A New Start

FT: Inquisition

the Spanish Inquisition and its shorter-lived Portuguese cousin were “a significant force in four continents for more than three centuries”, operating in their homelands and in colonies from Brazil to Angola and the Philippines.

In Green’s analysis, the Iberian inquisitions were tools of the state, not of the church, but in the long run the state was weakened by their excesses. Their stifling effect on intellectual enquiry fuelled the decline of the Spanish and Portuguese empires and opened fissures in Spanish political life which reached their head in the civil war and still exist today.

The Inquisition might appear quintessentially medieval. But Green sees it as a precursor to modern totalitarianism.

The Inquisitions were fuelled by corruption and malice, and many inquisitors were sexually predatory. The downfall of Archbishop Carranza of Toledo at the hands of Inquisitor-General Fernando Valdes was set in motion by Valdes’s jealousy at Carranza’s appointment; it was abetted by the enmity of the Dominican theologian Melchor Cano. But jealous spouses, embittered in-laws and envious neighbours all provided the underpinning for the grand persecution. One of Green’s examples stands out: a gardener quarrelled with an inquisitor’s page who had snatched a toy from his child, and spent the next nine months imprisoned in chains.

The Inquisitions hungered for new scapegoats. After Jews and Muslims came converts. Then Protestants were the bogeymen: English sailors were pulled off ships and tortured, catechisms scrutinised for signs of crypto-Lutheranism. By the mid-18th century, Freemasons were the target.

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Inquisition

Review by David Honigmann

Published: July 28 2007 01:40 | Last updated: July 28 2007 01:40

Inquisition: The Reign of Fear
By Toby Green
Macmillan £20, 458 pages
FT bookshop price: £16

Between 1478 and 1812, the Spanish Inquisition tried more than 100,000 people for heresy, and executed thousands of them. Revisionist historians have minimised its horror, but as Toby Green sets out in his thematic history, the Spanish Inquisition and its shorter-lived Portuguese cousin were “a significant force in four continents for more than three centuries”, operating in their homelands and in colonies from Brazil to Angola and the Philippines.

In Green’s analysis, the Iberian inquisitions were tools of the state, not of the church, but in the long run the state was weakened by their excesses. Their stifling effect on intellectual enquiry fuelled the decline of the Spanish and Portuguese empires and opened fissures in Spanish political life which reached their head in the civil war and still exist today.

The Inquisition might appear quintessentially medieval. But Green sees it as a precursor to modern totalitarianism. The Inquisitions were inherently bureaucratic: they are easy for historians to study because they recorded everything. Green’s work in the archives focuses on individuals, which prevents the victims becoming mere statistics.

There is a pathos in the inventory of the possessions of Francisco Pinero, arrested in 1636: “One mattress ... four cedar chairs with broken seats... An old parasol.” As well as being bureaucratic, the Inquisitions were modern in their love of euphemism. Orwell would have appreciated the use of “relaxed”, meaning “tortured to death”, or auto da fe as an anaesthetic term for a public judicial killing.

The Inquisitions were fuelled by corruption and malice, and many inquisitors were sexually predatory. The downfall of Archbishop Carranza of Toledo at the hands of Inquisitor-General Fernando Valdes was set in motion by Valdes’s jealousy at Carranza’s appointment; it was abetted by the enmity of the Dominican theologian Melchor Cano. But jealous spouses, embittered in-laws and envious neighbours all provided the underpinning for the grand persecution. One of Green’s examples stands out: a gardener quarrelled with an inquisitor’s page who had snatched a toy from his child, and spent the next nine months imprisoned in chains.

The Inquisitions hungered for new scapegoats. After Jews and Muslims came converts. Then Protestants were the bogeymen: English sailors were pulled off ships and tortured, catechisms scrutinised for signs of crypto-Lutheranism. By the mid-18th century, Freemasons were the target.

For the most part, the Inquisition abstained from the witch-hunts that flourished in northern Europe, but as Green says, it had “other scapegoats to persecute without the need to invent witches”. The Inquisition cast a long shadow, and in the 20th century, many learnt from its techniques.

Copyright The Financial Times Limited 2007

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FT:The devil in democracy

The devil in democracy

Review by Samuel Brittan

Published: July 28 2007 01:15 | Last updated: July 28 2007 01:15

Anyone looking for evidence of cultural dumbing down need look no further than the way in which “democracy” has become a one-word slogan for all desirable objectives. What do both American neo-conservatives and European liberal interventionists say they hope to achieve in the Middle East? “Democracy.” What is the most common complaint in elite circles against the working of the European Union? The “democratic deficit”.

The simplest definition of democracy is decision by voting. The more sensible propagators of democratic slogans are aware of the dangers of oppression of minorities or the havoc that can be wrought by ill-informed public opinion. From here there are two ways to go. You can say that true democracy involves far more than occasional voting in nationwide elections; or you can stick with the simple definition, and accept that democracy is just a particular decision rule.

Bryan Caplan’s The Myth of the Rational Voter usefully extends the discussion by linking it with “public choice” theory. This is simply an application of economic principles to the behaviour of voters and governments, which has become absorbed into US mainstream economics. It is still relatively unknown in Europe, however, where governments are assumed to be either guardians of the public good or devils incarnate.

Public choice theory faces a dilemma. A rational and self-interested person has no incentive to study political issues, as the chances of his or her determining the outcome are negligible. This has become known as “rational ignorance”.

Caplan maintains that the reality is much worse. He shows that voters are not just ignorant but systematically biased in favour of mistaken views. He finds, for instance, that while most economists believe that the laws of supply and demand are responsible for increases in petrol prices, the public still overwhelmingly believes that it is due to oil companies trying to increase profits.

