Internet, sminternet. To me the biggest, most interesting, and the most culturally meaningful story in the economy right now is the continued growth of Wal-Mart. Alanis Morrisette might find it "ironic" (doncha think?) that one enduring legacy of wiring the world has been to bolster the clout of the nation’s biggest company.
The salient theme about Wal-Mart is its unprecedented power to drive the business models of everyone else. Useem shows how folks like Jeffrey Katzenberg make the pilgrimage to Bentonville to garner retail sinecure for the Shrek DVD (which, coincidentally became the year’s bestselling DVD.) He shows how young women earning modest salaries purchase more than $1 billion of product per year.
"By systematically wresting ‘pricing power’ from the manufacturer and handing it to the consumer, Wal-Mart has begun to generate an economy-wide Wal-Mart Effect. Economists now credit the company’s Everyday Low Prices with contributing to Everyday Low Inflation, meaning that all Americans—even members of Whirl-Mart, a ‘ritual resistance’ group that silently pushes empty carts through superstores—unknowingly benefit from the retailer’s clout. A 2002 McKinsey study, moreover, found that more than one-eighth of U.S. productivity growth between 1995 and 1999 could be explained ‘by only two syllables: Wal-Mart.’ ‘You add it all up,’ says Warren Buffet, ‘and they have contributed to the financial well-being of the American public more than any institution I can think of.’ His own back-of-the-envelope calculation: $10 billion a year."
Now if only the behemoth would do more to sell my book! One sale per store per day….
Monty Python Management
When mentioning all those films for entrepreneurs yesterday, I left out the most important instructive and inspiring one of all, a movie that I often thought of during the Internet Insanity. What follows is a piece that I've had kicking about for a bit, on the management lessons of Monty Python and the Holy Grail...really. Thought I'd post it here. Feel free to borrow or quote if you are so moved!
There are many great texts and teaching tools for learning the art of management. You have Peter Drucker’s Management: Tasks, Responsibilities, Practices, Michael Porter’s Competitive Advantage, and the wonderful thought-blockbuster Good to Great by Jim Collins.
Me, I’ll take Monty Python and the Holy Grail. Most folks consider this film as a comic trifle, a mere hilarious interpretation of the quest for the Holy Grail. Ah, but there’s so much more. It’s not just the noble inner message about the importance of shrubberies; or the delicious taunts of the furious Frenchman ("I fart in your general direction. Your mother was a hamster and your father smelled of elderberries.") Watching this movie can indeed make you a better manager. Dubious? Here are a handful of lessons.
Trust Yourself
Picture a plague-ridden village in which recent and decaying corpses are being picked up by a man with a cart. "Bring out your dead," cries our cadaver collector, who receives a payment from people whose, um, medieval trash he gathers.
The cart driver encounters a customer who wants a body taken away, a minor complication given that the body isn’t quite ready for disposal. "I’m not dead yet," says the annoying body, adding, "I’m getting better." The cart driver refuses to take him. The customer tells the would-be corpse not to be such a baby; and finally slips the cart driver a few pence to bonk the body, formalizing the condition already established by the others.
Moral: You’re dead only when you’re dead. And not when some VC or reporter or analyst decides it is so. How many dot-com companies were declared dead long before they ceased? How many promising technologies and applications that have been dismissed are now finding healthy and productive and profitable applications in the economy?
The Power of Mission Statements
Throughout the film King Arthur repeats the simple mission statement for the team: "Our quest is to find the Grail." Talk about a Big Hairy Audacious Goal.
Of course, I can think of a number of companies with more earthly stated goals, who are nonetheless pursuing targets that are as intangible and unattainable as Arthur’s. The point? I think the most important is that a big goal sets a team in motion. It provides direction, alignment, and meaning. And while it’s impossible at the outset to know whether one will encounter flying cows, animated dragons, or anachronistic interruptions, it’s more likely you’ll get where you want when you have a clear sense of purpose. Absurd or not, it helps.
The Sanctity of Leadership
Early in the film two peasants look up to see Arthur and his page ride by their besotted village. One immediately discerns that he is a king. The other asks how he knows. "He’s the one who hasn’t got shit on him."
Enough said.
