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strategy and business
 / Spring 2005 / Issue 38(originally published by Booz & Company)


Point or Shoot

In fact, Mr. Atkinson bundled several of his interviews with designers and design consultants such as Don Norman into a commentary package critiquing The Cognitive Style of PowerPoint. (There’s no interview with Professor Tufte himself on the site.)

Other interviews feature well-regarded PowerPoint presenters explaining how they blend the software with their personal presentation style. Stanford University intellectual property guru Lawrence Lessig, for example — who’s argued copyright law before the Supreme Court — has a reputation as a PowerPoint performer par excellence.

Atkinson: How would you describe your own approach toward PowerPoint? How is it different from other PowerPoint approaches you’ve seen?

Lessig: I use the screen to frame what I am saying. One word, or a few words, so that the audience sees what they are hearing. But I never allow the screen to compete with what I am saying. I want them to be focusing on my words, not on PowerPoint graphics. So the word(s) on the screen help them tune into the words on the stage. Plus I use it to demonstrate abstract ideas, with drawings or moving objects. And it is brilliant for clips, etc.

Yes, 2x2s feature prominently in several interviews. But the larger theme emerging from the site is how hard people are struggling to simultaneously make themselves better understood and more persuasive. An overreliance on PowerPoint is as unprofessional and unappetizing as the arrogant belief that one’s unassisted natural charisma is more than enough to charm an audience. An unwillingness — or inability — to creatively frame an innovative context for new ideas may undermine the credibility of otherwise persuasive data.

In other words, words aren’t enough. They’re a necessary but insufficient ingredient to fill in the persuasion palette. Rhetoric requires art and craft, as well as rigorous thought. For the foreseeable future, corporate rhetoric will be a product of and partner with technology.

Aristotle might not approve, but he would surely understand. And, just maybe, he would devise an appropriate 2x2 to explain technology’s impact on rhetoric’s future.

Reprint No. 05110

Author Profile:

Michael Schrage ([email protected]) is codirector of the MIT Media Lab’s e-Markets Initiative and a senior advisor to the MIT Security Studies program. A contributing editor to strategy+business, Mr. Schrage is the author of Serious Play: How the World’s Best Companies Simulate to Innovate (Harvard Business School Press, 1999).

Knowledge Review/Books in Brief
by David K. Hurst

Juice: The Creative Fuel That Drives World-Class Inventors
By Evan I. Schwartz
Harvard Business School Press, 2004
238 pages, $24.95

Evan Schwartz, a contributing writer for MIT’s Technology Review and a former editor of Business Week, combines his extensive knowledge of invention processes with the results of numerous interviews with world-class inventors. He takes us beyond homilies to a new level of understanding of how invention happens and shares specific practices that lead to successful inventions.

Mr. Schwartz’s heroes are the contemporary stars of American invention. They range from Woody Norris, one of the inventors of ultrasound devices, to Geoffrey Ballard, who pioneered the use of fuel cells for automobiles. Also making reference to such giants of invention as Alexander Graham Bell and Thomas Edison, Mr. Schwartz devotes each of the book’s 11 chapters to a different dynamic.

The book emphasizes the cognitive processes and experiences of individuals more than the social contexts and the communities that support them. World-class inventors, Mr. Schwartz concludes, are adept at creating possibilities, finding interesting problems, and recognizing patterns. Often they have favorite frameworks developed from past experience that enable them to see situations in novel ways. He believes in the theory that the best inventors come up with lots of ideas knowing they can throw away the bad ones. Another familiar theme he highlights: Inventors eventually achieve success by failing repeatedly. One inventor’s “Frog Award” for failure is based on the familiar adage “you have to kiss a lot of frogs before you find a prince.”

Although chance is always in play, these inventors seem to maximize their luck by putting themselves in the right places at the right times. Their explorations often transcend boundaries between disciplines. For example, inventors are uncanny detectors of barriers to progress. They are prolific users of analogies — often drawn from nature — and many are visual thinkers, preferring images to words. They are highly skilled at weaving multiple insights into a systemic whole.

The stories of the inventors and their inventions are fascinating and a delight to read. Yet the ingredients of their “juice” are a bit mysterious. Are they all drinking the same potion? And just how transferable are these insights to an organizational context? These inventors seem to slip out of any constraints they don’t like. Thus managers reading this book may be concerned that they are looking at the inventor’s equivalent of the Kama Sutra — exciting to read, and intriguing to think about, but very difficult to perform.

The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations
By James Surowiecki
Doubleday, 2004
296 pages, $24.95

Crowds have a poor reputation for being smart, but James Surowiecki, a staff writer for The New Yorker, is determined to change that perception. In The Wisdom of Crowds, he has written a dense but highly readable account of the contexts and conditions under which collective wisdom can exceed that of individual experts. His objective is to change the way we think about and use what he calls well-organized “collectivities.”

Mr. Surowiecki begins by tackling the theory of group decision making, focusing on three kinds of problems: cognitive problems, which have or could have clear solutions (such as “Who is going to win the presidential election?”); coordination problems, or how people can coordinate their behavior; and cooperation problems, meaning how self-interested, often distrustful, people can work together.

In all three situations, the author shows, collective wisdom can be effective when certain conditions are met. First, the group must embody a diversity of opinions, and individuals must be independent — i.e., not overly concerned with what their colleagues are saying. Second, the group must be decentralized so that people can specialize and use local knowledge. Third, there must be a means to aggregate private judgments into a collective decision. When any one of these conditions is not present, the wisdom of collectivities begins to decline rapidly, and, in extreme cases, it can deteriorate into mob behavior.

