The Stockdale Paradox

Long time no post here...yeah, but I´m trying to read, ok? And, besides that, it´s summer time--I guess I´m the only one surfing on the net :-)
Anyway, while studying in Vancouver, a management book was recommended to me by Ron, my black teacher in Academic Preparation courses. He came over to me the other day saying: "This book is what the CEOs are reading right now all around the world. Tom, I know you´re gonna like it." And I did :-) I still do. Before writing anything more about this book or its author, Jim Collins, a top-drawer leadership expert, I´ve decided to post an excerpt from it. A favorite story of mine--The Stockdale Paradox.

The name refers to Admiral Jim Stockdale, who was the highest-ranking United States military officer in the „Hanoi Hilton“prisoner-of-war camp during the height of the Vietnam War. Tortured over twenty times during his eight-year imprisonment from 1965 to 1973, Stockdale lived out the war without any prisoner’s rights, no set release date, and no certainty as to whether he would even survive to see his family again. He shouldered the burden of command; doing everything he could to create conditions that would increase the number of prisoners who would survive unbroken while fighting an internal war against his captors and their attempts to use the prisoners for propaganda. At one point, he beat himself with a stool and cut himself with a razor, deliberately disfiguring himself, so that he could not be put on videotape as an example of a well-treated prisoner. He exchanged secret intelligence information with his wife through their letters, knowing that discovery would mean more torture and perhaps death. He instituted rules that would help people to deal with torture /no one can resist torture indefinitely, so he created a step-wise system—after x minutes, you can say certain things—that gave the men milestones to survive toward/. He instituted an elaborate in internal communications system to reduce the sense of isolation that their captors tried to create, which used a five-by-five matrix of tap codes for alpha characters /tap-tap equals the letter a, tap-pause-tap-tap equals the letter b, and so forth, for twenty-five letters/. At one point, during an imposed silence, the prisoners moped and swept the central yard using the code, swish-swashing out „We love you“ to Stockdale, on the third anniversary of his being shot down. After his release, Stockdale became the first three-star officer in the history of the navy to wear both aviator wings and the Congressional Medal of Honor.

You can understand, then, my anticipation at the prospect of spending part of an afternoon with Stockdale. One of my students had written his paper on Stockdale, who happened to be a senior research fellow studying the Stoic philosophers at the Hoover Institution right across the street from my office, and Stockdale invited the two of us for lunch. In preparation, I read In Love and War, the book Stockdale and his wife had written in alternating chapters, chronicling their experiences during those eight years.

As I moved through the book, I found myself getting depressed. It just seemed so bleak—the uncertainty of his fate, the brutality of his captors, and so forth. And then, it dawned on me: „Here I am sitting in my warm and comfortable office, looking out over the beautiful Stanford campus on a beautiful Saturday afternoon. I’m getting depressed reading this, and I know the end of the story! I know that he gets out, reunites with his family, becomes a national hero, and gets to spend the later years of his life studying philosophy on this same beautiful campus. If it feels depressing for me, how on earth did he deal with it when he was actually there and did not know the end of the story? „I never lost faith in the end of the story,“ he said, when I asked him. „I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.“ ----------------

I didn´t say anything for many minutes, and we continued the slow walk toward the faculty club. Finally, after about a hundred meters of silence, I asked, „Who didn´t make it out?“ „Oh, that´s easy,“ he said. „The optimists.“ „The optimists? I don´t understand,“ I said, now completely confused, given what he´d said a hundred meters earlier. „The optimists. Oh, they were the ones who said, „We´re going to be out by Christmas.“ And Christmas would come, and Christmas would go. Then, the´d say „We´re going to be out by Easter.“ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.“ Another long pause and more walking. Then he turned to me and said, „This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.“ To this day, I carry a mental image of Stockdale admonishing the optimists: „We´re not getting out by Christmas. Deal with it!“

I Got It! :-)