Fear the Bunny. (Better yet, Be the Bunny.)
As our noble crew nears the Grail they enlist the help of Tim the Enchanter, a strange Scot who warns them of a fierce monster guarding the entrance to the Cave of Caerbannog. "A creature so foul and cruel that no man yet has fought with it and lived," warns the seer, who predicts "death awaits you all with nasty big teeth." And yet when the valiant lads reach the cave they see nothing but a rabbit. Could the foul monster be hiding behind it? No, Tim insists, the bunny is the most foul and ill-tempered thing they’ll ever see.
And so a knight scornfully walks up to make a bit of stew, only to have his head bitten off by the savage hare. "I warned you," Tim says. And he certainly did. It finally takes the Holy Hand Grenade to do away with the terrible monster.
How many current monsters have initially presented themselves as that cuddly bunny? Pretty much everyone considered the Microsoft nerds to be as harmless as the white rabbit for their early years, never suspecting that today not even the full force of the Justice Department can keep this savage bunny from ripping their bloody guts out.
Know When to Concede Defeat
On his quest, Good King Arthur encounters a Black Knight with a steely resolve to keep anyone from crossing the footbridge. He stoically tells Arthur that none shall pass, and so enters into a fierce battle with the king. Arthur’s superior skills quickly enable him to cut off the Black Knight’s arm. Assuming victory, our King kneels and prepares to pass. The Black Knight has different ideas. "tis just a scratch," he tells Arthur, who then proceeds to cut off his other arm. "It’s just a flesh wound," counters the belligerent and armless warrior. Exasperated, Arthur continues to truncate his legs. When finally eviscerated to a mere torso and head, the furious warrior calls after Arthur, "Coward! Come back and I’ll bite your head off."
Oh that so many flailing companies repeat the Black Knight’s bold claims. The victorious Arthur scoffs at his armless and soon to be leg-less opponent, "What are you going to do: bleed on me?" That’s precisely what many flailing companies do with their red ink: bleed it on their galloping opponents.
Know Your Favorite Color
Eventually our heroes encounter a Big Bridge guarded by a magical Bridgekeeper. In order to cross they must answer three questions. Some questions, such as "what is the capital of Assyria?", are difficult. Others must simply answer their name, quest, and favorite color. Easy enough. Easy, that is, until Sir Gawain equivocates. When asked his favorite color he replies, "Blue."
Then he changes his mind, saying, "no yellooooow." And is summarily hurled by an unseen force into a 10,000 foot gorge. It takes "out of the box" thinking to rid this problem: King Arthur turns the table on the Bridgekeeper by asking for a clarification of his question. And when the bridgekeeper doesn’t know he joins Gawain below.
So know what you believe. And anticipate the tough questions. Only those who can answer the questions pass. Otherwise its down into the valley for you, laddie.
Are there enduring managerial lessons here? Why, certainly. Ultimately, Monty Python and The Holy Grail is a metaphor whose meaning is as concrete as the Holy Grail itself. That is to say, you can choose your lessons from this film. There’s little point in analyzing why something is funny or not. There’s funny, and there’s not funny. Likewise with so many startups or proposed business ventures, working on paper doesn’t cut it. You have to make this stuff fly in the real world. And whether it flies like a Jetblue airplane or like the "vache" hurled by the furious Frenchman taunting King Arthur in our movie, success is realized in the doing not the thinking. The real proof of the pudding rests not in the recipe but the pudding.
The essence of managing is informed action: making the right decisions and carrying them all the way through to the next set of decisions that execution of these actions produces. As Donald Schon puts it, reflection in action. Experience and education and attitude all prepare you to make the right decisions and the follow through on them; but again, its all about what you produce. Lessons must ultimately prepare you to take better actions.
So roll out that Monty Python flick. Not just to learn about the nature of power, the absurd capriciousness of mission statements, and the power of loyalty. But because it’s funny, to boot. Okay, I’ve got to go now. As the fey prince would say, "I think I feel a song coming on."