Caplan is a far better writer than most economists. But he does not really explain how these misperceptions arise. He is far from a market fundamentalist and stresses that most market failure has been effectively analysed by mainstream economists. But he does believe that the weaknesses of democracy should create a bias in favour of market rather than political solution in cases of doubt.

One criticism of his analysis might be that economic change involves loss as well as gain. Mid-20th-century economists accepted that a change was for the better only if the losers could somehow be compensated, whether by welfare state provisions or a “trickle down” effect in the longer term. But as there is no guarantee of this happening, an act of faith is involved in espousing market solutions.

It is, however, a common fallacy that the major issues affecting nations are economic. Surely 9/11, or recent troubles in Iraq and the Middle East, should have cured us of this notion. To be fair, Caplan does suggest that his approach should be extended to other topics.

Most western nations have developed a variety of safeguards against the abuse of democracy. They include written constitutions, second chambers, Human Rights legislation, judicial review of laws, international courts and much else. They need to be strengthened rather than pushed aside.

This is where Frank Vibert’s The Rise of the Unelected, becomes highly relevant. The traditional constraints on abuse by elected pluralities come from the division of powers between the executive, the legislative and the judicial spheres - something that Tony Blair never understood. Vibert points out that these constraints are feebler than they used to be. He now places his hopes on a fourth arm, “unelected bodies”, more usually known as quangos.

Vibert hopes to make these bodies more effective by developing codes of conduct and professional standards for them. But can the same rules really apply to such diverse bodies as - to take a few examples from his list - the BBC, the Medical Research Council and the Curriculum Authority?

Personally, I would place most importance on a more careful use of language. Never let anyone, however eminent, get away with using “democracy” as shorthand for everything politically desirable.

www.samuelbrittan.co.uk

The Myth of the Rational Voter: Why Democracies Choose Bad Policies
By Bryan Caplan
Princeton University Press £17.95 280 pages
FT bookshop price: £14.36

The Rise of the Unelected: Democracy and the New Separation of Powers
By Frank Vibert
Cambridge University Press £15.99 210 pages
FT bookshop price: £12.79

Copyright The Financial Times Limited 2007

FT: The ancient art of globalisation

As empires go, the Portuguese seems to get less attention than those that followed. But Portugal was the first European nation to build an extensive commercial empire, creating a global network that relied more on trade than conquest of land. In the process, they not only made contact with regions previously unknown to Europeans, but also left a legacy that was more cultural than political.

At many of the places where the Portuguese landed, art was commissioned of local craftspeople for consumption back home...the objects had a dramatic effect on Europe's knowledge of the outside world.

Each of the objects at the Sackler shows how new artistic techniques developed as Portuguese sailors, missionaries and traders touched each culture they encountered. With much of the furniture, decorative features such as carved figures were copied from European woodcuts given to local artists to follow. But, left to their own devices, the artists would also incorporate local twists.

Artistic licence worked in other ways too. While the empire had a huge effect on European culture, its effect on Africa, Asia and Brazil was, as guest curator Jay Levenson points out, quite different. Jesuit missionaries who accompanied the Portuguese traders, anxious to impress the Asian ruling elites, brought not only religious images but also the latest maps and astronomical charts. The result? Portuguese colonists were often regarded with curiosity and amusement as they arrived onshore with sundials, globes and astrolabes.

They were even incorporated into the local artwork...The humour was not limited to Japan.

This two-way mirror on the Portuguese empire gives the exhibition its main thematic thread, showing that Europe's first naval empire connected civilisations for the first time through oceans that had hitherto divided humanity. Julian Raby, the Sackler's director, says the exhibition attempts to "catch that moment of wonder" as the world enfolded before the eyes of Europeans, and as the rest of the world encountered Europe, from the Benin kingdom of Nigeria to the shogunate of Japan.

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The ancient art of globalisation

By Jeremy Grant

Published: July 24 2007 03:00 | Last updated: July 24 2007 03:00

In 1502, an Italian diplomatic agent working in Lisbon for the Duke Ercole d'Este of Ferrara pulled off what must rank as one of the boldest thefts of a state secret. Somehow, he managed to make off with an item of inestimable value to the Portuguese king: a copy of the "Cantino Planisphere", a large map. This was no ordinary map. Using information brought back by Portuguese sailors in the latter half of the 15th century, it represented the most accurate view of the known world at that time, allowing the Portuguese to project their emerging maritime empire more effectively than any rival.

With the beginning of the reign of João II in 1481, Lisbon had become the seat of a vast project of exploration, carried out along the African coasts, with the objective of reaching the Indian Ocean and southern Asia. The Portuguese had begun their explorations in the early part of the century, colonising Madeira and the Azores, moving later along the west coast of Africa in search of slaves and gold. Asia soon followed, then Brazil.

Royal cartographers fashioned the map using information brought back by sailors from four series of voyages: Columbus to the Caribbean; Pedro Álvarez Cabral to Brazil; Vasco da Gama to eastern Africa and India; and finally the brothers Corte-Real to Greenland and Newfoundland. Except for Columbus, all had sailed under the Portuguese flag. The original of the Cantino map is presumed to have been lost in the Lisbon earthquake of 1755. But the stolen version - a copy - has been housed at a library in Modena ever since.

This summer, its three fragile panels of vellum made their first journey outside Europe to be part of Encompassing the Globe at Washington's Sackler Gallery. Six years in the making, the exhibition of about 250 objects produced by each of the cultures touched by Portugal's early trade routes is the most ambitious attempt yet to portray the extent and influence of the Portuguese maritime empire.