Yesterday, it was quarter to eight in the evening, my cellphone rang. I got a call from my personnel agent--Mr. Dittmann. It was THE call--the ONE I´d been desperately awaiting since my very final interview with the head of sales and marketing dpt. at Skoda Auto company last Wednesday. So, after four interviews in three weeks, I finally got it! I pulled it off! :o) Brand Manager at Skoda--presumably the most admired company in the Czech republic--will be my very next job. Having quit the Ogilvy Mather´s BBK ad agency only two weeks ago, I was facing a win all / lose all situation. Hence, it´s clear that I shouted YES quite loudly upon hearing Mr. Dittmann´s big news yesterday :-)

Now, let me just add one thing here, let´s call it "lessons learned"... As some of you would opine, more or less deliberately, a bird in the hand is worth two in the bush. Yes, I wanted to hit that proverb and I wanted to hit it deliberately indeed: this is not the right way of thinking when you want or plan to achieve something better in your live, respectively in your career. There´s a space in our lives between action and reaction, between stimulus and response, it´s called freedom to choose and I love the way Stephen Covey--the world´s no. 1 guy in personal development and leadership--puts it it his latest book The 8th Habit: In those choices lie our growth and our happiness. Your power to choose the direction of your life allows you to reinvent yourself, to change your future, and to powerfully influence the rest of creation. It is the one gift that enables us to elevate our life to higher and higher levels.

I believe that according to this, the choice between a bird in the hand and two birds in the bush is, in fact, the choice between mediocrity and something more than merely that--something really great. As for me, I do not want to live a good, mediocre life, I do want to live a great life. With the right vision, discipline, and passion, everyone´s invited.

Česká vsuvka - nějak jsem měl vždy spadeno na personální agentury... navíc ne úplně pozitivní zkušenost jsem udělal z Kanady :)...O to nadšeněji teď musím prohlásit, že spolupráce s Dittmann Consulting, resp. Horton International, konkrétně s p. Leo Dittmannem byla naprosto skvělá, profesionální, s vysokou přidanou hodnotou.

Why Is SONY In Troubles

I like the way Al Ries puts it: Hang too much on a star and it will fall from the sky. Clear. Simple. And true too. SONY is experiencing serious profit troubles as a result of that. In fact, if you did a survey, you would probably find that Sony is the world’s most admired electronics brand. Way ahead of whoever might be in second place. However, like most Japanese companies, SONY is heavily line extended. Sony puts its brand name on television sets, videocassette recorders, digital cameras, personal computers, cellphones, semiconductors, camcorders, DVD players, MP3 players, stereos, headphones, broadcast video equipment, computer screens, computer hardware, batteries and bunch of other products.

Again, building a brand and building a profitable brand are two different things. Does SONY make any money? The sad fact is NO. Net profits after taxes of SONY Corporation are tiny. In the last ten years, SCorporation had revenues of $519.2 billion. But net profits after taxes were only $4.0 billion. That’s 8/10th of one percent of sales. It’s hard paying off your bank loans, not to mention paying dividends to investors, with that kind of return.

Yet Sony’s most profitable product is the PlayStation video game, a brand which makes only marginal use of the SONY name.

Here are some interesting business insights I´ve found on the Internet:

Compare SONY with Dell Computer. Sony makes personal computers and a lot of other products. Dell just makes personal computers (until recently when they added printers.) In the last ten years, Dell Computer had sales of $140.3 billion and net profits after taxes of $8.5 billion, or a net profit margin after taxes of 6.1 percent.

That’s not fair, you might be thinking. To compare with Sony, you picked a company (Dell) that is exceptionally profitable.

Actually that’s not true. Dell is in a highly competitive business where profit margins are thin. (IBM has never made money in the personal computer business and Hewlett-Packard’s PC business is barely profitable.) As a result, Dell’s 6.1 percent profit margin is not spectacular.

The New York Times follow-up article here:
Falling Prices Bring A Deeper Loss At Sony

The First Non-Japanese CEO At Sony. Has The World Gone Mad?

I´m sure some of you´ve noticed that SONY has a new CEO. An American guy called Howard Stringer--the firs non-Japanese chief executive in the history of SONY. Who is the man who will run the Japanese electronics and entertainment giant?

