Obama as an intellectual and a man, and abhor Romney's arrogance and mendacity. If I was a US citizen I'd still vote for Obama, on character alone, and because I don't believe this anemic recovery needs further cuts in government spending.

But it seems to me Romney's been given a hard time where he had good points. Will points mean prizes? Just three weeks to go before we find out!

Work life imitating fiction?

Devices of literature have real-life applications to working in organizations:

1) The art of storytelling

The way organizations move forward is in large part driven by individuals and teams weaving persuasive stories for each other.  Being able to deftly articulate plot, characters, and events--providing only those details absolutely necessary to the story--is a skill a change agent must have or develop.

2) Suspension of disbelief

Making the case for change, such as a project or a restructuring, involves asking your listeners to cast their minds forward into a possible future.  The storyteller's skill at evoking that future in a way that makes sense to them--so that the "pictures in their mind" are close enough to the ones you have in yours--involves taking the reader / listener / coworker to a fantasy land of what the future could be like.

3) Plotting

Overall plot direction is usually decided through evaluation of alternatives in strategy (plotting) sessions.  This is often best done behind closed doors, to minimize uncertainty to others as all plot alternatives are considered, and to avoid undermining suspension of disbelief.

4) Detailing specifics supports suspension of disbelief

For listeners to pay attention and be taken away by a description of the future, the speaker must articulate clearly and vividly.  Once the course is set, she must confidently translate the arc of the story into immediate actions.  Providing concrete details helps the reader's mind picture that future.  Compare the following two statements, picturing you work for Pam (or Paul):

"We will consolidate Pam's department with Paul's, and create synergies saving the company 10% of it's operating costs two years from now."

"Moved under Paul, Pam's team will eliminate six positions, with affected individuals notified exactly one month from now."

In my experience, most leaders don't do a good job of getting down to the specifics that help the affected individuals to start sketching out their own role in (and reaction to) the storytelling process.

Whether you're a leader or not, you can use some of the same techniques applied over the centuries by Homer, Shakespeare and Joyce to capture your audience's minds and implant in them the pictures they need to help you, follow you, advise you, or give you that important promotion.  Just remember--unless you're actually writing a novel, don't take the "fiction" part too far!

Where does innovation come from?

Is the belief that innovation usually comes from the outside a justified one?  In The Innovator’s Dilemma, ClaytonChristensen suggests some very successful companies have failed because theydon’t have the internal capabilities needed to adapt to disruptiveinnovation.  Armies of frequent-flying consultantswould probably agree on the value of an external perspective.

Another well-known book on the subject, Scott Berkun’s The Myths of Innovation, debunks manycommonly-held assumptions about innovation, for example “Good Ideas Are Hard toFind,” and “The Best Ideas Win.”  Often,the answer was staring you in the face all along; how often we’ve seen inferiortechnology “win” (Beta/VHS; Netscape/IE; Xbox/Wii).  

 “The Best Ideas Win”is an important myth for IT professionals to heed.  Diffusion of innovation is organic andunpredictable.  Important forces at playinclude network effects (the first fax machine?), complementary products (an iPhonewithout apps?), blind luck, and circumstance—and, in the book of (Steve) Job(s), thecustomer not knowing what they want.

If the prospect of being a “trusted advisor” seemsintimidating amidst the uncertainty of customer adoption and the ceaselesspounding of disruptive waves of innovation, then try assuming a position ofprovocative leadership!

Eric Topol’s CreativeDestruction of Medicine illustrates how important a role technology innovation may cometo play for life sciences.  Advances ingenomics, wireless sensors, internet access and computing power—what Topol calls“superconvergence” that will precipitate “the great inflection of medicine”—alreadyimpact how we discover and develop new cures for serious disease.

I must pause and acknowledge the primacy offunctional innovation over IT services innovation.  In the biopharma sphere, discoveringa cure for cancer trumps enabling an exec to run instant messaging on heriPhone.  Even so, if the reason twopreviously unacquainted scientists cross silos and collaborate to produce thatcure lies in inspired innovation in internal social media, wouldn’t that be cool?

Whether scientist or technologist—or both—there may beprinciples of innovation we can all draw upon. JonahLehrer’s New Yorker article on Groupthink provided grist for themill, illustrating (among other things) the role architecture and neighborhood canhave in generating innovation.  Breakingdown silos doesn’t have to be virtual. Sometimes the answer may really be right in front of you—on the otherside of your cubicle wall.

But let’s not ignore opportunities farther afield.  While superior resources and market demand willsupport the continued spread of new technology in the developed world, themother of invention—necessity—is everywhere in poor countries.  A CDC smartphone pilot in Kenya cost just $60,000, an amount most pharma's technology budget could afford  many times over.

Does innovation have to come from the outside?  Probably not--but it does seem to be important to keep an open mind about possible sources of inspiration.

Celebrating business jargon

I recently heard a piece on NPR, with FT columnist Lucy Kellaway, about the meaninglessness of many ubiquitous business phrases.  As self-appointed author of the Guff Awards, Lucy made some great and funny observations about dubious business usage of the English langage, like the ubiquitous phrase, "going forward."

I agree businesspeople speak far too much in the abstract, leaving their listeners wondering what the hell they're talking about--the cure for which can be found in Dan & Chip Heath's "Made to Stick", a great practical guide for anyone that has to communicate regularly in organizations.  The Heath brothers discuss Elizabeth Newton's Tappers & Listeners study, in which subjects were challenged to tap out a famous tune for a listener to guess.  The study showed that the tappers grossly overestimated the chances that listeners would correctly guess what they were tapping--a phenomenon that illustrates well the difficulty of communicating with others.

In Wharton professor Stuart Diamond's "Getting More", Diamond discusses the importance of "getting to" the pictures others have in their heads.  When I speak, I'm trying to use language to magically conjure the picture in my head in the heads of others.  Since I will always fail to some degree, understanding what is the picture is in their head is key.  The Heaths would, amongst other things, tell you to speak in specific rather than broad terms ("for the next year," vs. "going forward").

But I would like to very briefly stand up in defense of three kinds of universal business metaphor:

1) Sports - "Skating to where the puck is going to be"--Apparently a Wayne Gretsky quote, perhaps popularized as a business phrase by Steve Jobs, this colorful metaphor reflects not just the fact that competing in business involves chasing a moving target, but also that moving your organization is going to take time and effort, so staying one step ahead of--and occasionally stepping around--the competition is essential.

2) Driving - "Moving the needle"--For non-American speakers, the needle in question is the indicator hand of the speedometer--not to be confused with unrelated sewing or nursing analogies!  Frequently used in "what it'll take to move the needle," a phrase that efficiently evokes the value of achieving an incremental improvement in cycle time, and the need to quantify the required change in input to achieve that improvement.

3) Gastronomy - "Eating (someone else's) lunch"--I'm not sure I ever fully understood this phrase until I read in today's New York Times: "'Android and Apple together are eating BlackBerry’s lunch,' said Frank Gillett, a Forrester analyst."  The idea that you can do the hard work of packing your lunch and bringing it to school--in this case, creating the smartphone market--only for someone else to take away your rewards--is both insightful and motivating.

American business culture is full of these colorful metaphors.  I admit that, as an outsider, some of them can be confusing (I still have no idea what motherhood and apple pie is a reference to, and am about to go look it up!)  But if a picture paints a thousand words, then metaphors are a few words with the power of evoking a vivid picture in someone else's head.  Going forward I will aim to use them more!