As empires go, the Portuguese seems to get less attention than those that followed. But Portugal was the first European nation to build an extensive commercial empire, creating a global network that relied more on trade than conquest of land. In the process, they not only made contact with regions previously unknown to Europeans, but also left a legacy that was more cultural than political.

At many of the places where the Portuguese landed, art was commissioned of local craftspeople for consumption back home. Merchants imported luxury goods such as ivory fans from Sri Lanka, tortoiseshell and silver flasks from India; and saltcellars from Sierra Leone. Shipped back to Lisbon, they quickly entered princely "cabinets of wonder" and other aristocratic collections. Like the maps that were so coveted by Lisbon's rivals, the objects had a dramatic effect on Europe's knowledge of the outside world.

Each of the objects at the Sackler shows how new artistic techniques developed as Portuguese sailors, missionaries and traders touched each culture they encountered. With much of the furniture, decorative features such as carved figures were copied from European woodcuts given to local artists to follow. But, left to their own devices, the artists would also incorporate local twists.

Ivory saltcellars made in Africa, for example, were popular back in Lisbon. On one example from Sierra Leone - reached by the Portuguese in 1460 - a sphere bearing the motto of king Manuel I is supported by the writhing coils of snakes, resting on three carved lions - clearly African touches. Porcelain made in China at the same time gets similar treatment. Manuel's coat of arms appears on blue and white bowls alongside an "Ave Maria" inscription and a Buddhist lion, in one example.

Artistic licence worked in other ways too. While the empire had a huge effect on European culture, its effect on Africa, Asia and Brazil was, as guest curator Jay Levenson points out, quite different. Jesuit missionaries who accompanied the Portuguese traders, anxious to impress the Asian ruling elites, brought not only religious images but also the latest maps and astronomical charts. The result? Portuguese colonists were often regarded with curiosity and amusement as they arrived onshore with sundials, globes and astrolabes.

They were even incorporated into the local artwork. In a stunning six-panel folding screen made for the domestic market, entitled "Southern Barbarians in Japan", a row of three Jesuits - and a Franciscan friar - appear on a shoreline, welcoming a ship full of Portuguese merchants. The Europeans are portrayed wearing the baggy pantaloons that were common at the time but which were clearly a source of amusement for the Japanese. Portuguese figures in pantaloons also appear on the top of wooden writing cases and - in one fabulous example - a tiered food box, where the exaggerated noses of the Portuguese reveal another source of light mockery.

The humour was not limited to Japan. In India, miniatures painted in the late 16th and 17th centuries by artists of the Mughal court provide a window on the activities of the Portuguese in India, where they created a series of fortresses, trading posts and strategic coastal cities that ultimately stretched from Mozambique to Macao. In one picture of a Portuguese family in Hormuz, the local artists has them dining at a table in a water-filled pool, to escape the heat.

This two-way mirror on the Portuguese empire gives the exhibition its main thematic thread, showing that Europe's first naval empire connected civilisations for the first time through oceans that had hitherto divided humanity. Julian Raby, the Sackler's director, says the exhibition attempts to "catch that moment of wonder" as the world enfolded before the eyes of Europeans, and as the rest of the world encountered Europe, from the Benin kingdom of Nigeria to the shogunate of Japan.

If Portugal was the first actor in a new age of globalisation, it was no mean feat for a country that, in the 15th century, had a population of
only 1m.

'Encompassing the Globe: Portugal and the world in the 16th and 17th centuries' continues until September 16,Tel +1 202 633 4880.

Copyright The Financial Times Limited 2007

FT: Mania for measuring will send you off target

Mania for measuring will send you off target

By Stefan Stern

Published: July 23 2007 17:59 | Last updated: July 23 2007 17:59

Imagine if this column operated like a public company. Would I feel the need to offer editorial guidance, just as companies give guidance on future earnings, in advance of each article? It’s not clear to me what I could usefully tell you – except that, encouragingly, the finishing line will be only about 850 words away.

But if I did provide readers with this guidance, I would then face the next horrible challenge: meeting expectations. Would I be punished in the market if I failed to do so?

Earnings guidance is such a flawed, misleading and counter-productive activity that I wonder why corporate leaders are still prepared to spend any time on it. Why bother offering up these guesstimates that only help short-term traders make more money, and that expose your share price to greater volatility?

Nervous executives who fear even more punishment at the hands of investors should they stop giving out this guidance can take heart from two recent reports, both produced by a body of distinguished authors.

In the middle of last month the American Aspen Institute published “Long-term value creation: guiding principles for corporations and investors”, followed two weeks later by the (also US-based) Committee for Economic Development’s “Built to last: focusing corporations on long-term performance”.

Both reports criticised the practice of offering earnings guidance and urged corporate leaders to conduct more grown-up, substantial conversations with their shareholders about the long-term aims of their businesses.

But it’s not just the short-termism ethos of the guidance process that is troubling. Managers who place so much faith in dodgy forecasts are fundamentally misunderstanding how organisations really work, and how they can be made to work better.

Let’s track back a bit from those quarterly earnings guidance figures. What are they based on? Essentially, the best guesses of divisional leaders, who are trying to anticipate future demand and future performance. And how do managers try to ensure that these forecasts are hit? Performance targets are set, based on either an optimistic assessment of the recent past, or hopeful expectations about the future.

Either way, uncertainty and inaccuracy are piled upon each other, leading to guaranteed error. Companies either surprise or disappoint the markets, and just occasionally meet the arbitrary expectations they have created. Not for nothing has management by forecast been compared with driving a car by looking only in the rear-view mirror.

