In reality, few geniuses did it alone. Perhaps none.

Genius

[Via Dave Winer's linkblog feed]

The End of ‘Genius‘.

[More]

Edison was wrong. Or at least the picture is. He was not a solitary genius working by himself, alone in the lab. He had the help of many, many others.

The perspiration did not come only from Edison. It came from over 200 researchers working on his ideas. The number should be 0.5% inspiration (his) and 99.5% perspiration (theirs).

One of the great debates between those who are of the Age of Reason and those of the Romantic: does genius come from the friction between individual drive and social requirements or does it come fully formed from the natural state of a solitary human?

Data supports the former view.

We all live in a social setting and almost all the things we call genius came about through discussions, debates and simple interactions in a community. Even if that community is a simple pair of people.

The idea of a solitary genius was  a construct of the romantics, an authoritarian group that arose as a reaction from the distributed democracy of the Age of Reason. The latter based itself on logical actions of the head – that Nature could be understood – giving us social changes embodied in things like the Declaration of Independence and the Industrial Revolution

The former based itself on the emotional affairs of the heart – that Nature could simply be observed, never understood – giving us artistic changes embodied in people such as Coleridge and Beethoven. The latter championed the connectedness of people, while the former championed the uniqueness of a solitary genius.

Recent research suggests the view of the romantic does not actually match reality; that every genius stood on the shoulders of giants; that social interaction drove and modified the results of a genius; that we often only know of genius because of the very same social interactions that romantics try to pretend are not there.

So why do we continue to support, if not actually require, a view that a single person can drive creativity by themselves, that they  can innovate alone?

I would suggest that we seek a balance – the fame of the individual against the anonymity of the group.. While we value the importance of community, we desire to be seen as more than a node in a network. Things move ahead because a small group (perhaps staring with a single person) change the way a community acts. It is the friction of the individual drives and the community needs that produce the best solutions.

A creative individual alone does nothing. A community without creativity  does nothing. A successful society requite both innovative individuals and communities that value innovation. They need both the head of Reason and the heart of Romantics.

In the end, though, we are social animals and everything needs to be seen through the prism of communities of humans.

As the article states: 

This is just one piece of an impressive body of research in social psychology and the new field of social neuroscience, which contends that individual agency often pales next to the imperatives of a collective.

Or, writing at the beginning of the Age of Enlightenment, from Thomas Done:

No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were: any man’s death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bell tolls; it tolls for thee.

[…]

If a man carry treasure in bullion, or in a wedge of gold, and have none coined into current money, his treasure will not defray him as he travels. Tribulation is treasure in the nature of it, but it is not current money in the use of it, except we get nearer and nearer our home, heaven, by it. Another man may be sick too, and sick to death, and this affliction may lie in his bowels, as gold in a mine, and be of no use to him; but this bell, that tells me of his affliction, digs out and applies that gold to me: 

 We are all connected. No one does everything by themselves.

A treasure that exists only for one person has no value. What a genius provides must be valued by a community, otherwise it is no treasure.

 



Balance – we need both authoritarian hierarchies and distributed democracies

 [Crossposted at SpreadingScience]

 Complexity of Life

How do we shift to a more agile organization? Podio a Case Study
[Via Robert Paterson's Weblog]

Most people would agree that many organizations today are too stiff, too slow and too disconnected to do well in the complex world we live in now. 

Whymachineorgscannotcope

Many large organizations have placed their bet on a new technology platform that will connect all their people’s work. Some think that real change can only come from the bottom up. Many feel that any form of hierarchy is outdated. Some talk about culture but are not clear about what this means.

Few are making any progress. So what is the better way to go? 

[More]

Great discussion. We are out of balance dealing with complex problems because authoritarian hierarchies –so important for 20th century processes – are seen as the only way to get things done.  Maybe for simply processes but not the complex ones facing us.

Distributed democratic approaches using social networks are all the rage. For the first time in 10,000 years we have major tools that leverage these inherent activities of humanity’s culture. They can now overpower hierarchies especially when examining complex processes.

But, they alone cannot solve what we face. Disctibuted democracy is great at cranking the DIKW cycle to get to knowledge. The problem arises because they often want to keep turning the cycle than actually take an action.