Posted by tom at 04:57 PM
Movies for Entrepreneurs
Recently I’ve been spending a lot of time on a terrific blog, 2blowhards, which has taught me that the only way for this blog to work is for me to practice what I preach in my book. In particular, I need to differentiate what I offer by imbuing it with as much of myself as possible. Certainly with an eye/ear towards my audience—but always informed by what I really care about. What follows is a lengthy post on a favorite topic of mine: movies that should inspire entrepreneurs.
My top six choices are: Groundhog Day, The Music Man, Ghostbusters, Run Lola Run, Jerry Maguire, and Mary Poppins. Of course, most commercial films that are ostensibly about business generally have very little to say about business. In Hollywood, CEOs are villains who have lied and murdered for their position, and humble but wise mail clerks (ideally played by Michael J. Fox) have far more insight than everyone above them and win the top job (and the girl to boot) through homespun smarts. And of course greed is good, the mafia is a business worthy of an HBS case study, and all accountants look like Rick Moranis or Charles Martin Smith.
My entrepreneur’s filmfest kicks off with Groundhog Day, a great movie that has spawned a cult of followers who see a deep parable in the film’s message. Here’s a reverent essay on the topic and here’s a wonderful piece discussing a showing of the movie at the San Francisco Zen Center (with excellent further links.) Finally, a list of links about the film. So while I can’t claim to be the only person seeing deeper resonance about the film, here’s my take on its message about entrerpreneurship (actually, my wife and I first noticed it’s relevance in the context of parenting, but that’s a digression I won’t pursue.)
Of all the tools in an entrepreneur’s kit, there is nothing more important than attitude. In Groundhog Day, Bill Murray stars as Phil Connors, a cynical weatherman who finds himself sentenced to what he considers a fate worse than death. Sent to Punxsatawne, Pennsylvania to cover its hokey Groundhog Day celebration, Phil is shocked when he wakes up only to relive the same day over and over and over. He reacts with horror. Sarcastic and egotistical, he has nothing but contempt and impatience for this town, and his looped existence is a fate worse than death. In fact, he can’t even escape by dying. He tries, only to wake the next morning to the same strains of Sonny and Cher’s I Got You Babe on the AM radio.
The movie playfully explores the consequences of Phil’s different approaches to his sentence. Initially he tries every ploy imaginable to flee, and fails. His subsequent depression leads to a series of suicide attempts (which succeed—until the next morning.) The genius of the film lies in its exploration of how the imperturbable sameness of the world changes only when one individual begins to grow. As Phil Connors begins to discern the implications of his odd god-like existence, he first behaves in completely self-serving ways. He learns what makes individuals tick and uses this for his petty needs. He tries every trick in the book to win the affection of his producer Rita, played by Andie McDowell. Yet even the most elaborate of mechanisms ultimately fail to win her love, or escape town.
So what finally changes in Punxsatawne? Phil Connors. Like a true entrepreneur, Phil only really begins to live his life when he sees his situation as an opportunity rather than a problem. On one day he tells Rita that eternal life in Punxsatawne is a curse; she replies that it’s just the opposite. Something clicks for Phil, whose attitude begins to truly change.
Phil learns to trust, to listen, and to share. He begins to find ways to save people from choking and to keep young girls from despair; he learns to master the piano and finds a way to deliver a home baby. He begins to see his time there as open to possibility. Only when he becomes generous does he eventually get the girl. Only when he shifts from selfish to selfless does he find happiness. Finally, as a result of his internal change, at the end of the film he is freed from the no exit of life in Punxsatawnee.
There’s a clear link here to the entrepreneurial imperative. The world always presents the same scenario: the important aspect concerns how one deals with it. While entrepreneurs recognize and capitalize on change, the most important and powerful change always takes place within. Therein lies the greatest payoff.
Next on my list would certainly be The Music Man.
Harold Hill is one of the great creations of America theater. And, in my very personal list, his character is animated by Robert Preston in one of the three greatest performances in musicals (along with Angela Lansbury in Sweeney Todd and Julie Andrews in Mary Poppins/The Sound of Music.) Hill represents the quintessential entrepreneur—a salesman, a dreamer, a man driven by passion and fueled by more than a touch of the charlatan. Yet who’s to say that the wares he sells, which are essentially hope and self-worth and accomplishment, are no less tangible than source code?