But surely measurement is everything in business? “What gets measured gets managed,” runs the old saw. Yes – and what gets measured gets manipulated.

Targets distort people’s behaviour, and rarely, in the long term, for the good. Look at former chief executive Bob Nardelli’s introduction of Six Sigma disciplines at Home Depot, the DIY chain, in the US. “Facts are friendly,” he declared, and urged vigorous target-setting for all sorts of activities.

But staff eventually complained that so much time was being given over to measurement that there was little left to devote to customers. Home Depot hit all its efficiency targets but became the least popular major retailer in the country. Mr Nardelli quit the company in January.

One of the most forthright and persuasive critics of the targets culture is John Seddon, managing director of UK-based consultancy Vanguard. He argues that there is no reliable way of setting targets. And targets drive waste into the system. What does “doing 10 per cent better next year” mean if your current way of doing things is hopelessly wrong? You have to change the system, not burden the existing (and faulty) one with more targets. Instead of learning how to do your job differently, and better, people simply adapt their current behaviour to meet their new target.

While some big goals – such as, in the UK, cutting waiting lists to see senior doctors – have helped focus minds, they have dealt with only part of the problem. And fixing part of a struggling system places more strain everywhere else.

Mr Seddon says managers should only use measures that are derived from the work that needs to be done. These measures will be meaningful, and will focus attention on activity that actually creates value.

While the UK government, under the former premier Tony Blair, seemed obsessed by targets – such as waiting times in a hospital’s accident and emergency department (but with little regard to “patient outcomes”), or pass rates of exams (no matter how easy they were to pass) – under the new prime minister, Gordon Brown, things seem to be changing.

Last week cabinet minister Andy Burnham announced that of the 110 key performance targets introduced by the government in the past 10 years, only about 30 will survive.

Perhaps the wisdom of HL Mencken, the American journalist, has finally been heeded. Targets are a simple solution for complicated problems. And, as Mencken said: “For every complicated problem there is an answer that is clear, simple – and wrong.”

Copyright The Financial Times Limited 2007

NY Times: C.E.O. Libraries Reveal Keys to Success

C.E.O. Libraries Reveal Keys to Success

Jim Wilson/The New York Times

Michael Moritz, venture capitalist and owner of a huge library, says he can’t discard books.

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By HARRIET RUBIN

Published: July 21, 2007

 

Michael Moritz, the venture capitalist who built a personal $1.5 billion fortune discovering the likes of Google, YouTube, Yahoo and PayPal, and taking them public, may seem preternaturally in tune with new media. But it is the imprint of old media — books by the thousands sprawling through his Bay Area house — that occupies his mind.

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Books in the California home of Michael Moritz.

   

“My wife calls me the Imelda Marcos of books,” Mr. Moritz said in an interview. “As soon as a book enters our home it is guaranteed a permanent place in our lives. Because I have never been able to part with even one, they have gradually accumulated like sediment.”

Serious leaders who are serious readers build personal libraries dedicated to how to think, not how to compete. Ken Lopez, a bookseller in Hadley, Mass., says it is impossible to put together a serious library on almost any subject for less than several hundred thousand dollars.

Perhaps that is why — more than their sex lives or bank accounts — chief executives keep their libraries private. Few Nike colleagues, for example, ever saw the personal library of the founder, Phil Knight, a room behind his formal office. To enter, one had to remove one’s shoes and bow: the ceilings were low, the space intimate, the degree of reverence demanded for these volumes on Asian history, art and poetry greater than any the self-effacing Mr. Knight, who is no longer chief executive, demanded for himself.

The Knight collection remains in the Nike headquarters. “Of course the library still exists,” Mr. Knight said in an interview. “I’m always learning.”

Until recently when Steven P.  Jobs of Apple sold his collection, he reportedly had an “inexhaustible interest” in the books of William Blake — the mad visionary 18th-century mystic poet and artist. Perhaps future historians will track down Mr. Jobs’s Blake library to trace the inspiration for Pixar and the grail-like appeal of the iPhone.

If there is a C.E.O. canon, its rule is this: “Don’t follow your mentors, follow your mentors’ mentors,” suggests David Leach, chief executive of the American Medical Association’s accreditation division. Mr. Leach has stocked his cabin in the woods of North Carolina with the collected works of Aristotle.

Forget finding the business best-seller list in these libraries. “I try to vary my reading diet and ensure that I read more fiction than nonfiction,” Mr. Moritz said. “I rarely read business books, except for Andy Grove’s ‘Swimming Across,’ which has nothing to do with business but describes the emotional foundation of a remarkable man. I re-read from time to time T. E. Lawrence’s ‘Seven Pillars of Wisdom,’ an exquisite lyric of derring-do, the navigation of strange places and the imaginative ruses of a peculiar character. It has to be the best book ever written about leading people from atop a camel.” Students of power should take note that C.E.O.’s are starting to collect books on climate change and global warming, not Al Gore’s tomes but books from the 15th century about the weather, Egyptian droughts, even replicas of Sumerian tablets recording extraordinary changes in climate, according to John Windle, the owner of John Windle Antiquarian Booksellers in San Francisco.

Darwin’s “Origin of Species” was priced at a few thousand dollars in the 1950s. “Then DNA became the scientific rage,” said Mr. Windle. “Now copies are selling for $250,000. But the desire to own a piece of Darwin’s mind is coming to an end. I have a customer who collects diaries of people of no importance at all. The entries say, ‘It was 63 degrees and raining this morning.’ Once the big boys amass libraries of weather patterns, everyone will want these works.”