They can spend too much time talking and not enough time doing. I’ve written about the need for a Synthetic Organization, one that is leader-full bit leaderless. 

We need some aspects of hierarchy to get things done. It is finding the right balance, designing feedback to permit leader-full approaches to survive while preventing the accretion of power that hierarchies can produce.

I have worked at organizations that found the right balance. We just did not have a firm understanding of why it worked.

Now we are getting much closer to defining how to create the balance between the two key aspects of human social interaction – authoritarian hierarchy and distrubuted democracy.

The groups that accomplish this will be the ones that truly helpus solve complex problems.

UC opens access to new scholarly papers

science journalsby moonlightbulb

University of California to allow open access to new academic papers
[Via Ars Technica]

The University of California—an enormous institution that encompasses 10 campuses and over 8,000 faculty members—introduced an Open Access Policy late last week. This policy grants the UC a license to its faculty’s work by default, and requires them to provide the UC with copy of their peer-reviewed papers on the paper’s publication date. The UC then posts the paper online to eScholarship, its open access publishing site, where the paper will be available to anyone, free of charge.

Making the open access license automatic for its faculty leverages the power of the institution—which publishes over 40,000 scholarly papers a year—against the power of publishers who would otherwise lock content behind a paywall. “It is much harder for individuals to negotiate these rights on an individual basis than to assert them collectively,” writes the UC. “By making a blanket policy, individual faculty benefit from membership in the policy-making group, without suffering negative consequences. Faculty retain both the individual right to determine the fate of their work, and the benefit of making a collective commitment to open access.”

[More]

Open access fits the needs for almost all concerned. Researchers have more people read their work. The public is more able to read that work. Information flow increases.

And this apparently cover everything, even those not funded by the government. It will be interesting.

A win-win for us all.

Monsters University reflects what is really happening.

monsters universityby RJ Bailey

Monsters University: the Aftermath
[Via Crooked Timber]

Monsters University, the prequel to Monsters, Inc, opened this weekend. I brought the kids to see it. As a faculty member at what is generally thought of as America’s most monstrous university, I was naturally interested in seeing how higher education worked in Monstropolis. What sort of pedagogical techniques are in vogue there? Is the flipped classroom all the rage? What’s the structure of the curriculum? These are natural questions to ask of a children’s movie about imaginary creatures. Do I have to say there will be spoilers? Of course there will be spoilers. (But really, if you are the sort of person who would be genuinely upset by having someone reveal a few plot points in Monsters University, I am not sure I have any sympathy for you at all.) As it turned out, while my initial reactions focused on aspects of everyday campus life at MU, my considered reaction is that, as an institution, Monsters University is doomed.

[More]

Read the entire post first.

While written in a satirical style, the post holds some real insights. Higher education is being tremendously disrupted and is dealing with that disruption poorly.

Here is the key point that the movie demonstrates (spoilers).

Our heroes are expelled from Monsters University – whose reason for existence is to train and certify employees who can produce the power needed to run their society by inducing fear into children.

They then get a job at Monsters Inc and rise to be the foremost employees at the company, even though they do not bear the proper certifications. Then, in an act of total disruption they discover a new source of almost unlimited power – laughter.

Here is how the post puts it:

The consequences for Monsters University are obvious, and chilling. Two expelled former students have gone on not only to rise to a level of occupational success that ought to be impossible without an MU credential, but have discovered new fundamental facts about the world that completely undermine the knowledge base of Monsters University as an institution. It’s as if Jobs and Wozniak were also Fleischmann and Pons. The School of Scaring, which we hear early on is the “crown jewel” of MU, is now completely outmoded and also, surely, entirely delegitimated.

Why should this institution of higher learning exist if its training is no longer relevant. It has spent all its energies on a School for Scaring. How will it deal with the new disruptive needs for Laughter Learning?

This is a simpler version of what is really happening. Massive Open Online Courses are opening up learning to anyone and producing education with an entirely different system of credentials than a simple BA.

We are seeing High Schoolers who are producing innovations that already have the interest of large companies, perhaps willing to hire their creativity directly without the need for college.

The latest winner of the Intel Science Talent Search actually is developing a new source of energy – algae that produce oil. She did all the work in a homebuilt lab. Another student built a cheap pulsed plasma device, bringing this technology to the masses.

And it is not only from America. At the recent  Intel International Science and Engineering Fair, a student from Romania figured out a way to accomplish for $4000 what cost Google over $70,000.

Either of these kids could simply work for a lot of money or even attarct capital to start their own. All without needing a certificate from a University.


The ability of boys to control their behavior may be determined by social processes, not genetics

kindergartenby 55Laney69

Boys Aren’t Necessarily Wilder
[Via Discovery News - Top Stories]

It’s a common stereotype, enforced by anecdotal evidence in classrooms across America: Boys are wild and impulsive, while girls have much more self-control.

But it doesn’t have to be that way. In three Asian countries, a new study found, there was no difference in how well little boys and girls regulated their own behavior.

The findings might help boost the performance of boys in American school settings with a focus on on self-regulation, which describes a child’s ability to control his or her impulses, follow directions and stay on a task.

[More]

 In the US, boys have a harder time with self-control that girls.Yet in several Asian countries there is no difference – both boys and girls can control themselves equally using objective testing.

And this does not seem to be caused by the expectations of teachers because in both America and in Asia, teachers believe that girls are better than boys.

So in different societies, adults state that girls can control their behavior better than boys. But when objective tests are done, it turns out that only one of the countries is right – America. 

This suggests that the ability to self-regulate is not determined by sex and that both sexes are equally able to accomplish this. So it is not genetic. It can be controlled by social norms.

Yet, it is not the social norm of teachers that is working here, since the teachers in all the cultures see a difference, even when it does not exist.

What is important is that self-regulation is important for academic achievement. The ability for boys to self-regulate in Asian cultures may be one reason for educational prowess.

Now, this study looked at kids from 3-6 years old, so things could change a lot after several years of schooling – and the pressure of teacher’s expectations.

But for young kids, it looks like there are other social constraints that determine the ability to regulate. I’d suggest the parents, not too surprisingly. It will be interesting to find out if the ability for boys to control themselves is also present at older ages.

High Touch Engagement – an idea whose time is coming

wallby easylocum

They just feel threatened by a change agent
[Via Unqualified Offerings]

By Thoreau

Yesterday, while talking to a colleague who’s more enthusiastic about online classes than I am, I promoted High Touch Engagement by noting that I just had a research article accepted with three undergraduate co-authors, describing a project they did with me.  I noted that this sort of thing cannot be scaled into the traditional factory model of the online class.  This person’s very defensive, reactionary reply was “There’s more that you can do with a MOOC than just lecture.”  Silly traditionalist, clinging to last year’s buzzword.  It’s not about online lectures vs. online interactive activities or whatever.  That is an outdated paradigm.  The traditional MOOC model is a factory that focuses on massive dissemination of known ideas, while High Touch Engagement is about the creation of new knowledge through research projects mentored in small, supportive groups with expert role models.  This is a transformational new concept, and any institution that doesn’t want to be left in the dust will have to embrace High Touch Engagement.  How else we can move more people into the STEM pipeline without intensive mentoring on research projects?

[More]

I’m already working on this but with a different name. And it will not be housed inside traditional academic walls but will exist in a public space open to all. It will remove barriers that separate science from society.

I hope to have more coming in the next few months.

Like Big Pharma, Big Edu is at the end of its exponential curve

college

Should you pay $250K to go to college?
[Via PandoDaily]

I was talking with my brother recently about higher education. We both struggled our way through school, barely able to afford our approximate $40,000 in tuition and expenses over the four years (he at a state school, me at Fordham University).

Now his son has been accepted to a bunch of amazing schools, and we discussed a $250,000 four-year bill. Yep, 20 years after we graduated, the same set of schools cost six times as much.

Which leads to the question parents are faced with today:

Is college worth the money?

The answer? No, it’s not enough value for the money.

In my estimation, college is worth it if you have a ton of money and don’t care about ROI, or if you can pay less than $50,000-$75,000 and get a job with starting pay of $50,000 or more (generally technical, trade or finance work). At $100,000-$250,000, it’s simply foolish.

Why would anyone spend $250,000 to prepare for a job market in which the average salary for graduates who get a job and work in their specific field is — wait for it — $44,000. At $44,000 a year, sure you’ll be able to live independently, but you’ll never be able to pay back the loan. With $2.5,000-3,000 a month post-tax, you have about $100 a day to live. If about 50 percent goes to rent, you’re gonna have $50 a day to eat, be clothed and take mass transit. It’s totally possible, and I did it for years — but you’ll never pay the $500-$1,000 a month loan down. Never.

But the kicker is that the $44,000 metric above is employer side and doesn’t take into account the reported 60 percent of folks who can’t get a job in their major.

Ouch!

Said another way, folks who get jobs are hopelessly behind, while those who don’t get jobs are, ummm, well what exactly happens if you don’t get a job and still have loans? I guess you go bankrupt, have your credit ruined for a decade and some amount of the debt is forgiven, right?

Wrong.

Turns out you can’t have your student loans discharged in bankruptcy, except in a situation where “repaying the loan would create an ‘undue hardship’ on the student.”

[More]

An important paper for me was one written by Bernard Munos in 2009 entitled “Lessons from 60 years of pharmaceutical innovation“. It had this astounding figure, looking at the costs to create a new drug:

costs

The costs to develop a new drug have been going up exponentially  since the 50s. They increase about 13% a year.

No exponential curve can last forever. We are now entering the period where it could cost $3-5 billion to develop a new drug. Only diseases that can support those huge development costs can be researched. 

And we have just about found them all. So now, we are seeing that new therapies require huge costs to support, with new drug prices increasing to meet the costs of development.

The costs of new drug development are now pricing Big Pharma out of the ability to create new drugs. An exponential curve cannot sustain itself.

In a similar fashion, Big Edu is pricing itself  out of education. There is less and less reason to spend big bucks for a college education. That money will simply never be paid back.

Yet, there are large benefits to society for well-educated citizens. The need for education will not go away.

The hallmark of this age is that people can route around the gatekeepers and find solutions for their needs. The Industrial Age approaches that create these death spirals of exponential growth will simply not match Information age approaches.

It will be exciting times for anyone not directly tied to Big Edu.

Quiet spaces

[Crossposted at SpreadingScience]

solitideby ajari

Five Collaboration Tips from Introverts
[Via Greater Good]

In her new book Quiet: The Power of Introverts in a World That Can’t Stop Talking, attorney Susan Cain pits two starkly different work styles against each other. On one side, we have the pro-collaboration, open workspace plan camp. On the other, we have the solitude-is-good supporters clamoring to keep their offices. This debate on the best type of work style has important implications for workspace design and office environment. It also delves into fundamental questions about human nature. While we are social animals, drawn instinctively to work and cooperate with others, we are also territorial creatures who enjoy and guard our personal autonomy.

[More]

It is important to realize that extraverts should not dominate collaborative processes and that introverts need their space. Classically, extraverts need to speak in order to think. Introverts need quiet and time in order to think.Either does very poorly if kept fully in the other’s environment.

Yeah! Denialist is now officially a real word

crossby Johan J.Ingles-Le Nobel

W00t! The OED Catches Up With the Rest of Us
[Via Discoblog]

Last week, the new edition of Concise Oxford English Dictionary—the user-friendly version of the massive, encyclopedic guide to Englishdebuted with 400 new words, many of them not unknown to those of us here on teh Interwebs. Here’s a selection of the goodies:

cyberbullying: n. the use of electronic communication to bully a person, typically by sending messages of an intimidating or threatening nature.

denialist: n. a person who refuses to admit the truth of a concept or proposition that is supported by the majority of scientific or historical evidence.

domestic goddess: n. informal a woman with exceptional domestic skills, especially cookery.

jeggings: pl. n. tight-fitting stretch trousers for women, styled to resemble a pair of denim jeans.

retweet: v. (on the social networking service Twitter) repost or forward (a message posted by another user). n. a reposted or forwarded message on Twitter.

sexting: n. informal the sending of sexually explicit photographs or messages via mobile phone.

woot: exclam. informal (especially in electronic communication) used to express elation, enthusiasm, or triumph.

One quibble: we would have included the alternate spelling of “woot,” the alphanumerical mashup “w00t.” As the evolution of the term from

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And a key aspect of a denialist, as opposed to a skeptic, is that they really can not ever admit the truth of a concept because to do so would undermine their view of the world around, disrupting so many rules of thumb and heuristics as to make living quite difficult.

A fundamentalist who believes in the inerrancy of the Bible has to deny evolution because to do so would strike at the very foundations of their religious beliefs.

This is not a skeptical view but a denialist one. A skeptic is not afraid of the ramifications of the concept on their own view of the world. A denialist is.


Where the App economy began

[Crossposted at SpreadingScience]

appby merfam

The Class That Built Apps, and Fortunes
[Via NYT > NYTimes.com Home]

In 2007, the “Facebook Class” at Stanford created free apps for millions of users. But it also fired up the careers of many students and pioneered a new model of entrepreneurship.

[More]

I was at a meeting in 2008 where this class was first described. It was so fascinating I took no notes. Here is what I wrote afterwards:

I just listened to most of this (no notetaking) because it was just an incredible story. some good lessons. Many crummy trials better than deep thinking. Students that shared the most were also at top of lists of apps.

Generated close to $1 million in revenue, several companies started, etc.

Novelty is not best approach. Sometimes best to copy what is out there. Today’s metrics are not the best.

You can LEARN to create a winning app. many stanford’s teams were successful.

Used chaos cycle – trials, evaluate, assets, inspire, trials. Faster could run cycle, faster reached peak. like evolution.

Mass interpersonal persuasion now possible. Created $10 million in value in 10 weeks.

Better to have a rapid development cycle than think things fully through. The ones who shared the most made the most.

Rapid development cycles. Thse that share the most made the most. Learn what works instead of just decide before. Use chaos to your advantage.

What these students found in 2007 is now a part of the economy. Just look at the App Store. This approach to business will expand to many other areas.

Rapid cycles of learning and knowledge will produce better decisions.

The management style of Steve Jobs

[Crossposted at SpreadingScience]

mac os xby bizmac

How Mac OS X Came To Be [Exclusive 10th Anniversary Story] | Cult of Mac
[Via Cult of Mac]

Mac OS X celebrates its tenth birthday today. The groundbreaking operating system was introduced to the public on March 24, 2001. Mac OS X helped reverse Apple’s fortunes in the desktop PC market, and has underpinned a lot of Apple’s subsequent success. Most importantly, it spawned iOS, which runs today’s iPads and iPhones.

Below is the story of how OS X’s game-changing interface came about. The story gives some insight into corporate creativity at Apple. OS X’s interface started as a side project. But as soon as Steve Jobs got wind of it, it was fast-tracked. Jobs became intimately involved in its development — a scary prospect for the programmers working on it.

[More]

There are some great insights throughout the article. One is his abrasive manner, something like a drill sergeant. It seems that he is really interested in how people respond to really withering criticism. In one, the interface designer had provided some mockups for a new Mac interface at a retreat where he was pretty much laughed at because the work would be too hard.

Two weeks later [after a presentation on some of his interface ideas] Ratzlaff got a call from Steve Jobs’s assistant. Jobs hadn’t seen the mockups at the off-site—he hadn’t attended—but now he wanted a peek. At the time, Jobs was still conducting his survey of all the product groups. Ratzlaff and his designers were sitting in a conference room waiting for Jobs, when he walked in and immediately called them “a bunch of amateurs.”

“You’re the guys who designed Mac OS, right?” he asked them. They sheepishly nodded yes. “Well, you’re a bunch of idiots.”

 

Think about that. The head of the company calls a meeting with your group, walks in and calls you names. How would you you respond?

Jobs reeled off all the things he did not like in the about the interface, mostly things that he did not like about Ratzlaff’s area. But Ratzlaff had a key insight: “I figure he’s not going to fire us, because that would’ve happened already,.”

They picked themselves up and began to figure out how to succeed. They stood their ground and fought for their ideas. Jobs had seen the mockups so he knew what these guys could come up with interesting ideas. But he had to know if they would be capable of actually implementing them. How hard would they fight for them, especially if he provided his support? If he gave them a lead, would they fight to get these ideas implements – which would take a huge amount of work – or fall back into the safety of committees, as so often happens. That is what this meeting was about.

And Jobs was satisfied. For the moment. All the guys knew that they now needed to implement these ideas. They worked for three weeks, at all hours, to make mockups of what they could do. When Jobs looked at the work, he gave them the whole afternoon with him. That is simply a huge amount of time for a head of a company to give to a project that was so young. Jobs’ insight was to realize the huge importance for the company if they got the interface right. This is what people would actually see, not all the great stuff under the hood. Instead of grafting on the old interface – which is what Apple had been doing – he wanted a whole new one.

After an afternoon, he knew it could be done. During this meeting, he told Ratzlaff, “This is the first evidence of three-digit intelligence at Apple I’ve seen yet.”

From idiots to geniuses in 3 short weeks. That is how you respond to the demands of a leader like Jobs.

Not all leadership styles could be the same as Jobs’, not should they be. But the underlying point for really creative people is this: Nothing less than the very best should be acceptable. How you motivated creative talent to do that may differ but that motivation needs to be there.

I wrote about this when I discussed Edward Tufte. He was talking about the Macintosh and Windows interfaces. He revealed why the design of the Mac was so much better than Windows. I wrote:

Tufte was discussing the different interfaces between the Mac OS and Windows. After going through a lot of the pluses he saw in the Mac and a lot of the minuses in Windows, he stated that the Mac looked like it had been created by one or a small group of people with a single purpose, a single view of how the information should be presented, while Windows looked like it had been done by a committee.

He then said that all the best presentations were this way – a single point of view forcefully pushed onto everyone. Someone in the audience then asked but what happens if your single point of view turns out to be wrong, to not work.

Tufte replied, simply, “You should be fired.” You could almost audibly hear the intake of everyone’s breath. That is exactly what they feared and why they would always want to retreat into committee decisions – they can’t be fired if the committee made the decision.

The creative, the innovative do not really fear failure, often because they are adaptable enough to ‘route around the damage’ quickly enough. They do not usually doubt the mission they are on and are certainly not uncertain about the effects. Read about the development of the Mac. They were going to change the world, no doubt about it. While you can see that there really was a focus of vision, there are also lots of ‘failures’ that had to be fixed. The key was to fail quickly, leaving time to find success.

And permitting committed individuals to find their own way to success rather than rely on committees to fix them.

Jobs’ methods may be abrasive but there is a point. The types of individuals that Jobs is looking for – those who can creatively connected to the single vision needed for success and who are adaptable enough to make that vision a reality –  do not respond to his manner by trying to hide in committees. They stand right up, against all outside pressure, and try to find a solution.

And that is why they succeed.

 

People like real art, even if it is stupid looking abstract art

A child couldn’t paint that – can people tell abstract art from a child’s or chimp’s work?
[Via Not Exactly Rocket Science]

If you wander through New York’s Museum of Modern Art, you’ll eventually come across Painting Number 2 by Franz Kline, a set of thick, unruly black lines on a white canvas. Elsewhere, you will find one of Mark Rothko’s many untitled works, consisting of various coloured rectangles. And in front of both paintings, you will inevitably find visitors saying, “A child could paint that.”

To which Angelina Hawley-Dolan and Ellen Winner replied: “Could they?”

The duo wanted to test the assertion that abstract expressionist art is devoid of talent – that it could be done by a mere child, or even an animal. With keyboards and enough time, monkeys could surely duplicate Shakespeare, but with a paintbrush and a few hours, could a monkey produce a Rothko?

To find out, Hawley-Dolan and Winner asked 32 art students and 40 psychology students to compare pairs of paintings. One piece of each pair was the work of a recognised artist, such as Kline, Rothko, Cy Twombly, Gillian Ayre, and more. The other came from the oeuvre of lesser-known painters, including preschool children, elephants, chimps, gorillas and monkeys. The paintings were …

[More]

Interesting work. Even non-art people liked the professional art than the amateur. There may be a reason that particular childish looking art made it into an art gallery – because people like it. Professionals that made unpleasing art, like many amateurs might, would not end up in a gallery.

What this shows is that the abstract art that gets selected for museums, etc. actually does have qualities that lots of people like. Those artists knew something.

The real sign of Apple’s innovations – they fit on a table

[Crossposted at SpreadingScience]

$76 billion a year from a tableful of products
[Via asymco]

During the calendar year 2010 Apple spent nearly $2 billion in R&D. That is a significant increase from $714 million in 2006. However, as a percent of sales, R&D spending has decreased. Sales have grown more rapidly than resources hired to develop the products (or to sell them).

In Q4 2005 Operational Expenses (costs which are not tied directly to units of production–sometimes called fixed costs) were 14.2% of sales. In the last quarter of 2010, the ratio was 9.2%. Sales and administrative expenses (which include advertising, promotion and overhead) were 7.1% and R&D (which includes all engineering, testing) were 2.2%. As percent of sales both reached new lows.

[More]

I mentioned this last week but this is a nice graph to see trends.

This remark was pretty cool to think about:

The efficiency with which Apple creates sales is legendary. There can be many explanations for this but the most telling evidence of causality I can find is the small number of products in the portfolio. Tim Cook stated that given the sales value, there is more concentration of product at Apple than at any other company except perhaps an oil company. All the products Apple sells can fit on one average sized kitchen table and they generated $76 billion in sales last year.

I’ve written about Apple’s approaches, as well as those of other 21st Century companies. One of the  key aspects is their efficiency – they produce a huge amount of innovative work that belies the small size of their research groups. Pixar is another example.

I worked for a company that accomplished this – Immunex. We were able to compete with much larger companies by focussing our research efforts very tightly. Not that we only worked on a few things. We worked on a lot of them.

But we only allowed a very few to pass through to real development. We did this by having a very open and transparent vetting process for projects. We examined every research project 3 times a year in a process that could be attended by everyone.

What this did is make it very hard to carry on projects purely for political reasons. In many companies, a powerful sponsor could take possession of a project and push it through, resulting in something that dies on the market; in these companies, politcal pull can bemore important than actual innovation.

Because of the social aspect of our vetting, it became much harder to say that a project would continue “Because I said so” when everyone could see that another project held better value. It decreased the ability of politicians to get a project approved.

And, since everyone’s views were heard, people could understand why a decision was made – it was made in public.

We worked hard to kill projects or put them on the backburner. But it was all done in public. And then we allowed every scientist to spend a percentage of their time working on a project – any project – that they wanted to. This not only allowed people to continue for a time even on killed projects, hoping to rejuvenate them, but allowed really creative ideas to be examined.

But, after a certain time, each of these were vetted in public. If they did not pass the public test, they were scrapped.

We developed a lot of innovative ways to foster creativity but the most important was making the discussions and decisions open to anyone, make the important decisions as early as possible and make them public.

I don’t know if Apple does the latter but it seems likely they do the former, as this from asymco suggests:

Most observers of technology are not aware of the pace of its development. It’s natural to assume that most R&D costs are in the product creation, or early phases of development. Coming up with something new must be hard. But that’s not actually true. Most R&D work is routine polishing of products and coordination late in the development cycle. “Productization” is far more resource intensive than “concepting”.

This is absolutely true – coming up with ideas is easy; making them happen is hard.

It stands to reason that making go/no-go decisions early in the pipeline is a lot less expensive than making stop-ship decisions prior to launch.

I have no specific evidence that this is the case, but I guess Apple conceives of plenty of concepts, but chooses to move forward to develop and market very few. Most companies don’t have the ability to decide early and proceed with costly R&D and marketing in order to find out whether products will “work” in the marketplace. The proliferation of flawed products is a big cause of the inefficiency of product development.

Look at so many companies. They put out lots of products hoping the market will decide which is best. They want consumers to do the hard work. How did the Kin see the light of day? Many companies just can not kill a project that has emotional and political connections. So they let it slump on through, hoping that the market sees potential.

That is why, a year after the iPad, we have 100 different copy cats, while in the years before the Ipad there was just nothing even close. Most companies have no real idea of what is successful to they copy other’s success.

But Apple, like Immunex, repeats innovation time and again because it has developed a process of killing things that do not work and, if they can, killing them before they progress very far. They may not always succeed – they have had failures – but they usually know why it failed.

