3 Must-Reads for this Weekend #14

I’m sitting at home coughing and coughing. After a long 40 days on the road, I am now officially sick. About the only thing I have energy to do is to read, but luckily there are some amazing things people have written. The common thread is about knowing when and how to adapt (because adapt we must):

Innovation is a fight; Why Apple is eventually doomed.
Oysters create pearls not because of the absence of bad stuff, but by the friction created by the foreign object. Pearls are the result of this biological process — the oyster’s way of protecting itself from foreign substances. I’m absolutely convinced that friction is necessary for innovation; without friction, the organization has nothing to respond to… here is RandsinRepose’s take:

“As someone who spends much of his time figuring out how to get teams to work together, the premium I’m placing on volatility might seem odd. I believe Apple benefits greatly from having a large, stable operational team that consistently and steadily gets shit done,  but I also believe that in order to maintain its edge Apple needs a group of disruptors.”

More here: http://www.randsinrepose.com/archives/2012/11/11/innovation_is_a_fight.html

Learning to Love Volatility
Nassim Taleb, writer of the Black Swan thesis has a new book out and the WSJ did a preview of it. The thesis is that inn a world that constantly throws big, unexpected events our way, we must learn to benefit from disorder. And that the things we think will help us survive, will not. My favorite part was Rule 3: Small is beautiful, but it is also efficient.

“Experts in business and government are always talking about economies of scale. They say that increasing the size of projects and institutions brings costs savings. But the “efficient,” when too large, isn’t so efficient. Size produces visible benefits but also hidden risks; it increases exposure to the probability of large losses. Projects of $100 million seem rational, but they tend to have much higher percentage overruns than projects of, say, $10 million. Great size in itself, when it exceeds a certain threshold, produces fragility and can eradicate all the gains from economies of scale. To see how large things can be fragile, consider the difference between an elephant and a mouse: The former breaks a leg at the slightest fall, while the latter is unharmed by a drop several multiples of its height. This explains why we have so many more mice than elephants.”

More here: http://online.wsj.com/article/SB10001424127887324735104578120953311383448.html
The book: Antifragile: Things That Gain from Disorder

Walmart Internal Compensation Reveals Systematic Limit on Advancement
When Sam Walmart started the company, he wanted to bring efficiency to commerce so that people who didn’t have the ability to feed their families or clothe their children could do so. Today, as the 2nd largest employer in the US (2nd only to the DOD), they are in a very different position. They are now, the world’s most successful retailer in history. I have long thought about their commitment to improve other people’s lives as noble, but that they appear to be missing an opportunity now that they are so successful. Today, as an industry titan they could do so much to improve the living conditions of people if they had health care and allowed people to earn a living wage. Sometimes organizations “how” get in the way of their “why”. Walmart’s original “why” was to serve its communities through improved economic conditions. At the time, their “how” was to do it through efficiency of the delivery. But today, I wonder if Walmart’s “how” is getting in the way of their original purpose of why they started this business: to help people lead better lives.

“The company website declares that “a job at Walmart opens the door to a better life” and “the chance to grow and build a career.” But interviews with 31 hourly workers and one former store manager reveal lives beset by paychecks too small to handle the bills, difficult to manage part-time schedules with hours subject to constant change, and little reason to hope for career advancement. Citing fear of losing their jobs, most spoke on the condition of anonymity.”

More here: http://www.huffingtonpost.com/2012/11/16/walmarts-internal-compensation-plan_n_2145086.html