In the practical second half of the book, the author cites numerous case studies to illustrate effective and ineffective ways of using collective wisdom. Readers who are managers will be interested in the operation of so-called decision markets. These are new information markets where contracts are traded on the outcomes of uncertain events, such as political elections. The Iowa Electronic Market, one of the first of this kind, has generally outperformed major U.S. public opinion polls. (In the 2004 presidential election, its prediction of President Bush’s winning margin of 51.5 percent to Kerry’s 48.5 percent was remarkably close to the actual result.)

Mr. Surowiecki suggests that similar well-constructed markets and communities that are facilitated by the Internet could be used to do everything from forecasting sales of new products to building robust software — think Linux versus Microsoft. (See “A Bull Market in Market Research,” by Ely Dahan, s+b, Second Quarter 2002.)

His is a fresh take on this emerging idea of the power of group thinking and decision making. Others have written extensively about many of the ideas Mr. Surowiecki discusses in his book, such as how networks work, the value of group intelligence, and the management of complexity. But when the future and, indeed, the present are as uncertain as they are today, executives need all the help they can get. The Wisdom of Crowds is a valuable and rich resource.

The (Mis)behavior of Markets: A Fractal View of Risk, Ruin, and Reward 
By Benoit Mandelbrot and Richard L. Hudson
Perseus, 2004
328 pages, $27.50

The Sterling Professor of Mathematical Sciences at Yale University, Benoit Mandelbrot, is a mathematical genius who has transformed our understanding of nature with his work on fractal geometry. Now, together with Richard L. Hudson, former managing editor of the Wall Street Journal’s European edition, he turns his powerful analytical skills on markets and how they behave, or rather, don’t behave. In The (Mis)behavior of Markets, the two men challenge the fundamental assumptions that underpin modern financial theory. Their objective is bold; they want to change the way people think and to reform practice.

Modern financial theory, Professor Mandelbrot and Mr. Hudson contend, seriously underestimates risk. To support their case, they use evidence both from Professor Mandelbrot’s studies of long-term prices for commodities like cotton and from recent volatile episodes in financial markets. Among the most notorious of recent examples is the 1998 failure of Long-Term Capital Management LP, which, after several years of stellar returns, collapsed when Russia defaulted on its bonds and the fund was unable to liquidate its positions.

According to modern finance theory, which looks at risk through the lens of the normal, or bell curve, distribution, the probability of an event like Russia defaulting on its debt was infinitesimal. Yet it happened. Professor Mandelbrot and Mr. Hudson argue that the reason such events occur more frequently than theory predicts is that the assumptions of modern finance theory are not borne out in the real world of financial markets.

The mathematics supporting the authors’ conclusions are arcane and the statistical evidence is complex, but they have done a fine job of making their arguments and evidence accessible to the lay reader. Risk management has been a hot topic in both the corporate and financial worlds recently, and, for many practitioners, modern financial theory has been an article of faith on which their risk management strategies have been built. It is a disturbing (and heretical) thought that the elegant mathematics of risk and the precision of risk measurement might be dangerous illusions.

Bad Leadership: What It Is, How It Happens, Why It Matters
By Barbara Kellerman
Harvard Business School Press, 2004
282 pages, $26.95

The concept of leadership has come into its own over the past 25 years, and the term itself has become imbued with almost magical powers. Certainly in Western management thought, leadership is broadly regarded as a good thing. Indeed, some who write about leadership have refused even to acknowledge that malignant characters like Adolf Hitler who are powerful and effective in achieving malicious ends are leaders.

Bad Leadership is a timely reminder that leadership is not unilaterally good. The same dynamics between leaders and followers that can catalyze cooperation toward the common good can also result in evil outcomes.

Barbara Kellerman is research director of the Center for Public Leadership and a lecturer in public policy at the Kennedy School of Government at Harvard University. In this book, she outlines a continuum of bad leadership ranging from the incompetent to the unethical, devoting a chapter to each of seven stages along this continuum. Her examples of bad leaders are drawn from a broad selection of business and political figures.

Writing about leadership often overemphasizes the role of leaders and underplays the importance of the roles of followers and the overall contexts in which leaders and followers interact. Dr. Kellerman avoids this trap by emphasizing that bad leaders are almost invariably accompanied and supported by bad followers — people who acquiesce in actions they know to be wrong because their own needs are being met. These followers can vary in the degree of their support for bad leadership, ranging from apathetic bystanders to acolytes and “evildoers.” Certainly context explains a lot about why this happens. In retrospect, it seems obvious that during the late 1990s economic boom, the “everybody else is doing it” excuse for accounting chicanery contributed to a rash of poor leadership decisions.

Tales from hell are usually more compelling to listen to than stories of heaven, and the accounts of bad leaders in this book are engaging. The question is: So what? How does one turn these accounts of bad leaders, bad followers, and the circumstances that created them into guidelines for action and change? Although Dr. Kellerman recognizes that there are no easy answers, her self-help advice directed at individual leaders and followers falls into the true-but-not-very-helpful category. That is, those who can benefit from it are unlikely to be bad leaders or followers in the first place. But if this book can function as an antidote to the golden aura with which leadership has become endowed, it will have served some purpose.

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Corporate Rhetoric Resources:
Works mentioned in this review

  1. Alex Lowy and Phil Hood, The Power of the 2x2 Matrix: Using 2x2 Thinking to Solve Business Problems and Make Better Decisions (Jossey-Bass, 2004), 352 pages, $45.00
  2. Edward R. Tufte, The Cognitive Style of PowerPoint (Graphics Press, 2003), 28 pages, $7.00
  3. Cliff Atkinson, Sociable Media, Click here.
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