C.E.O. libraries typically lack a Dewey Decimal or even org-chart order. “My books are organized by topic and interest but in a manner that would make a librarian weep,” Mr. Moritz said. Is there something “Da Vinci Code”-like about mixing books up in an otherwise ordered life?

Could it be possible to read Phil Knight’s books in the order in which Mr. Knight read them — like following a recipe — and gain the mojo to see a future global entertainment company in something as modest as a sneaker? The great gourmand of libraries, the writer Jorge Luis Borges, analyzed the quest for knowledge that causes people to accumulate books: “There must exist a book which is the formula and perfect compendium of all the rest.”

Personal libraries have always been a biopsy of power. The empire-loving Elizabeth I surrounded herself with the Roman historians, many of whom she translated, and kept one book under lock and key in her bedroom, in a French translation she alone of her court could read: Machiavelli’s treatise on how to overthrow republics, “The Prince.” Churchill retreated to his library to heal his wounds after being voted out of power in 1945 — and after reading for six years came back to power.

Over the years, the philanthropist and junk-bond king Michael R. Milken has collected biographies, plays, novels and papers on Galileo, the renegade who was jailed in his time but redeemed by history.

It took Dee Hock, father of the credit card and founder of Visa, a thousand books to find The One. Mr. Hock walked away from business life in 1984 and looked back only from his library’s walls. He built a dream 2,000-square-foot wing for his books in a pink stucco mansion atop a hill in Pescadero, Calif. He sat among the great philosophers and the novelists of Western life like Steinbeck and Stegner and dreamed up a word for what Visa is: “chaordic” — complex systems that blend order and chaos.

In his library, Mr. Hock found the book that contained the thoughts of all of them. Visitors can see opened on his library table for daily consulting, Omar Khayyam’s “Rubáiyát,” the Persian poem that warns of the dangers of greatness and the instability of fortune.

Poetry speaks to many C.E.O.’s. “I used to tell my senior staff to get me poets as managers,” says Sidney Harman, founder of Harman Industries, a $3 billion producer of sound systems for luxury cars, theaters and airports. Mr. Harman maintains a library in each of his three homes, in Washington, Los Angeles and Aspen, Colo. “Poets are our original systems thinkers,” he said. “They look at our most complex environments and they reduce the complexity to something they begin to understand.”

He never could find a poet who was willing to be a manager. So Mr. Harman became his own de facto poet, quoting from his volumes of Shakespeare, Tennyson, and the poetry he found in Arthur Miller’s “Death of a Salesman” and Camus’s “Stranger” to help him define the dignity of working life — a poetry he made real in his worker-friendly factories.

Mr. Harman reads books the way writers write books, methodically over time. For two years Mr. Harman would take down from the shelf “The City of God” by E. L. Doctorow read the novel slowly, return it to the shelves, and then take it down again for his next trip. “Almost everything I have read has been useful to me — science, poetry, politics, novels. I have a lifelong interest in epistemology and learning. My books have helped me develop a way of thinking critically in business and in golf — a fabulous metaphor for the most interesting stuff in life. My library is full of things I might go back to.”

It was the empty library room and its floor-to-ceiling ladder that made Shelly Lazarus, the chairwoman and chief executive of Ogilvy & Mather, fall in love with her house in the Berkshires, which was built in 1740. “When my husband and I moved in, we said, ‘We’re never going to fill this room,’ and just last week I realized we needed to build an addition to the library. Once I’ve read a book I keep it. It becomes a part of me.

“As head of a global company, everything attracts me as a reader, books about different cultures, countries, problems. I read for pleasure and to find other perspectives on how to think or solve a problem, like Jerome Groopman’s ‘How Doctors Think’; John Cornwall’s autobiography, ‘Seminary Boy’; ‘The Wife,’ a novel by Meg Wolitzer; and before that, ‘Team of Rivals.’

“David Ogilvy said advertising is a great field, anything prepares you for it,” she said. “That gives me license to read everything.”

Harriet Rubin is the author of “Dante in Love” and, most recently, “The Mona Lisa Stratagem: The Art of Women, Age and Power.”

Economist: Dispelling one's own ignorance

             

     
The craft of journalism

Dispelling one's own ignorance

Jul 19th 2007
From The Economist print edition

Travels with Herodotus By Ryszard Kapuscinski Knopf; 275 pages; $25. Allen Lane; £20 Buy it at Amazon.com Amazon.co.uk

WHEN Ryszard Kapuscinski, a Polish writer and journalist who died last January, set off on his career in the early 1950s, he felt like a foreign particle released into a wholly unfamiliar world. Fortunately, thanks to the timely gift of a book, he found a companion who helped to sustain him, personally and professionally, throughout his life. This unusually companionable companion, who died 2,500 years before Kapuscinski himself was born, was a Greek historian, Herodotus, author of “Histories”, a momentous account of a first great clash of civilisations: that between the despotic Asia of Persia and the democratic Europe of Greece.

AFP

A Polish master craftsman

Most of Kapuscinski's writings were tightly focused: his best-known work, “The Emperor”, is an account of the dying days of Haile Selassie's regime in Ethiopia. “Travels with Herodotus” is, by contrast, much more wayward, more serendipitous. It begins in the 1950s, but then starts flitting about as Kapuscinksi himself flitted from continent to continent, learning the journalistic trade of which he finally proved to be such a master.

How did the first historian of ancient Greece help a journalist from post-war Poland to get a handle on the slippery world? In many ways, it turns out. Herodotus taught Kapuscinski certain human and reporting skills which no amount of technology could have offered. Among these were tenacity, humility and the simple art of having first asked one source a question, to ask it again of another and compare the answers. It sounds almost disarmingly simple: to wander, to talk, to look, to listen. Herodotus also taught Kapuscinksi the value of self-doubt and—the two go hand-in-hand—rabid, insatiable curiosity.

The life of a journalist such as Kapuscinski consists of untold fruitful deflections. One month he is in India. Then, at the drop of a hat, China is assigned as his patch. He is equally ignorant in both places. But any good journalist, like Herodotus himself, is driven on by an awareness of his own shocking ignorance. And it is that overwhelming need to dispel those clouds of ignorance, to find meaning and pattern amid the world's ceaseless tumult, that drives the serious reporter on.

Herodotus not only travelled to the outermost limits of the known world. He also wanted to explain to other people, without windy obfuscation, what he had seen himself and found out from others. Like Kapuscinski, he discovered that the world was odd and surprising. And, having come upon those thousands of instances of wonderment, he wrote them down because he had a burning need to preserve what he had found. Why? Because human memory is so fragile. Everything gets lost, so easily. He also discovered that there is no such thing as the past. There are, at best, infinite renderings of the past.

Travels with Herodotus.
By Ryszard Kapuscinski.
Knopf; 275 pages; $25.
Allen Lane; £20

                                                

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

Economist: Cabaret in New York - A circus for grown-ups

             

     
Cabaret in New York

A circus for grown-ups

Jul 19th 2007
From The Economist print edition

Spiegelworld is back on the East River

La Vie

Sex in the air

PIER 17 in downtown Manhattan is not the most likely destination for theatre-goers. But here on the East River, among the wailing seagulls, frying fish and tourists, is an enchanting offer of entertainment. Spiegelworld is back in town for its second summer, with two spicy cabaret shows of dance, music, acrobatics and burlesque. Called “Absinthe” and “La Vie”, the shows are staged in the anachronistic opulence of a spiegeltent (Flemish for “tent of mirrors”).

Nobody seems to know how many of these European pavilions are left but most people agree that there are fewer than 20. Built by hand without nails, spiegeltents are beautiful assemblies of teak, velvet, stained glass and bevelled mirrors, created originally in Belgium in the early 20th century as mobile dance halls.

Only two families in Belgium and the Netherlands still know how to make them, producing one every five or ten years or so, says Vallejo Gantner, one of the show's producers and a long-time spiegeltent aficionado. “But you know it when you walk into an old one. They have a special boutique quality.”

This one, which dates from the 1920s and has a painted art-nouveau façade, lends continental glamour to the pier. It holds about 350 people on wooden chairs and banquettes around a modest, circular stage. And it is this intimacy, this proximity to the performers, that gives these shows their special feel. Erotic contortionists, balletic hand-balancers and bawdy jugglers emanate a sweaty, tangible humanity. Many of them, Mr Gantner explains, have left larger circus troupes, such as Cirque du Soleil, in order to make eye-contact with their audience. The simplicity of the staging gives their performances a gritty authenticity.

Once in a while, a family on a children's outing is fooled by Spiegelworld's festive red-and-blue tent spires. Make no mistake: the shows are for adults. “La Vie”, created by Les 7 Doigts de la Main, a Montreal-based troupe, laces an array of artfully sexy circus acts with the premise that everyone is dead and in purgatory, travelling on “a flight to hell that never quite gets there”. Wearing what looks like a straitjacket, a contortionist moves in a highly unsettling way to a recording of “Crazy”, crooned by Patsy Cline. The show closes with a steamy pas de deux between the devilish master of ceremonies and the evening's lip-curling seductress.

“Absinthe” is a more explicit grab-bag of stripping, cross-dressing and intrigue, without a unifying theme. The show's strongest moments come from the acrobats, all of whom carry a powerful sexual charge. Two women sway with suggestive grace on the trapeze. An aerialist in black trousers, his sculpted chest glistening, pulls and twists himself up two hanging straps to the lusty music of “Jealous Guy”, sung by a transvestite diva.

Sexy but not tawdry. Despite colourful language and a brief moment of unnecessary male nudity in “La Vie”, the setting is too elegant and the talent too astonishing for that. It's a bit of risqué fun that has been warmly received by New Yorkers, many of whom have grown tired of the wholesome, tourist-friendly fare of Broadway. Last summer “Absinthe” ran for two months to sell-out crowds; this year's two-show programme is for three months until the end of September.

                                                

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

Economist: Human Evolution - The Skull Man

             

     
Human evolution

The skull man

Jul 19th 2007
From The Economist print edition

Skulls join genes in suggesting an African origin for modern man

IN THEORY, the story that bones tell about the origins of the human race and the story that genes tell should be the same. In practice, they often start off different. Forty years ago, for example, palaeontologists thought that hominids, the group of primates that includes modern humans, had been distinct from other apes for some 25m years. Molecular biologists, however, reckoned 5m years a better estimate. With the discovery of more fossils, that has become the accepted number.

Another conflict between palaeontologists and molecular biologists seems to have been similarly resolved. Since 1987 molecular biologists have believed on the basis of DNA evidence that modern humans—Homo sapiens—originated in Africa and then spread around the world. Many palaeoanthropologists, though, disagreed. They claimed their skulls showed that modern humans had evolved all over the world from local populations of an earlier species called Homo erectus.

Well, they didn't. In this week's Nature, Andrea Manica of the University of Cambridge and his colleagues show that the skull data and the genetic data actually agree with each other—and that, once again, the molecular biologists were right.

The reason it has taken so long to come to this conclusion is that although genetic data are easy to obtain and interpret, cranial measurement is a laborious art. The breakthrough was the inclusion in the team of Tsunehiko Hanihara, of Saga Medical School in Japan, who has spent much of his life measuring skulls in various museum collections around the world. That means his data are preciously consistent (he always takes the same 37 measurements). But he had never before published them all as a single body of work.

Altogether, Dr Hanihara has measured 4,666 male skulls and 1,579 female ones, drawn from 105 groups of people from all six inhabited continents. Dr Manica's task was to show that these varied in the same way as human genetic data do.

One of the main lines of evidence for the “Out of Africa” hypothesis, as it is usually known, is that the most genetically varied human populations are in that continent—particularly in the south and east of it. The farther you go from Africa, the less genetic variety there is, because in a rapidly dispersing population genetic variety is lost faster by random failures to breed than it is replenished by evolution.

If the “Out of Africa” hypothesis is right, that decreasing variability should be reflected in skull shape—since this is ultimately under genetic control. As far as skulls are concerned, there is one confounding variable: climate. Things such as nostril size vary with temperature and humidity in ways that suggest evolution is at work. Since Dr Manica was looking for effects other than those produced by natural selection, those things had to be eliminated. Which he did.

Using what was left, he estimated the amount of diversity in groups of skulls from different parts of the world using a statistical technique called multiple-regression analysis, and compared the resulting map with a similar map of genetic diversity. The two matched perfectly. There was no room for the influence of local populations of Homo erectus.

That, Dr Manica hopes, should be enough to bury the multiregionalist hypothesis, as the bone-based alternative to “Out of Africa” is known, once and for all. What it does not help answer is the question of whether modern humans left their African homeland once or many times. Some researchers suggest the world was peopled in two waves. The first took humans to Australia about 50,000-60,000 years ago, when rambling the length of Indonesia without getting your feet wet was possible. The second wave took them to Tierra del Fuego, the farthest scrap of land that can be walked to from Africa (at least during ice ages, when the Bering Strait can be traversed). Others prefer just the one exodus. As is often the way, an external threat is a uniting influence. But now the multiregionalists have been seen off, the “Out of Africa” winners can join battle among themselves.

                                                

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

Economist: Talent Management

scorecard
boomerang - alumni
females
overseas visit
1 min review after meetings
skills score (competency framework?)
leaving a legacy
"flexi-time"

==

             

     
Talent management

Accounting for good people

Jul 19th 2007 | LONDON AND NEW YORK
From The Economist print edition

Surprising as it might seem, the Big Four accountancy firms have lots to teach other companies about managing talented people

Bridgeman Art Library

BEING interesting can be overrated. Accountants became suddenly intriguing in 2002 with the spectacular collapse of Arthur Andersen, because of its involvement in the scandals surrounding the fall of Enron. This added unwanted colour to a grey profession. Since then the surviving titans of accountancy—Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC), also known as the Big Four—have mostly retreated back into the shadows of public awareness. But interesting they remain, above all for the way they manage their people.

It is not just that they collectively employ some 500,000 people around the world. Many companies are as big as they are. Unlike most, however, the Big Four really mean it when they say that people are their biggest assets. Their product is their employees' knowledge and their distribution channels are the relationships between their staff and clients. More than most they must worry about how to attract and retain the brightest workers.

Time is regularly set aside at the highest levels to chew over how best to do this. Detailed goals are set: Deloitte's 2010 business plan includes targets for staff turnover, the scores it seeks in its annual staff survey and the proportion of female partners it would like to have. Partners are increasingly measured and rewarded as managers of people, not just for the amount of money they bring in. People-related items account for one-third of the scorecard used to evaluate partners at PwC. KPMG's British firm has introduced time codes so that employees can account for how long they spend dealing with staff matters. The idea is that those who devote lots of time to people-related matters are not disadvantaged as a result in pay rises and promotion.

The Big Four are by no means perfect. The sheer numbers they employ can still make them feel like sausage factories. Small firms are quick to take advantage of that when recruiting. Nevertheless, the big firms' evolving efforts to attract the best candidates and to encourage and keep the brightest people provide useful lessons for other companies.

The most intractable problem is that there are never enough skilled or promising people to go around. Just as competition for the best of the bunch is growing, the pool of available talent is changing. In America baby-boomers are flooding into retirement; in Europe the market is greying; and in India and China the large number of graduates masks low numbers of truly high-quality candidates.

Staff demands

There are added problems for accountancy firms. Job cuts earlier in the decade created a shortfall of people now. Regulatory changes, such as America's Sarbanes-Oxley Act, have boosted demand from clients not just for accountants' services but also for their staff. To add to their difficulties the Big Four are now aggressively re-entering the field of advisory services, necessitating a new burst of hiring. Ernst & Young is not unusual: it hired some 25,000 people in 2006, but expects to hire 30,000 this year and 35,000 in 2008.

Much of this recruitment is aimed at hard-to-find experienced professionals, especially important in the advisory businesses where corporate knowledge is highly valued. As a result, an old taboo is being broken and more outsiders brought straight in as partners. Robust selection procedures are used to ensure that they fit in. Programmes that help keep the firm in touch with former employees are also being strengthened so that people who leave can more easily find their way back (these “boomerangs” account for up to a quarter of those hired by the Big Four in America).

Former employees can also act as useful recruiting agents and help to drum up new business. For these alumni programmes to work “a massive cultural switch” is needed, says Keith Dugdale, who looks after global recruitment for KPMG. Few employers are used to helping people leave on good terms. But in an era of job-hopping and a scarcity of skills, loyalty increasingly means having a sense of emotional allegiance to an employer, whether or not that person is still physically on the payroll.

A similar change in attitude is needed to manage the careers of female employees. Each of the Big Four wants to promote more women, who account for about half of their recruits but around a quarter, at best, of their partners. Many women drop off the career ladder at some point (usually to have children or to care for an elderly relative) and find it difficult to get back on again. Options such as career breaks and part-time working are part of the accountants' response. “The Big Four are ahead of most in managing talented women,” says Sylvia Hewlett, author of “Off-Ramps and On-Ramps”, a new book on the subject (see article).

Across borders

Gaps in one country can be plugged with people from another. The Big Four have big plans in Asia, especially China. Deloitte aims to have 20,000 people in greater China by 2015, up from some 8,500 now. But like other firms it is finding that experienced people are thinner on the ground than promising but untested ones. One answer is to use member firms outside China to find experienced Chinese émigrés who want to return home, although they do not always get on well with local employees. Similar techniques are used to handle temporary gluts of work. Canadian accountants cross the border in droves during the American audit season to reinforce their American colleagues' efforts.

Mobility is seen as a useful way to retain and help employees develop. International assignments can be critical in attracting new graduates. According to Pierre Hurstel, Ernst & Young's global managing partner for people, new entrants want to work abroad: that's the biggest change in recruits in the past five years, he says. Recruiters at PwC are authorised to promise the best candidates on campus language training and an overseas visit at the end of their first year. International assignments can be pledged after two to three years. High-minded young people also want to work for companies with a decent ethical reputation.

Retaining good people is the biggest challenge. Turnover rates at the Big Four have historically been high—roughly 15-20% leave each year, compared with as few as 5% in some other industries. The cost of this is “astronomical”, says Jim Wall, Deloitte's managing director of human resources. Mr Wall reckons that every percentage-point drop in annual turnover rates equates to a saving of $400m-500m.

Even so, the accountant's goals are more nuanced than simply increasing retention rates. None of the big accountancy firms wants churn rates to fall too far, if only to keep the performance bar high. Mr Wall thinks a 10-12% turnover rate would be about right; Richard Baird, PwC's people chief, reckons that 12-15% is comfortable. Rather, the Big Four want more of their most talented people to stay.

The biggest staff exodus comes after three years, once recruits have been certified as accountants. Many never intend to stay any longer, aiming instead to parlay their qualifications into a new job and a fatter pay cheque somewhere else. That presents the Big Four with a particular problem: how to identify future stars among the mass of raw recruits. The trouble is, most talent-development programmes start at a later stage in people's careers.

One strategy is simply to persuade people to stay longer, which provides more time for employers to spot and seduce the best performers. The Big Four can point to research conducted among leavers that many would like to return and that even more wish they had stayed longer. Leaving after six years rather than three, say, means that people tend to go into better jobs with higher pay—which can also help the effectiveness of the alumni network.

Driving talent-management practices deeper into the organisation is the bigger priority, says Tony Osude, of the Association of Chartered Certified Accountants. Talent-spotting has traditionally been left to a middle-management layer of audit supervisors until people get closer to being a partner (partly because employees tend to be invisible to many of their superiors, working as they do in small teams at the offices of the client).

The effect has been to underutilise one of the big organisational advantages that the Big Four have: a large pool of partners who can help coach less experienced staff. That is changing. Rather than seeing junior staff as expendable drones, the Big Four's talent bosses want partners to view them as future assets. As well as tying reward schemes to the better management of people, the behaviour of partners is being changed in smaller ways. Deloitte's British firm asks partners to spend a minute with their staff immediately after client meetings to provide feedback so that they fulfil more of a training role.

Scoring skills

Changing the way partners behave takes time and will not solve every problem. Audit work is not the world's most fascinating job and junior staff have limited influence over their assignments. But they can be given a clearer idea of how their career might shape up and greater control over it. Ernst & Young spent years asking partners to identify the skills needed for a gamut of roles, each of which carries a rating from one for beginner to five for a master. Using this, staff will soon be able to view not only a profile of their skills but also what capabilities they need to acquire in order to move up into more senior positions. Many of the training and development services are delivered electronically.

By giving people more control over their career development the big accounting firms are starting to recognise that an overly aggressive “up or out” approach is a risky strategy when skills and bright people are in short supply. “Not everyone will be a senior partner,” says Doug Jukes, KPMG's lead partner for people management. “But they can still be extremely valuable to the firm.” Deloitte is in the process of boosting the status and pay of principals, a grade between director and partner for senior people.

Even so, a partnership remains the goal of the ambitious. KPMG has a programme called Compass, which identifies 11 career milestones on the path to becoming a senior partner, each of which triggers development activities. PwC runs Genesis Park, a five-month residential course for a hand-picked group of would-be partners from around the world.

People are expected to keep learning and networking after they have been made a partner too. Mr Hurstel, at Ernst & Young, worries about how to keep long-serving partners happy and energised, especially after the Enron scandals have eroded their godlike status. “Great armies have the capacity to restore their wounded,” he says. One of the programmes he runs is called “leaving a legacy”. It is designed in part to help prepare partners for life outside the firm, perhaps as board directors, but also to help them pass on their expertise.

The scale of resources pumped into talent management by the Big Four may be beyond most employers, but many of their ideas could still be copied. Building programmes that keep the company in touch with former employees, offering more flexible career paths to women and making people management an explicit part of the incentive system for senior staff are all useful tools for employers of people who think for a living. A more intriguing question is whether the organisational structure of the big accounting firms also has lessons for other companies.

More room at the top

Being a partnership confers some advantages. It is not just that a large number of senior people are available to help train and encourage junior ones—what Deloitte's Mr Wall calls an apprentice model—but that more people can succeed. Whereas success at a typical company means climbing to one of a few top positions—and probably elbowing others aside in the process—partnerships provide a broader top to the pyramid. