Monday, September 28, 2009

The Way of Strategy (15): Our Definition of An Expert

Q: What is our definition of an expert?
A: Following is our list of attributes that makes an expert:
  • Analytical
  • Astute
  • Clever
  • Comprehensive
  • Insightful
  • Logical
  • Master
  • Professional
  • Proficient
  • Reasoned
  • Skilled,
  • Specialist
  • Thoughtful
  • Accomplished
  • Polished.
The road to becoming an expert is solitary, hard, brutish, and hardly ever short enough.

Friday, September 25, 2009

The Way of Strategy (14): Defining the Expert

Q: What is the criterion that the news media used to deem certain people to be experts (and gurus)?

Honouring the Worthy (Tai Gong Six Teachings-Civil Teaching Chapter 9)

King Wen asked Tai Gong:”Among those I rule, who should be elevated, who should be placed in inferior positions? Who should be selected for employment, who to cast aside? What affairs should be banned and what affairs need control?”

Tai Gong said:”Elevate the worthy and place the unworthy in inferior positions. Choose the sincere and trustworthy, eliminate the deceptive and artful. Prohibit violence and chaos, stop extravagance and ease. Accordingly, one who exercises kingship over the people recognizes the ‘six hazards’ and ‘seven harms’.”

King Wen said:“I would like to know more about them.”

Tai Gong said:”For the ‘six hazards’:

“First, if your subordinates build large palaces and mansions, pools and terraces and amble about enjoying the pleasures of scenery and female musicians, it will ‘injure’ the King’s virtue.”

“Second, when the people are not engaged in agriculture and sericulture but instead give rein to their tempers and loitering about, disdaining and transgressing the laws and prohibitions, not following the instructions of the officials, it harms the King’s influence.”

“Third, when officials form cliques and parties - obfuscating the worthy and wise, obstructing the ruler from feeling the pulse of the state - it ‘injures’ the King’s authority.”

“Fourth, when scholars are contrary-minded and conspicuously display ‘high moral standards’ - taking such behavior to be powerful expression of their disposition - and have private relationships with other feudal lords - slighting their own ruler - it ‘injures’ the King’s awesomeness.”

“Fifth, when subordinates disdain titles and positions, are contemptuous of the administrators, and are ashamed to face hardship for their ruler, it ‘injures’ the motivation of meritorious subordinates.”

“Sixth, when the strong clans encroach on others - seizing what they want, insulting and ridiculing the poor and weak - it ‘injures’ the work of the common people.”

“The seven harms:”

“First, men without wisdom or strategic planning ability are generously rewarded and honored with rank. Therefore, the strong and courageous who regard war lightly take their chances in the battlefield. The King must be careful not to employ them as generals.”

“Second, they have reputation but lack substance. What they say and their stand is constantly changing. They conceal the good and spread the bad. They are always seeking short-cuts. The King should be careful not to make plans with them.”

“Third, they make their appearance simple, wear ugly clothes, spouting no regard for office in order to seek fame, and talk about non-desire in order to gain profit. They are ‘fakes’ and the King should be careful not to bring them near.”

“Fourth, they wear strange caps and belts and their clothes are very elaborate. They listen widely to the disputations of others and speak speciously about unrealistic ideas, displaying them as a sort of personal adornment. They dwell in poverty and live in tranquility, deprecating the customs of the world. They are cunning people and the King should be careful not to favor them.”

“Fifth, with slander, obsequiousness and pandering, they seek office and rank. They are reckless, treating death lightly, out of their greed for salary and positions. They are not concerned with major affairs but move solely out of avarice. With lofty talk and specious discussion, they please the ruler. The King should be careful not to employ them.”

“Sixth, they have buildings elaborately carved and inlaid. They promote artifice and flowery adornment, in turn interrupting agriculture. You must inhibit them.”

Seventh, they con people, practice sorcery and witchcraft, advance unorthodox ways and circulate inauspicious sayings, befuddling good people. The King must stop them.”

“Now when the people do not give their best, they are not our people. If the officers are not sincere and trustworthy, they are not our officers.

- Paraphrased from Dr. Sawyer translation of the Seven Military Classics of Ancient China

September 20, 2009
Seeing Yourself in Their Light

THE dream used to be different.

Four years ago, noon would have found Gabrielle Bernstein on her way to lunch at the Soho House with a potential client of the public relations agency she co-owned. By night, she was throwing back Patrón tequila at Cielo, the Coral Room or another of the downtown clubs she represented.

Her occupation has changed. Last Tuesday at noon, Ms. Bernstein, 29, was perched on a meditation blanket in a yoga studio on West 13th Street, easing into 45 minutes of silent contemplation.

That night in her apartment in Greenwich Village, she anointed her hands in fragrant oil and, using a mixture of phrases gleaned from self-help books, meditation exercises and inspirational music, led seven young women seated on saffron and red pillows through nearly two hours of spiritual life-coaching.

“Hang out in the light,” she told the women, all in their 20s and early 30s, quoting from her forthcoming book, “Add More -ing to Your Life.” “Take action once a day to do something that ignites your life.”

You could call Ms. Bernstein, who no longer eats red meat or drinks, a life coach, meditation guide or New Age therapist. But the clients who pay $180 for four weekly sessions are more likely to call her guru.

“A lot of women look up to her,” said Jennifer Fragleasso, 31, who joined Ms. Bernstein’s group in January. “We need this guidance and we are searching for this guidance.”

A decade ago, young women like Ms. Bernstein might have been expected to chase the lifestyle of high-heels and pink drinks at rooftop bars of the meatpacking district. But now there is a new role model for New York’s former Carrie Bradshaws — young women who are vegetarian, well versed in self-help and New Age spirituality, and who are finding a way to make a living preaching to eager audiences, mostly female.

Ms. Bernstein is one of a circle of such figures, influenced less by the oeuvre of Candace Bushnell than that of Marianne Williamson, the spiritual lecturer who wrote “A Return to Love: Reflections on the Principles of ‘A Course in Miracles,’” and by other books of pop self-actualization like “The Secret,” “Eat, Pray, Love” and even “Skinny Bitch.”

One of the most prominent is Kris Carr, a former actress who a month after appearing in two beer commercials during the Super Bowl in 2003 was found to have cancer in her liver and lungs. She went on a voyage of self-transformation that she chronicled in a documentary, “Crazy Sexy Cancer,” which aired on TLC in 2007, and was followed by two books.

Her Web site, Crazy Sexy Life, has become a nexus for women who identify themselves as leaders of a new generation of self-empowerment. Bloggers for the site include Rory Freedman, an author of the “Skinny Bitch” diet guides; Ms. Bernstein; and Mallika Chopra, a parenting author whose father is Deepak Chopra.

“We are encouraging people to eat right, to exercise, to tap into their spirituality, to start listening to themselves, and to do it in a way that’s bold and resonates,” Ms. Carr, 38, said by phone from her home in Woodstock, N.Y.

The last few weeks in Ms. Carr’s life demonstrate her newfound stature. She celebrated her birthday and wedding anniversary in New Mexico before heading to San Francisco to speak with magazine editors at VegNews. Then it was on to Los Angeles for meetings about a television show she is developing. She ended the trip in Boston, where she gave the keynote address at a conference of the Association of Physicians Assistants in Oncology.

Other self-styled young gurus focus less on diet and more on spirituality. Before she began counseling other women, Jennifer Macaluso-Gilmore was a hand and foot model with alcohol, financial and relationship problems. After three people close to her, including her mother, died within months of one another in 1999, she wrote a one-woman show about coping, “Making the Best of It,” which attracted strong reviews. Her career picked up, she gave up drinking, and she married a man she had previously been keeping at a distance.

Soon friends were asking how she managed to turn her life around. She offered advice from some of the “600 self-help books” she said she has read. She decided to organize a class at her apartment. “Three friends showed up,” Ms. Macaluso-Gilmore said. “And a week later there were nine women, and seven years later I have seen over 700.”

She charges $100 an hour for private sessions. The core of her message, she said, is, “When you step out into the unknown anything is possible in your life.”

Ms. Macaluso-Gilmore’s meeting space in Midtown is decorated with framed collages of thank-you letters from women who have attended her sessions. “Some of them call me an oracle,” said Ms. Macaluso-Gilmore, 36. “Some call me a guru. But I’m just a girl like anyone else.”

The new wave offered up a few playful names for themselves — “the Charlie’s Angels of Wellness,” “Spiritual Cowgirls” and “Spiritual Superheroines.” It’s clear they are proffering guidance at a time when urban women like themselves are eager for it. Thomas Amelio, managing director of the New York Open Center, which has offered classes on self-transformation for 25 years, said that he has noticed far more women in their early and mid-20s signing up for classes on meditation, shamanism and Ayurvedic healing than ever before. Many started with yoga but have moved on. “They are looking for something that is functional and practical that makes life easier to deal with,” he said.

Some more established self-help and spiritualist leaders are skeptical of the Spiritual Cowgirls. Esther Hicks, who co-wrote a series of books explaining “the law of attraction” said she is dubious of those who preach a hodge-podge of philosophies.

“When they mix what we’re teaching with other stuff that doesn’t work, people get confused,” Ms. Hicks said.

Patrick Williams, the founder of the Institute for Life Coach Training, which certifies life coaches, said untrained coaches probably won’t cause any harm, but they may not do much good.

“A good coach has learned to elicit a client’s best thinking and to have the client say what they haven’t said, dream what they have not dreamed, think what they have not thought about,” Mr. Williams said. “You ask more questions than you give answers.”

But the adherents of these young female gurus continue to swear by — and even emulate — them.

Ilana Arazie, who used to produce a video blog about her dating life, Downtown Diary, discontinued it after becoming a client of Ms. Macaluso-Gilmore. She is preparing to start a new blog, Downtown Dharma, about spiritual pursuits in Manhattan. “You don’t want to be stuck in that role of being the single girl,” Ms. Arazie, 34, said. “You need to look at your life as holistic.”

Sera Beak, 33, the author of “The Red Book: A Deliciously Unorthodox Approach to Igniting Your Divine Spark,” is working on a documentary about women like herself. “We like to have a relationship and a career, but we know this internal search is a priority, too,” she said. “It’s one of the most important things you can do as young woman. You don’t have to wait until you are middle aged.”

Her pitch line for the film — “ ‘The Secret’ meets Buffy the Vampire Slayer in a dark alley, naked” — has attracted notable figures to be interviewed, including Tom Robbins, the author of “Even Cowgirls Get the Blues.”

And Meggan Watterson, 34, a former teacher of world religion at the private Collegiate School for Boys in Manhattan, is using $11,000 she has raised from the Sister Fund, a women’s foundation, and others to start an annual conference. She said she wants to bring together women like Ms. Carr, Ms. Beak and others active in the Sikh and Muslim faiths. “We want to hear the stories of how young women experience and name the divine,” the conference Web site proclaims.

At Ms. Bernstein’s session on Tuesday night, a 27-year-old client shared her fears about having her boyfriend move in with her in the coming days. “I’m afraid that him being in my space won’t make us be friends anymore,” she said.

Ms. Bernstein suggested an exercise in which the woman write her ideal version of the story of her boyfriend moving in, something along the lines of: “It’s really lovely. He shows up. There’s tons of love. The move is effortless. There’s plenty of space for all his things.”

“Write the story the way you want it to happen,” Ms. Bernstein said. “Re-read the story every night until he arrives.”

To the skeptical, this visualizing a future one hopes to make manifest is reminiscent of the simplistic power-of-positive thinking movement that began in the 19th century, part of what is called “New Thought,” and which was repackaged in recent years by the best-seller “The Secret.”

And yet, there is something worth noting about Ms. Bernstein’s vision board, a large bulletin board that runs nearly the length of her living room. It includes news clippings, journal entries and photographs that represent her and her clients’ wishes for the future.

“There is an amazing man out there for me,” someone has written. There is a postcard of Dora the Explorer. And there is a cut-out banner of the Sunday Styles section of The New York Times.

Asked about it, Ms. Bernstein said she had put it up three years ago.

“I’ve been manifesting this story,” she explained.

Correction: Sept. 20, 2009

A previous version of this article omitted part of the title of a book by Marianne Williamson. The full title is “A Return to Love: Reflections on the Principles of ‘A Course in Miracles.’”

Wednesday, September 23, 2009

The Way of Strategy (13): What Makes An Expert

1. a person who has special skill or knowledge in some particular field; specialist; authority: a language expert.

We at C360 Consulting Group are always amazed that the news media has a tendency of interviewing experts who claim that they are the consummate know-it all about a specific subject matter.

Most of them are quite polished in their messages and their viewpoints. Some are extremely biased in their opinions. Our assessment tells that some of these experts are indirectly paid by larger companies to push their products and services. It is uniquely rare that there is not an expert who is not promoting their wares or someone else's product and services.

Our gripe with some of these so-called experts is that they cannot connect their viewpoints and the current scenario with the grand picture of the masses.

Many years ago, our old consulting mentor told us the story behind the value chain of experts, The "Number One"-ranked expert is someone who gets the high profile interviews and contracts (based on his or her past historical achievements).

The "Number Two"-ranked expert is someone who sometimes does the TV news media commentary route when the "Number One" expert is not available. Invariably, he or she indirectly tells people that he/she should be number one. ...

Sometime both experts outsource the work to the other experts while they take the credit.

"Number Three"-ranked expert is the person who rarely promotes him or her selves. Instead, this expert focuses on promoting the profession. He/she receives most of the low profile, middle to upper middle level work and grinds away with very little complaint. Internally, this professional is consistently busy and happy.

When people asks "who is the best?" They would always humbly, pointed to themselves. But they will always say the "Number Three"-ranked expert is the second best. ..."

In our global society, the strong prevails over the weak consistently. However, the smart takes from the strong. ... Most "Number Three"-ranked experts are quite smart (and wise).

Regardless of the extremity of the competition,
the expert is someone who consistently maintains his or her competitive advantage by understanding how everything connects to the grand picture.

In life, "three" is a good number.

Collaboration360 Consultants (C360 Consultants). Copyright:2009 © All rights reserved. Copying, posting and reproduction in any form (without prior consent) is an infringement of copyright.

Saturday, September 19, 2009

The Way of Strategy (12): The Script (2)

note: The picture is from

Sidebar: This post will appeal to the football fans.

As a reminder, the scripting action only works when one has properly assessed the opposition.

Q: How does one used the script to set up the opposition?
A: Some of the scripted run plays are used to set up for various play action pass. While other scripted pass plays are used to set for special run plays.

For example, the offensive coordinator might call a quick sweep on the second play, with the flanker involved in a fake reverse motion, (then a possible flea flicker). After the QB hands off the ball to the running back. He continues with a fake weakside rollout, with a motion of a pass toward a receiver who is sprinting down the field. After the 25 plays are implemented, the offensive coordinator tells the QB to signals this play, with some technical differences where he fakes the handoff, rolls out the weakside, passes the ball to the open man.

In the case of the pass play,, the offensive coordinator might call a short slant pass to the flanker isolated on the weakside. Later in the game, under similar situation, the QB implements the same play, fakes the pass and hands off the ball to the blocking halfback on a slow draw.

As mentioned before, the premise of the script is to reveal the opposition's tendencies that the implementer can exploit later.

In future posts, we will focus on transferring the assessed project data into a strategic overview and an operational script.


Sidebar: There are many ways to set up the opposition. In Ancient China, the military professionals used stratagems that can be found in the 100 Unorthodox Strategies book. We will discuss the topic of unorthodox strategies in a future post.

Sunday, September 13, 2009

The Way of Strategy (11): The Script

update on 08.16.2014
Click here for an technical update of this post.

Football season is here. Armchair quarterbacks rejoice.Beside the utilization of Chinese strategy principles as a process, one of our favorite tools is "The Script."

"The Script" is a game preparation and implementation tool that was invented by Bill Walsh, an American head football coach of the San Francisco 49ers and Stanford University, during which time he popularized the West Coast offense. Walsh went 102–63–1 with the 49ers, winning ten of his fourteen postseason games along with six division titles, three NFC Championship titles, and three Super Bowls. He was named the NFL's Coach of the Year in 1981 and 1984.

The Intent of The Script
The purpose of The Script is to see exactly how the other team reacts to each offensive play at the opening stage of the game. The strategist would use this information to plan the offensive strategy for the remainder of the game. Regardless of the game situation, the disciples of the West Coast Offense are trained to stick to The Script regardless of the down, the distance and the defensive alignment, except for the fourth down. 
Applying the Script Before the Game 
Idealistically,the offensive coordinator informs the players "The Script" one or two practices before game day. On the last practice, the team rehearses "The Script." Beside eliminating anxiety (rather than create anxiety) among the players. the offense coordinator discovers whether the players are able to master those plays and decides whether to adjust the technicalities of the play.

Overall, it requires a great deal of experience, discipline and emotional intelligence to run "The Script" tool.

The Master of the Game PlanPreparation and Execution Perfected

Bill Walsh, ever the innovator, conceived a plan, now routine in the NFL, to "script" in advance the offensive plays he would call early in a game.

Walsh still remembers the criticism and skepticism from the NFL coaching establishment that greeted him in the 1970s when, as an offensive assistant with the Cincinnati Bengals, he started scripting plays. All the planning could be done in the office during the week instead of on the sidelines during the frenzy of a game.

With a script, the offensive players could devote more study time to plays that definitely would be used in the game, as opposed to studying an entire game plan that invariably included a bunch of plays that would not be called.

"It got to the point where our offensive team really wanted to know those plays," Walsh recalled. "The players really appreciate the idea that you're giving them a (head) start on the game. You can sleep easier, you have more confidence going into the game, and you're more at ease.

For the coaches, you can feel comfortable that the game is almost on automatic pilot when it starts."
"You know what's going to be called and there's no reason to make a mistake," veteran tight end Shannon Sharpe said of the system in Denver, where coach Mike Shanahan scripts the first 15 offensive plays every week. "You already know if (the defense does) this, who we're going to. So that makes your job a lot easier."

Just about every team in the NFL now uses some form of scripting. Walsh used to do 25 plays, but most teams now script about 15 plays.
There are, of course, some misconceptions about scripting. While there might be a long script of plays, they are not called blindly in order. "Would you run 25 in order? No," Walsh said. "Let's say, of the 25, you'd run 18 or 19 sort of in order. If something really worked or you saw something in the defense, you'd go back to (a play).

To me, it was just sort of a safety net because there's so much emotion to start the game, you want to think clearly, and this, in a sense, forces you to stay with a regimen that you clinically planned prior to the game."
"The scripting saved us because I couldn't think," he said. "It was minus-35 wind chill, and there was no way I could look at a game plan or pull something out of my head. All I wanted to do was run for cover, go in where it was warm, for survival. So in that case, the plan was what saved us."

Excerpts from NFL Insider/ article from 2002 by Ira Miller.

Questions and Answers on Walsh's Starter Script
Q: Most coaches run a 15 play script. Why did Walsh utilized a 25 play script?
The aim of the 15 play script is to immediately attack the tendencies and the physical weaknesses of the opposition's defense. The 25 play script focused on revealing the entire opposition's defensive arsenal while pinpointing their true weaknesses. We believed that Walsh liked the idea of forcing the opposition to expose their arsenal.Q: What was in Walsh's script?
A: A balance of pass plays and run plays that have never appeared in previous games. Walsh would o
ccasionally throw in one or two gadget plays that the opposition has never seen before.

We have heard one former Niners player referred "The 25 Plays" as "The 25 Lies." The story behind that statement is based on that the opposition became too focused on stopping Walsh's 25 play script that they forgot to focus on their own game.
Retrospectively, it is also a psychological gaming tool and an "informational feedback strategy" tool.

The implementation of a 25 play script requires a person with great patience, control and strategic insight. Bill Walsh was that person.
Rarely does anyone ever talk about the keys for the following:
  • when to stay with the script;
  • when to leave the script; and
  • when to return to it.
The amateurs think that they know what "The Script" is about. However there are a few who understand its true range and the reason why it works.

In the football business, the Script is used by many coaches. Our observations tell us that many of them do not possess the strategic training to use it properly. At the same time, some of the quarterbacks are not trained to run "The Script."

The most difficult challenge for most football teams is to run "The Script" from a no-huddle mode. We will touch on that topic in a future post.


The key to building The Script is to properly assess the competition and the grand situation. In our future book project, we will focus on this topic
Being a fan of world class strategists and an implementer of Best Practices, we recommended to our clients to script their operational strategy. In future, we will touch more on "The Script."

We believed that this set of arcane knowledge is usually given to those who are operating on a "need to know" those under the clause of "they are worthy."

We at C360 usually apply our version of the script in all of our operational situations

 If you are interested in securing an abridged version of our Compass Script, please send us a request at

49ers on cusp of new era - or total failure

Gwen Knapp, Chronicle Staff Writer
Sunday, September 13, 2009

(09-12) 20:41 PDT -- The 49ers' seventh offensive coordinator in seven years used some interesting language late last week. "We always script the first 12 'openers,' " Jimmy Raye said, "the first third down and short, the first third and medium, the first short-yardage play."

We always? Until late January, Raye had not been connected to the 49ers since 1977, when he served as receivers coach for a single year.

He was gone when Bill Walsh appeared two seasons later, transforming the franchise and establishing the principle of scripting the opening plays on offense. By "we always," Raye meant all of his own offenses over the years, from Los Angeles to Tampa Bay to Washington. Like so many other coaches, he said, he must have borrowed the philosophy from Walsh and made it his own.

Today's 49ers have no traditions worth preserving. Small remnants from the dynastic Walsh era may survive, but after six dreary seasons, the phrase "we always" can legitimately precede nothing good. (We always lose at least nine games a season. We always change offensive coordinators.)

... The 49ers would be linked to Walsh only through the brief mentoring he provided for Singletary and the ripple effect that brought scripted openers to Raye. But they would also disengage from the last six years, leaving the threshold of Lost Franchises.

E-mail Gwen Knapp at
This article appeared on page B - 1 of the San Francisco Chronicle

# updated on 09/01/2011

Wednesday, September 9, 2009

The Way of Strategy (10): A Tangible Strategy!

Building and implementing a strategy under a chaotic setting is solitary, poor, nasty, brutish and rarely ever short enough.

- paraphrased from Thomas Hobbes

It is always a challenge to build a strategy that can be adjusted to the parameters of an uncertain setting, with the specific guidelines focused on being efficient.

Our Compass rule for operating under tentative settings is to maintain a few guidelines that enables one to be flexible while focusing on building a predictable and efficient setting by
using metrics and detailed analysis processes.

In competition, a good strategy is built on the theory of establishing order while creating disorder within their competitor settings. It begins by assessing the grand situation and then the different micro situations that comes with it.

Our strategic assessment process begins by identifying the variables that are in play. Then determine a list of general and specific tangible measures that comes with it. The next step is evaluate the tangible risks for each variable.

The quantity of quality information and the professional experience of the strategist usually determines the quality of strategic assessment and planning.

Through the assessment process, one can develop standards that can be used for maintaining performance and quality.
"A strategy without tangible measures is a strategy that borders in the realm of illusions."


Welcoming the New, Improving the Old

FOR decades, companies from Cisco Systems to Staples to Bank of America have worked to embed the basic techniques of Six Sigma, the business approach that relies on measurement and analysis to make operations as efficient as possible.

More recently, in the last 5 to 10 years, they have been told they must master a new set of skills known as “design thinking.” Aiming to help companies innovate, design thinking starts with an intense focus on understanding real problems customers face in their day-to-day lives — often using techniques derived from ethnographers — and then entertains a range of possible solutions.

To many, the two skill sets don’t fit together well, and Chuck Jones, vice president for global consumer design at Whirlpool, explains why that may be so. Design thinkers, he says, are like quantum physicists, able to consider a world in which anything — like traveling at the speed of light — is theoretically possible. But a majority of people, including the Six Sigma advocates in most corporations, think more like Newtonian physicists — focused on measurement along three well-defined dimensions.

Six Sigma, a kit of analytical tools first developed in the 1980s at Motorola, has been embraced by many businesses — big and small. Joy Ulickey, a quality consultant in San Francisco, applied them in 2008 to help a midsize Sonoma winery figure out why it was having so many failed fermentations.

Through a detailed analysis of possible factors affecting fermentation, like yeast type, temperature and the rate of cycling wine through the tanks, Ms. Ulickey identified the primary problem as temperature control. Then she suggested several “countermeasures,” including hiring workers to monitor temperature or investing in newer fermentation tanks. Her work allowed the winery to save hundreds of thousands of dollars a year and improve its wine.

On a much larger scale, it is unimaginable that Intel could produce a single one of its highly complex semiconductor chips or that Procter & Gamble could deliver laundry detergent of consistent quality globally without these types of analytical techniques.

Design thinking can be equally effective, but in different ways. While in business school, Jeff Denby and Jason Kibbey concocted an online underwear company called Pact, applying design thinking to understand prospective customers and to rethink how underwear is developed and sold. They visited underwear stores and asked friends and family to send pictures of the underwear in their dresser drawers, or, for those brave enough, shots of themselves posing in their favorite boxers or panties.

They tested different approaches to marketing, including subscription programs, and different ways of developing stylish products. For example, they considered letting up-and-coming designers compete to create designs showcasing particular causes.

Today, their company, based in Berkeley, Calif., sells organic cotton underwear created by the designer Yves Béhar. The designs use graphics that highlight the work of groups like 826 National, which helps young writers, and a portion of revenue is contributed to those causes.

To survive, many businesses will have to figure out how to incorporate both approaches. Design thinking offers tools for exploring new markets and opportunities; Six Sigma skills can be applied to improve existing products. Companies that adhere strictly to one or the other risk failure. “The practices that make for success at one time can trap firms and contribute to their downfall at a later time,” says Bob Cole, a quality expert and professor emeritus at the Haas School of Business at the University of California, Berkeley.

Professor Cole uses the history of the Japanese DRAM industry to illustrate his point:

In the early 1990s, Japanese DRAM producers doggedly pursued quality improvement, investing in engineering and equipment to develop products of higher and higher quality. The market, however, was shifting from mainframes to personal computers, a shift that South Korean producers observed.

Samsung, for example, released a 128-megabyte DRAM in 2000 that was a perfect fit for vendors of low-priced PCs, and it leveraged that design into other products. By gathering valuable knowledge on emerging user needs, Samsung was able to rapidly respond to a changing market, while Japanese producers slowly left the DRAM field.

According to Michael Barry, a consulting assistant professor at the Hasso Plattner Institute of Design at Stanford and a partner at the design firm Point Forward, the Six Sigma process starts with an assumption about what is good — like higher-quality DRAM chips. Design thinking, meanwhile, inquires as to what is good — as lower-cost, higher-speed DRAM chips were for PCs and other products.

THE different world views, however, can be brought together.

At Whirlpool, Mr. Jones first proved the value of design with the introduction of the Duet washer and dryer. Duet’s novel, easy-to-use, energy-efficient design made Whirlpool a player in the front-loader market. After that success, he invited Whirlpool’s Six Sigma experts to help him improve design processes. They developed various new metrics — for how customers evaluate product quality, for example — that allowed designers and Six Sigma types to understand each other better.

Progressive Insurance has also turned design and Six Sigma techniques into reasonably comfortable bedfellows. In the early 1990s, it started emphasizing showing up at an accident scene and handling situations in real time, according to a 2004 article by Michael Hammer in The Harvard Business Review. That move reflected a designer’s way of thinking about customer needs, but the company was able to execute the idea through its ability to measure, analyze and improve its processes.

Both worlds — the quantum one where designers push boundaries to surprise and delight, and the Newtonian one where workers meet deadlines and margins — are meaningful. The most successful companies will learn to build bridges between them and leverage them both.

Sara Beckman is faculty director of the Management of Technology Program at the Haas School of Business at the University of California, Berkeley.

Monday, September 7, 2009

The Way of Strategy (9): Penetrate and Dominate

China's solar energy businesses assessed the grand settings of their global market terrain in terms of their competitive position, the state of predictability and the configuration of the terrain, the Compass for their strategy was defined.

The advantage of lower operating costs enabled China to gain the control of the marketplace. Their i
mmediate momentum and the timing also allowed them to advance deeply into their competitor's territory and became the bellwether of the market-place. ...

Once China assessed their grand picture. They positioned themselves with a complete top down strategy and implemented with extreme efficiency.

This is a good example of what the "Dao of Competition" (warfare) is supposed to be.


August 25, 2009
China Racing Ahead of U.S. in the Drive to Go Solar

WUXI, China — President Obama wants to make the United States “the world’s leading exporter of renewable energy,” but in his seven months in office, it is China that has stepped on the gas in an effort to become the dominant player in green energy — especially in solar power, and even in the United States.

Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said in an interview here that Suntech, to build market share, is selling solar panels on the American market for less than the cost of the materials, assembly and shipping.

Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation. As Japanese automakers did decades ago, Chinese solar companies are encouraging their United States executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root.

The Obama administration is determined to help the American industry. The energy and Treasury departments announced this month that they would give $2.3 billion in tax credits to clean energy equipment manufacturers. But even in the solar industry, many worry that Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year.

“I don’t see Europe or the United States becoming major producers of solar products — they’ll be consumers,” said Thomas M. Zarrella, the chief executive of GT Solar International, a company in Merrimack, N.H., that sells specialized factory equipment to solar panel makers around the world.

Since March, Chinese governments at the national, provincial and even local level have been competing with one another to offer solar companies ever more generous subsidies, including free land, and cash for research and development. State-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the United States.
Suntech, based here in Wuxi, is on track this year to pass Q-Cells of Germany, to become the world’s second-largest supplier of photovoltaic cells, which would put it behind only First Solar in Tempe, Ariz.

Hot on Suntech’s heels is a growing list of Chinese corporations backed by entrepreneurs, local governments and even the Chinese military, all seeking to capitalize on an industry deemed crucial by China’s top leadership.

Dr. Shi pointed out that other governments, including in the United States, also assist clean energy industries, including with factory construction incentives.

China’s commitment to solar energy is unlikely to make a difference soon to global warming. China’s energy consumption is growing faster than any other country’s, though the United States consumes more today. Beijing’s aim is to generate 20,000 megawatts of solar energy by 2020 — or less than half the capacity of coal-fired power plants that are built in China each year.

Solar energy remains far more expensive to generate than energy from coal, oil, natural gas or even wind. But in addition to heavy Chinese investment and low Chinese costs, the global economic downturn and a decline in European subsidies to buy panels have lowered prices.

The American economic stimulus plan requires any project receiving money to use steel and other construction materials, including solar panels, from countries that have signed the World Trade Organization’s agreement on free trade in government procurement. China has not.

In response to this, and to reduce shipping costs, Suntech plans to announce in the next month or two that it will build a solar panel assembly plant in the United States, said Steven Chan, its president for global sales and marketing.

“It’ll be to facilitate sales — ‘buy American’ and things like that,” Mr. Chan said, adding that the factory would have 75 to 150 workers and be located in Phoenix, or somewhere in Texas.

But 90 percent of the workers at the $30 million factory will be blue-collar laborers, welding together panels from solar wafers made in China, Dr. Shi said.

Yingli Solar, another large Chinese manufacturer, said on Thursday that it also had a “preliminary plan” to assemble panels in the United States.

Western rivals, meanwhile, are struggling. Q-Cells of Germany announced last week that it would lay off 500 of its 2,600 employees because of declining sales. It and two other German companies, Conergy and SolarWorld, are particularly indignant that German subsidies were the main source of demand for solar panels until recently.

“Politicians might ask whether this is still the right way to do this, German taxpayers paying for Asian products,” said Markus Wieser, a Q-Cells spokesman.

But organizing resistance to Chinese exports could be difficult, particularly as Chinese discounting makes green energy more affordable.

Even with Suntech acknowledging that it sells below the marginal cost of producing each additional solar panel — that is, the cost after administrative and development costs are subtracted — any antidumping case, in the United States, for example, would have to show that American companies were losing money as a result.

First Solar — the solar leader, in Tempe — using a different technology from many solar panel manufacturers, is actually profitable, while the new tax credits now becoming available may help other companies.

Even organizing a united American response to Chinese exports could be difficult. Suntech has encouraged executives at its United States operations to take the top posts at the two main American industry groups, partly to make sure that these groups do not rally opposition to imports, Dr. Shi said.

The efforts of Detroit automakers to win protection from Japanese competition in the 1980s were weakened by the presence of Honda in their main trade group; they expelled Honda in 1992.

Some analysts are less pessimistic about the prospects for solar panel manufacturers in the West. Joonki Song, a partner at Photon Consulting in Boston, said that while large Chinese solar panel manufacturers are gaining market share, smaller ones have been struggling.

Mr. Zarrella of GT Solar said that Western providers of factory equipment for solar panel manufacturers would remain competitive, and Dr. Shi said that German equipment providers “have made a lot of money, tons of money.”

The Chinese government is requiring that 80 percent of the equipment for China’s first municipal power plant to use solar energy, to be built in Dunhuang in northwestern China next year, be made in China.

Dr. Shi said his company would try to prevent similar rules in any future projects. The reason is clear: almost 98 percent of Suntech’s production goes overseas.

Copyright 2009 The New York Times Company

Tuesday, September 1, 2009

The Cardinal View: Is "Good Enough" good enough?

A standard that states "Good enough", would last for a limited time line.

To compete properly in an information-driven economy where the copycats outnumbered the innovators (many millions to one), the innovator must develop patentable stuff that forces the opposition to spend a great deal of time and resources to duplicate the same features. The economic settings sometime determines the importance of quality. (Another two strategic options are: the establishment of alliances with trusted competitors and having a good team of intellectual property lawyers watching the possibility of patents.)

Concurrently, the innovators must understand the risk/benefits of going beyond the "Good Enough" standard. This requires one to have a grand picture of their marketing terrain.

A grand picture that enables you to maximize profits, minimize costs and exploit opportunities. Do you assess the grand picture, before building a plan?

Without a complete understanding what is the grand picture, how does one make a right strategic move.

Sidebar: While the masses would rather have their stuff with a "good enough" standard, are you one of the few people who prefer excellence?

The Good Enough Revolution: When Cheap and Simple Is Just Fine

In 2001, Jonathan Kaplan and Ariel Braunstein noticed a quirk in the camera market. All the growth was in expensive digital cameras, but the best-selling units by far were still cheap, disposable film models. That year, a whopping 181 million disposables were sold in the US, compared with around 7 million digital cameras. Spotting an opportunity, Kaplan and Braunstein formed a company called Pure Digital Technologies and set out to see if they could mix the rich chocolate of digital imaging with the mass-market peanut butter of throwaway point-and-shoots. They called their brainchild the Single Use Digital Camera and cobranded it with retailers, mostly pharmacies like CVS.

The concept looked promising, but it turned out to be fatally flawed. The problem, says Simon Fleming-Wood, a member of Pure Digital's founding management team, was that the business model relied on people returning the $20 cameras to stores in order to get prints and a CD. The retailers were supposed to send the used boxes back to Pure Digital, which would refurbish them, reducing the number of new units it had to manufacture. But customers didn't return the cameras fast enough. Some were content to view their pictures on the tiny 1.4-inch LCD and held on to the device, thinking they'd take it in later to get prints. Others figured out how to hack the camera so it would download to a PC, eliminating the need to return the thing altogether.

Brisk sales combined with a lack of speedy returns destroyed the company's thin margins, and the camera failed. But the experience taught Kaplan and Braunstein a lesson: Customers would sacrifice lots of quality for a cheap, convenient device. To keep the price down, Pure Digital had made significant trade-offs. It used inexpensive lenses and other components and limited the number of image-processing chips. The pictures were OK but not great. Yet Pure Digital sold 3 million cameras anyway.

Kaplan and Braunstein also learned something important about camera retailing in general. The market had long been split into two main segments: point-and-shoots (including disposables) and single-lens reflex cameras, which use interchangeable lenses and other high-end accessories. Not surprisingly, the vast majority of cameras sold then—as now—were the handy point-and-shoots; SLRs tended to attract only serious hobbyists and professionals.

Oddly, though, there was no point-and-shoot analogue in video cameras—and that's where the pair saw their next opportunity. Home videocams were almost without exception expensive, complicated devices loaded with features like image stabilization, night-vision mode, and onboard color correction. And even with tools like Apple's iMovie, it was a hassle to get footage off the cameras and onto a computer for editing and sharing. In terms of complexity and price, the camcorder market resembled the SLR market, but with no low-end alternative. Kaplan and Braunstein suspected that there might be a place for a much cheaper, simpler video camera. So they decided to make one.

After some trial and error, Pure Digital released what it called the Flip Ultra in 2007. The stripped-down camcorder—like the Single Use Digital Camera—had lots of downsides. It captured relatively low-quality 640 x 480 footage at a time when Sony, Panasonic, and Canon were launching camcorders capable of recording in 1080 hi-def. It had a minuscule viewing screen, no color-adjustment features, and only the most rudimentary controls. It didn't even have an optical zoom. But it was small (slightly bigger than a pack of smokes), inexpensive ($150, compared with $800 for a midpriced Sony), and so simple to operate—from recording to uploading—that pretty much anyone could figure it out in roughly 6.7 seconds.

Within a few months, Pure Digital could barely keep up with orders. Customers found that the Flip was the perfect way to get homebrew videos onto the suddenly flourishing YouTube, and the camera became a megahit, selling more than 1 million units in its first year. Today—just two years later—the Flip Ultra and its subsequent revisions are the best-selling video cameras in the US, commanding 17 percent of the camcorder market. Sony and Canon are now scrambling to catch up.

The Flip's success stunned the industry, but it shouldn't have. It's just the latest triumph of what might be called Good Enough tech. Cheap, fast, simple tools are suddenly everywhere. We get our breaking news from blogs, we make spotty long-distance calls on Skype, we watch video on small computer screens rather than TVs, and more and more of us are carrying around dinky, low-power netbook computers that are just good enough to meet our surfing and emailing needs. The low end has never been riding higher.

So what happened? Well, in short, technology happened. The world has sped up, become more connected and a whole lot busier. As a result, what consumers want from the products and services they buy is fundamentally changing. We now favor flexibility over high fidelity, convenience over features, quick and dirty over slow and polished. Having it here and now is more important than having it perfect. These changes run so deep and wide, they're actually altering what we mean when we describe a product as "high-quality."

And it's happening everywhere. As more sectors connect to the digital world, from medicine to the military, they too are seeing the rise of Good Enough tools like the Flip. Suddenly what seemed perfect is anything but, and products that appear mediocre at first glance are often the perfect fit.

The good news is that this trend is ideally suited to the times. As the worst recession in 75 years rolls on, it's the light and nimble products that are having all the impact—exactly the type of thing that lean startups and small-scale enterprises are best at. And from impact can come big sales. "When the economy went south before Christmas last year, we worried that sales would be affected," says Pure Digital's Fleming-Wood. "But we sold a ton of cameras. In fact, we exceeded the goals we had set before the economy soured." And this year? Sales, he says, are up 200 percent. (Another payoff: In May, networking giant Cisco acquired Pure Digital for $590 million.)

To some, it looks like the crapification of everything. But it's really an improvement. And businesses need to get used to it, because the Good Enough revolution has only just begun.

Speaking at an Online publishers conference in London last October, New York University new-media studies professor Clay Shirky had a mantra to offer the assembled producers and editors: "Don't believe the myth of quality." When it comes to the future of media on the Web, Shirky sternly warned, resist the reflex to focus on high production values. "We're getting to the point where the Internet can support high-quality content, and it's as if what we've had so far has all been nice—a kind of placeholder—but now the professionals are coming," Shirky said. "That's not true." To reinforce his point, he pointed to the MP3. The music industry initially laughed off the format, he explained, because compared with the CD it sounded terrible. What record labels and retailers failed to recognize was that although MP3 provided relatively low audio quality, it had a number of offsetting positive qualities.