Sixty-three years old. Born in Wales and has both US (since 1985) and UK citizenship. Has never lived in Japan nor does he speak Japanese. Holds BA and MA from Oxford University but soon after graduating moved to the US, where he has lived since. Knighted by Queen Elizabeth II in 1999. Will continue to live in New York and commute to the Sony headquarters in Tokyo, while his family (wife and two children) live in the UK.

Brought together the previously disparate US music and movie operations. Four years after arriving at Sony was given CEO leadership of the music, movies and electronics businesses in the US.

In a memo to Sony employees, said the company needs to "reinvent" its legacy and "accelerate cross-company collaboration". Advocates quickening the pace of change and innovation to keep businesses competitive, restoring focus on pleasing customers and restructuring businesses to improve profitability.

Well, hopefully Mr. Stringer knows the difference between a brand and a profitable brand. The simple fact is, Sony is in deep, self-imposed trouble. Over the past couple of years, there´s been "something wrong" with its business. These days, Sony makes almost everything. Except money.

Appointing Mr. Stringer a new CEO might have been a bold step. Kudos for that, guys. Maybe the world has gone mad, but this is definitely not an example of it.

Stando, hni se už!

Podle zpravodajských, infotainmentových a i tzv. kuloárních (přeložím: kuloár znamená "to jediné, čemu se dá ještě dneska v politice věřit") titulků z dnešního dne (celé texty nemá smyslu číst, jsou i lepší způsoby jak plýtvat svým časem) šel náš ministerský předseda "do sebe" a připustil, že odstoupí a přenechá svou nevděčnou funkci někomu jinému. Bravo. Na nedávném sjezdu Socdemáků byl Standa Gross označen jako "vyhořelé palivo". Standa argumentoval tím, že i TO je stále aktivní. Všechny nakonec udivilo, jak prozíravá, hluboká a správná byla jeho myšlenka. Zasloužil by si za ni Řád hrošího kožíšku. Jeho splachovačnost, oproti ostatním národům u nás Čechů již tak dost vysoká, se v jeho případě stala příslovečnou. Opravdu se nemůžu zbavit dojmu, že (když už jsme zmínili to vyhořelé palivo) poločas rozpadu osobní integrity Stanislava Grosse, kdysi "nejoblíběnějšího z politiků" (což je samo o sobě dost relativní, alespoň podle mých mých měřítek soudě dle českých reálií..) je úctyhodně dlouhý. Možná si teď najde místo v jaderné energetice. Jak říká klasik, "pro mě za mě, ať si jde třeba do prdele."

Podle mého osobního názoru, kt. nechci a nehodlám nikomu vnucovat, nebyl Stanislav Gross dobrým premiérem. Přejdu to, že byl příliš mladý, nezkušený, postrádal charisma, schopnost vést a inspirovat. Pro mě je zásadní jedna jediná věc a tou je nedostatek charakteru. Můj guru říká, že character is the will to do what is right--even when it´s hard. Hodí se vám k tomu Stanislav Gross?

Catholic Church Running Out Of Steam?

"Church Fights Da Vinci Code Novel"
"Vatican Assault On DaVinci Code"
"Vatican Officially Denounces The DaVinci Code"
"Cardinal´s Plea: Do Not Read DaVinci Code"

Oh my Gosh, there´s a lot of noise in the media about the Catholic Church disparaging the world´s no. 1 selling novel--DaVinci Code by Dan Brown. As a matter of fact, looking at the headlines, the "disparage" verb I used is a very diplomatic term indeed... For it seems the soft spoken language that usually comes from the Catholic Church officials is anything but diplomatic. It´s quite offensive. Can anybody tell me, why did the Vatican go crazy about some mainstream novel instead of trying to tackle some really important issues the Catholic Church has been facing over the last decades? With the number of Catholics declining, financial as well as sexual abuse scandals on the rise, and the Pope presumably at his eleventh hour, I just don´t get it! Helooo! You guys are obviously trying to perform an operation on the patient using the heart bypass surgery, but guess what--the patient is dying on cancer!

De-coding DaVinci

The Da Vinci Code, by US author Dan Brown, has been a publishing sensation around the world and is still in best-seller lists. Its conspiracy theories and thriller style, in which two code-breakers try to track down the truth behind the Holy Grail, have caught the imaginations of millions. Its central claim is that the Holy Grail is really the bloodline descended from Jesus and Mary Magdalene - which the Church is supposed to have covered up, along with the female role in Christianity. Brown has previously said: "All of the art, architecture, secret rituals, secret societies, all of that is historical fact."

Vatican Lost It

"The book is everywhere. There is a very real risk that many people who read it will believe that the fables it contains are true."
"Christians should not buy or even read the best-selling thriller."

One Particularly Interesting Fact

The strongest Vatican critic of the novel, Cardinal Tarcisio Bertone, the Archbishop of Genoa, Italy, is among those seen as a likely successor to the ailing Pope John Paul II.

My Last Word

Considering the whole picture from a marketer´s point of view, this is a textbook example of how a public effort, no matter how much successful or legitimate, to take on something that is merely commercial (in this case a book), is going to rather burnish the sales and overall popularity/hype that is already quite significant. For me, Dan Brown is a genius. Completely fabricated or not, the novel proved one thing--that the Catholic Church is far from its own resurrection.

Cogito Ergo Sum? Descartes Was Wrong Here.

Come on, we all know this phrase, we all use this phrase. But guess what--it sucks. The phrase per se is flawed, so why should we use it? "I think, therefore I am" is possibly the single best-known philosophical statement and is attributed to René Descartes. Cogito ergo sum (in Latin) is a translation of Descartes' original French statement, Je pense, donc, je suis.

Cogito ergo sum anticipates that our daily desicion-making such as what to do and why, or, particularly important in business, what to buy and why, is the consequence of a strictly rational way of thinking. This idea, brought up by Descartes in 17th century and supported by his partisans (so called continental rationalists) Leibnitz and Spinoza, is simply flawed and untrue. A dead wood indeed. Do I have to prove it? Come on! Take your time, look around yourself and think for a while...
"I think, therefore I am" somehow excludes a lot of people from belonging to homo sapiens, don´t you think so? Well I believe so ;o)

Studies of human psychology have proven people´s decision-making anything but strictly rational; all of us, as living creatures, are permanently finding ourselves, more or less, in a very volatile, unstable, and therefore highly unpredictable mental shape / emotional mood (Bolzano). This eventually prevents us from 100 per cent rational thinking, which makes the difference between a living person--emotionally engaged-- and a dead person--emotionally "disengaged" (or neutral).

Česká vsuvka - kdo máte doma Bureššovu knihu Poziční strategie v marketingu (kterou jsem si překřtil na Všechno co doopravdy potřebujete vědět o marketingu a businessu najdete v tomhle), najdete v ní rozvinutí tématu "co nám filosofie dala pro život a business". Obzvláště podnětné jsou zejména takové autorovy (vyloženě) provokace jako rozdíl mezi kupní silou a tržním potenciálem nebo co skutečně motivuje poptávku (a staví tím pádem rigidní teorie "hamburger" a "cola" ve skriptech základů ekonomie na hlavu, k mému velkému zadostiučinění).

The ultimate prove for all the points above is a single, compelling, yet often misunderstood word. It´s the brand. Reality, numbers, or "true" doesn´t move the world around. Ideas, beliefs, and interpretations of reality does. Consider the long-lasting battle between the two best known business rivals in the world: Coca Cola and Pepsi. Neuroscience has revealed the mental picture of a powerful brand (Coke) is indisputably more important than the actual better taste of its rival (Pepsi). Indeed, in the 2003 laboratory tests by Read Montague, Director of the Human Neuroimaging Lab at Baylor College of Medicine, most people preferred the taste of Pepsi, and yet the majority still bought Coke. (I´m sure some of you know another example described in the advertising bible by David Ogilvy--the whisky contest).

This topic is to be continued... There is lots of stuff to write about ;-)