I worked for a company that came up with innovative solutions for years –again and again – so I know that what Apple is doing is not only working but is reproducible.

That is what separates a 21st Century Company from a 20th Century one.

Some reasons why Apple is one of the first 21st Century companies

[Crossosted at SpreadingScience]

appleby leoncillo sabino

Reasons for Apple’s Greatness? How ‘Bout The Cook Doctrine?
[Via Mactropolis.com - Your Friendly Global Mac Community]

Asymco has a great post up titled simply ‘The Cook Doctrine’. It’s a compilation of statements from Tim Cook in a financial earnings call (for Q1 2009), while he was the Acting CEO for Apple during Steve Jobs’ leave of absence.

We believe that we’re on the face of the Earth to make great products, and that’s not changing.

We’re constantly focusing on innovating.

We believe in the simple, not the complex.

We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.

We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.

And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

And I think, regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.

Taken together, these add up to one hell of a great company philosophy. They also offer cause for optimism on the company’s prospects even when Steve Jobs is no longer in charge.

[More]

I’ve written about what some 21st Century companies will look like – The Synthetic Company part 1, part 2 and part 3.

And the strength of these organizations is that the core principles are not dependent on just one charismatic man at the top of the hierarchy.

Cook gets is. As did Lassiter at Pixar, another 21st century company until bought out by Disney. As I wrote back then:

In the Innovator’s Dilemma, Clayton Christensen discusses the difficulty organizations have in utilizing disruptive technology in novel ways. The dilemma is that often the same processes that helped make them successful now prevent them from making the leap to a new technology set. See Clay Shirky’s article on the collapse of business models for some examples.

Even when they know that they have to change and even what the changes must be, they almost always fail in making the leap.

That is mainly in the way they are organized, how they are run and the types of communities they represent.

Yet companies that have Steve Jobs organizing them seem to have been able to do this. Apple defined personal computing, it defined the graphic user interface, the laptop, the MP3 player, the smartphone, the tablet computer. Pixar defined computer generated animation.

By creating organizations where innovations are not shuttled through layers of middle management, with each layer sucking the originality out, Jobs has been able to drive disruptive innovations rather than react to them.

The most amazing thing to me is that Apple has succeeded in being a market leader during two separate paradigm shifting market wars – first the graphical user interface wars between Apple vs Microsoft and now the Internet as interface wars between Apple vs Google. Microsoft’s inability to become a major player in the new way of the world is an example of corporations failing to make the leap, of suffering the Innovator’s Dilemma.

One important aspect of these sorts of  21st Century companies is that their strength is their community. It is very hard to alter the principles of a strong, cohesive community – living in Seattle I can still see the strong Scandinavian culture present, not only in businesses but in politics.

It looks like Cook certainly gets it.


iTunes jackpot: Billions and billions

[Crossposted at SpreadingScience]

iTunes jackpot: Billions and billions
[Via Brainstorm Tech:]

Apple has paid out more than $2 billion to developers, $12 billion to music labels

Source: Asymco

Sometime in the next week or so, the zeros on the App Store countdown odometer will roll over and Apple (AAPL) will announce that 10 billion apps have been downloaded since the store opened two and a half years ago.

Asymco’s Horace Dediu has used the approaching milestone to run series of analytical charts. The first group, posted Sunday, showed that the number of apps downloaded per iOS device is accelerating and has grown from about 10 per iPhone and iPod touch in the fall of 2008 to more than 60 per iOS device today. Sometime later this year, the number of app downloads since 2008 will overtake the number of songs downloaded since 2003.

Of course, we pay for the music we buy from iTunes, while most of those apps are free. But there is money to be made supplying both kinds of content, and on Monday Dediu took a crack at estimating how much.

His conclusion: Apple has paid more than $2 billion to third-party app developers and about $12 billion to the music labels. To see his math, click here.

[More]

I wrote about the app economy a few weeks ago. Here we have another example. Just from Apple – $2 billion to developers for products that did not exist 3 years ago. How many markets go from zero to $2 billion in that time?

The ability of groups to generate capital with rapid creative cycles drives this. It is not built on monolithic applications that take years and hundred of man-hours to develop. Quick, rapid and fast are the hallmarks of this economy.

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