Shirky's point is crucial. By reducing the size of audio files, MP3s allowed us to get music into our computers—and, more important, onto the Internet—at a manageable size. This in turn let us listen to, manage, and manipulate tracks on our PCs, carry thousands of songs in our pockets, purchase songs from our living rooms, and share tracks with friends and even strangers. And as it turned out, those benefits actually mattered a lot more to music lovers than the single measure of quality we had previously applied to recorded music—fidelity. It wasn't long before record labels were wringing their hands over declining CD sales.

"There comes a point at which improving upon the thing that was important in the past is a bad move," Shirky said in a recent interview. "It's actually feeding competitive advantage to outsiders by not recognizing the value of other qualities." In other words, companies that focus on traditional measures of quality—fidelity, resolution, features—can become myopic and fail to address other, now essential attributes like convenience and shareability. And that means someone else can come along and drink their milk shake.

To a degree, the MP3 follows the classic pattern of a disruptive technology, as outlined by Clayton Christensen in his 1997 book The Innovator's Dilemma. Disruptive technologies, Christensen explains, often enter at the bottom of the market, where they are ignored by established players. These technologies then grow in power and sophistication to the point where they eclipse the old systems.

That is certainly part of what happens with Good Enough tech: MP3s entered at the bottom of the market, were ignored, and then turned the music business upside down. But oddly, audio quality never really readjusted upward. Sure, software engineers have cooked up new encoding algorithms that produce fuller sound without drastically increasing file sizes. And with recent increases in bandwidth and the advent of giant hard drives, it's now even possible to maintain, share, and carry vast libraries of uncompressed files. But better-sounding options have hardly gained any ground on the lo-fi MP3. The big advance—the one that had all the impact—was the move to easier-to-manage bits. Compared with that, improved sound quality just doesn't move the needle.

Of course, there are those who appreciate the richer sound of uncompressed files, CDs, or even vinyl records (regarded by some audiophiles as the highest-fi format available). But most of us don't give it a second thought. In fact, there's evidence that consumers are simply adapting to the MP3's thin sound. Jonathan Berger, a professor of music at Stanford University, recently completed a six-year study of his students. Every year he asked new arrivals in his class to listen to the same musical excerpts played in a variety of digital formats—from standard MP3s to high-fidelity uncompressed files—and rate their preferences. Every year, he reports, more and more students preferred the sound of MP3s, particularly for rock music. They've grown accustomed to what Berger calls the percussive sizzle—aka distortion—found in compressed music. To them, that's what music is supposed to sound like.

What has happened with the MP3 format and other Good Enough technologies is that the qualities we value have simply changed. And the change is so profound that the old measures have almost lost their meaning. Call it the MP3 effect.

We've seen it again and again. Consider, for example, the rise of cloud computing. For years, software was something you bought and installed on your hard drive. A lot of it was made by Microsoft, which solidified its dominance by releasing ever more powerful, feature-laden updates. But with the advent of services like Gmail and Zoho Writer, many users are now turning to the Web for basic tasks like word processing, spreadsheets, and email. These cloud apps have inherent limits: They run through a browser window and can't directly access your local hard drive or processor. They lack features. Their performance depends on the strength of your Internet connection. Nevertheless, tens of millions of people use Gmail, while Zoho Writer boasts 1.8 million users and is growing at a rate of 100,000 subscribers a month. Microsoft, of course, is now jumping into the cloud as fast as it can. Redmond says that Office 2010 will be largely cloud-based. Not to be outdone, Google recently announced a mostly cloud-based operating system that will work in tandem with the company's Chrome browser.

Web tools are succeeding because they're Good Enough. They do most of what we need from a word processor or a spreadsheet or an email program or even an OS. But, like the MP3, they also offer other advantages. You can access them from any computer. If your hard drive crashes, you don't lose your work. And they are incredibly cheap—free in the case of simple tools or just a few dollars a month per user in the case of business apps.

Compare these qualities with those of the MP3 and the Flip, and a clear pattern emerges. The attributes that now matter most all fall under the rubric of accessibility. Thanks to the speed and connectivity of the digital age, we've stopped fussing over pixel counts, sample rates, and feature lists. Instead, we're now focused on three things: ease of use, continuous availability, and low price. Is it simple to get what we want out of the technology? Is it available everywhere, all the time—or as close to that ideal as possible? And is it so cheap that we don't have to think about price? Products that benefit from the MP3 effect capitalize on one or more of these qualities. And they'll happily sacrifice power and features to do so.

By traditional military standards, the MQ-1 Predator isn't much of a plane. Its top speed is a mere 135 miles per hour. It has an altitude ceiling of 25,000 feet. It carries only two 100-pound Hellfire missiles. It has a propeller. By comparison, an A-10 can travel 420 mph, cruise at 45,000 feet, and carry up to 16,000 pounds of bombs—not to mention a 30-mm gatling gun. An F-16 can reach a blistering 1,500 mph (Mach 2), climb to more than 50,000 feet, and back up its 20-mm multibarrel canon with six missiles.

All three of these aircraft are used for surveillance and close air support. But more and more, the military is relying on the unmanned Predator. In the past two years, it has logged more than 250,000 flight hours, nearly all of them in combat. It has been deployed to the Balkans, Pakistan, Afghanistan, and Iraq.

Why, if manned planes are so superior, is the Predator saturating the combat market? Because military aircraft are experiencing their own version of the MP3 effect.

Over the past few decades, the armed services—like many industries—have been radically changed by the Internet and other modern communications technologies. Now that the military can digitize and share information quickly, engagements are conducted differently: Greater emphasis is being put on "situational awareness," the ability of remote commanders to know what's happening on a battlefield at all times. This in turn has altered what the military looks for in a plane, much the same way small digital files changed what music fans value in a recording.

There is at least one measure by which the Predator has piloted aircraft handily beat: the ability to maintain a constant presence in the air. That's because the drones are relatively cheap to build, can fly for more than 20 hours straight, and don't require pilots who need sleep, food, and bathroom breaks (and who might die if the plane is shot down). In Afghanistan and Iraq, a Predator is available pretty much anytime the military needs one. Accessibility, in other words, has become a dominant aircraft value—prized as much as, and sometimes more than, speed, altitude, and armament.

"Sustaining the sorts of operations we conduct with the Predator used to be virtually impossible," says Eric Mathewson, director of the Air Force Unmanned Aircraft Systems Task Force. "The idea of putting an aircraft over an area of interest 24 hours a day, 365 days a year, was simply unsustainable."

Piloted aircraft are still valuable, he's quick to add, but because the Predator can linger, it has enabled a new type of strategy—remotely guided surgical strikes with fewer troops and armaments. It's a lesson that surprised the Air Force and other services, Mathewson says, but one that has been learned definitively. "We're now looking at aircraft capabilities for the future that are even more persistent," he says. "We're exploring airships again, which could stay airborne for up to five years."