In this dark tale about the heart of America, Hill comes into town as a hustler who preys on the naivete and vanity of small town earnestness. Yet in the course of the movie he shows that his "think" system (hmm…didn’t some big company use that word as its motto?) can in fact convert hope into something tangible—in this case, a boy’s band. Whenever I think of charismatic leaders like Steve Jobs I can’t help but be reminded just a bit of Harold Hill.
The entire story cuts to the heart of entrepreneurship. As Scott Miller points out in his excellent book Deconstructing Harold Hill, the story is set at a time of great economic change. In 1912 waves of travelling salesmen set out to capitalize on the scattered nature of retailing. Prior to A&P and other chain stores, folks like Hill could ride the newly formed railroad lines to sell their wares directly, gaining a reputation as modern men steeped in currency and excitement. While they were met with suspicion, Miller also points out that "the image of the travelling salesman also embodied the American ideal of the rugged individualist, independently working to build his fortune and realize his own personal American Dream."
Hill works the system, both legitimately and not, by following the entrepreneurial mandate of exploiting change. Here’s how Hill gets to work when he hits the town: "All I need is an opening. You remember the pitch," he tells his former colleague Marcellus Watson: "What’s new around here?"
Such an opening could have very well been taken from Peter Drucker’s Innovation and Entrepreneurship, in which he identifies change as the source of all new and important entrepreneurial activity. "Systematic innovation therefore consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation."
Segue back to Marcellus Watson, who tells Hill that "River City isn’t in any trouble." To which Hill, in a line that would make any consultant proud, replies, "Then I’ll create some." He seeds the cloud for his wares with this goal: "I must create a terrible need for a boys band." And the rest, as we all know, is not history. It is trouble—with a capital T, and that rhymes with P, and that stands for entrepreneur.
Movie three revisits the Bill Murray (who’d a thunk it?) thread. Yup, I’m talking Ghostbusters, which has to be programmed on the double bill with Groundhog Day. (And cheers to you Ivan Reitman for your role in both!) Sure, the basic premise of this movie deals with three guys who form a business to capture spirits from the other world. But aside from the bit about spirits from the other world, there’s quite a bit of entrepreneurial resonance in their startup saga.
Just consider this exchange from the script. Stantz, played by Dan Ackroyd, panics when the three paranormal scientists are fired from the University. Severed from the cozy confines of academe, he’s going to have to take a new route.
STANTZ
I liked the University. They gave us money,
they gave us the facilities and we didn't
have to produce anything! I've worked in
the private sector. They expect results.
You've never been out of college. You don't
know what it's like out there.
VENKMAN
(with visionary zeal)
Let me tell you, Ray, everything in life
happens for a reason. Call it fate, call
it luck, Karma, whatever. I think we were
destined to get kicked out of there.
STANTZ
For what purpose?
VENKMAN
(with real conviction)
To go into business for ourselves.
Their immediate next step: to raise the capital for their venture. And how do they do it? By taking a third mortgage on Stantz’s home, the one his parents left him. And while Spengler, the money guy, reminds Ray that the interest payments alone for the first five years come to over $75,000, it takes Venkman to bring them back to their mission statement:
VENKMAN
Will you guys relax? We are on the
threshold of establishing the indispensable
defense science of the next decade -
Professional Paranormal Investigations and
Eliminations. The franchise rights alone
will make us wealthy beyond your wildest
dreams.
STANTZ
But most people are afraid to even report
these things.
VENKMAN
Maybe. But no one ever advertised before.
The three form a perfect entrepreneurial team: Murray as Venkman is the visionary, the enthusiast (even if Sigourney Weaver’s character says he acts like a used car salesman,) Ackroyd as Stantz is the technical genius, and Ivan Reitman (no techno-slob himself) plays the numbers guy.
They go through the standard entrepreneurial story: raise startup capital, rent cheap office space in a bad part of town, hire one person to answer the phones, and pour their money into capital equipment and marketing. And just when they are on the verge of going broke, they get the call that launches the business. Of course in this case, the call is to rid a hotel of a really nasty ghoul.
From there the business takes off. And here’s what I love about what they do when the job is done: they bill their first client! As they leave with their slimy prey, Venkman has the presence of mind to write a bill for $4,000—and an extra $1,000 for storage (smart, very smart.) And when the hotel manager objects to the fee, Venkman calmly replies, "Fine. We’ll let it out again." Needless to say, the manager agrees. And their career is launched, with a bullet. Before long they’re on the cover of all the newsmagazines, on Larry King, and, if they’d been around long enough, would have certainly made the Inc. 500 list.
Let me quickly go through the last three.
Run Lola Run certainly ranks among the great entrepreneurial parables of our time. And it’s not simply because the film is essentially about how Lola, the girlfriend of the bumbling German hood Manni, must scramble to collect 100,000 marks in twenty minutes to prevent a bigger crook from killing him. (Manni has left the money behind on the subway.) Yes, the desperate dash by Lola to find the funds through whatever means necessary (breaking into the bank where her father works to beg for the cash, running into the casino to make several improbable bets, and trying to keep Manni from holding up a supermarket) feels emotionally resonant to any entrepreneur without sufficient funds on Friday to pay the employees.
But there’s another lovely message from this German film, which has to do with the structure: first-time director Tom Tykwer tells this story three times, showing how the same set of initial circumstances can turn out radically different by the simplest slight change of events (describe.) Such shifts are unnoticeable to most of us, yet can play the most profound of parts in shaping the outcomes of our efforts. To me the message is this: we strive and we scramble, and we do everything possible to keep events in our control, to create our own luck. But always, in every venture we must all keep in mind that some elements beyond our control are driving the bus with us.
Jerry Maguire makes the list despite my ambivalence about the integrity of the film’s message. Many folks in the past decade identified with Jerry’s passion for creating a better business. "We are losing our battle with all that is personal and real about our business," writes Jerry in his self-defeating memo—no make that mission statement—which is printed in the script of the movie. And the movie (which I include because, I confess, I enjoy it so much,) then shows his passionate, flailing, earnest effort to make this happen. An earnestness and zest worthy of the biggest of Tom Cruise like emotions.
Jerry Maguire loses all but one client, nurtures this relationship, marries his employee, and finally sees his vision come true as Rod Tidwell emerges as a star who merits the big bucks they all need. Yet here’s where the film runs into a doom loop: as Maguire watches Tidwell give props to him on ESPN, the likes of Katarina Witt and Troy Aikman come up to him approvingly. And I can’t help but wonder if his act of integrity has put him in the position to simply recreate what he just fled. It’s a facet of entrepreneurial integrity that falls short in this fictional world. My quirky feeling is that the minute Cameron Crowe cast Tom Cruise he suddenly gained the ability to make this film. But as a result of casting Cruise he paid the penalty of having Tom Cruise, with his emoting and puffing, to carry the heart of the movie. Ploddingly as always. You can’t make a movie about integrity that features an actor who has none.
It’s the same kind of paradox in a film like You’ve Got Mail. The intended message is that little shopowners have so much more heart and soul than the corporate cads who chain them into oblivion. And yet this overdone sentimental movie required the resources of a major film studio and the salaries of Tom Hanks and Meg Ryan to make such a "personal" statement. Would it have had more credibility with me were it an indie film? Probably. So I keep Jerry Maguire on the list, if only for the fact that it makes the act of writing a mission statement meaningful.
Okay, final pick: Mary Poppins. Just cause I love to watch the transformation of Mr. Banks in the course of the film. He starts the movie as an arrogant patriarch, the lord and master of his house. Yet his detached and imperious rule of the household is completely disrupted by The Nanny, the perfect Nanny of course. Yet Mary Poppins really serves as a catalyst who enacts change and then leaves (the perfect turnaround artist as well!). She shows the Banks parents the importance of leaving the workplace behind to spend time with family—but also to inform the work place with human values. The end of the movie shows the bank directors flying kites with Banks, who has been reinstated, with a sense of humor no less. Perhaps this is a fantasy, but one I always enjoy.
And one last inspiring set of words, a great entrepreneur’s quote from Heat. Spoken by Tom Sizemore’s character when explaining why he’ll take another job (think: a new venture.) "To me the action’s half the juice. I’m in."
Thanks for reading! Please add your personal favorites to the list by adding comments if you're so moved.
Posted by tom at 06:14 PM
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