The impact of the Predator illustrates the potential of the MP3 effect to transform almost any market. In fact, Good Enough tech is already gaining a foothold in two other huge industries: the legal profession and health care.

Richard Granat is a pioneer in a field called elawyering. It shouldn't be confused with Web sites that merely offer legal documents for downloading, Granat explains. Elawyering involves actual lawyers, and clients who use these services get help sorting through legal issues.

Granat, who runs his own law firm and cochairs the American Bar Association's task force on elawyering, has designed and marketed a number of Web tools that walk people through common legal procedures. He created a child-support calculator, for example, which assists couples going through relatively amicable divorces. There's also a tool to help people decide whether they need Chapter 7 or Chapter 13 bankruptcy. These widgets then generate legal forms, which may be reviewed by a licensed attorney who can make suggestions or offer advice over the phone.

It turns out to be a remarkably efficient way of offering what Granat calls legal transaction services—tasks that are document intensive. For everything from wills to adoptions to shareholder agreements, elawyering has numerous advantages. It's cheaper, for example; a no-fault divorce, Granat says, might run a fifth of what seeing an attorney would cost. It's also faster—customers can access the tools anytime and never have to interrupt their day to meet with someone in a distant office. Simply put, elawyering makes certain legal services more accessible.

There are trade-offs, of course. "The relationship has less richness than what you'd get from sitting in a lawyer's office," Granat says. "And if you have an issue that's more complex, then you still need to see a lawyer face-to-face." In other words, it's a lower-fidelity experience.

But for most simple legal interactions, elawyering is, well, Good Enough. It gets the job done, even if it doesn't let you ask every question or address every contingency. And not surprisingly, it's on the rise. "Elawyering will be mainstream in three years," Granat says. "I predict that in five years, if you're a small firm and don't offer this kind of Web service, you're not going to make it."

In the case of health care, the Good Enough mindset can be seen in a new initiative by Kaiser Permanente. The largest not-for-profit medical organization in the country, Kaiser has long relied on a simple strategy of building complete, self-sustaining hospitals—employing 50 doctors or more—in each region it serves. "It's an efficient model," says Michele Flanagin, Kaiser's vice president of delivery systems strategy. "It offers one-stop shopping: pharmacy and radiology and everything you want from health care in one building." But that approach forces patients who don't live near a hospital to drive a long way for even the most routine doctor's appointment.

As it happens, though, Kaiser has become one of the most technologically advanced health care providers in the country, digitizing everything from patient records and doctors' notes to lab data and prescriptions and putting it all online. The system is networked, so patients can email their doctor, check lab results, and make appointments from their PC or mobile Web device. Getting a referral doesn't mean carrying medical records from one doctor to another, as it does at many hospitals.

In 2007, Flanagin and her colleagues wondered what would happen if, instead of building a hospital in a new area, Kaiser just leased space in a strip mall, set up a high tech office, and hired two doctors to staff it. Thanks to the digitization of records, patients could go to this "microclinic" for most of their needs and seamlessly transition to a hospital farther away when necessary. So Flanagin and her team began a series of trials to see what such an office could do. They cut everything they could out of the clinics: no pharmacy, no radiology. They even explored cutting the receptionist in favor of an ATM-like kiosk where patients would check in with their Kaiser card.

What they found is that the system performed very well. Two doctors working out of a microclinic could meet 80 percent of a typical patient's needs. With a hi-def video conferencing add-on, members could even link to a nearby hospital for a quick consult with a specialist. Patients would still need to travel to a full-size facility for major trauma, surgery, or access to expensive diagnostic equipment, but those are situations that arise infrequently.

If that 80 percent number rings a bell, it's because of the famous Pareto principle, also known as the 80/20 rule. And it happens to be a recurring theme in Good Enough products. You can think of it this way: 20 percent of the effort, features, or investment often delivers 80 percent of the value to consumers. That means you can drastically simplify a product or service in order to make it more accessible and still keep 80 percent of what users want—making it Good Enough—which is exactly what Kaiser did.

Flanagin believes these clinics will enable Kaiser to add thousands of new members. And they'll do it for less. The per-member cost at a microclinic is roughly half that of a full Kaiser hospital. The first microclinic is set to open in Hawaii early next year. Medical care is now poised for its own manifestation of the MP3 effect.

The phenomenon certainly won't stop with hospitals, lawyers, and military campaigns. As more and more industries move their business online, they too will find success in Good Enough tools that focus on maximizing accessibility. It's a reflection of our new value system. We've changed. To benefit from the MP3 effect, companies will have to change as well.

No one understands this better than the folks at Pure Digital Technologies. Two years ago, the Flip Ultra nailed all three of those accessibility traits: It was significantly less expensive than other digital video cameras—so much so, it almost seemed an impulse buy in comparison. It was much easier to use, not only for shooting video but also for uploading clips to the Internet. And its pocketable size and Web-sharing abilities made video available anytime, anywhere. The Flip hit the Good Enough trifecta.

When asked why he thinks the Flip has succeeded where more powerful videocams—and even new Flip knockoffs from the likes of Sony—have failed, Pure Digital's Fleming-Wood has an interesting answer: "I think it's because we have a better product." What's odd is that executives at Sony and Canon would likely say the same thing—after all, their models have far more features and often produce sharper images. But Fleming-Wood is using a different definition of "better." He now defines quality entirely in terms of ease of use—how easy it is to shoot and share the video. "The one thing everyone wants to do with their footage is show it to someone else," he says.

Even so, it's easy to imagine that feature creep will one day seep into the Flip. After all, the company recently released models that record in HD, so why not image stabilization or a bigger LCD—or hey, how about a touchscreen! "We will always prioritize accessibility over features," Fleming-Wood insists. The increase in pixel count, he says, is simply the result of Moore's law advances in chip speed and storage capacity, not a signal that Pure Digital is changing its focus. Once HD components became available that would not drastically raise the price of the camera or make it harder to use, "it made no sense not to go HD," Fleming-Wood says. He points out that Pure Digital has yet to include other features like an optical zoom or image stabilization, adding that he knows people love the Flip because of how simple it makes recording and sharing video. "We will never sacrifice that."

When he thinks about how the Flip line will improve in the future, Fleming-Wood envisions adding features that will make the video even easier to share. "Well, we could add Wi-Fi or cell connectivity, so if you were filming your kid's soccer game, you could be uploading the footage to the Web in real time so Grandma could watch from home," he says with a daydreamer's enthusiasm. To do something that ambitious, of course, might require sacrificing some of that HD image quality. No problem, as long as it's Good Enough.

Senior editor Robert Capps ( wrote about Judd Apatow in issue 15.06.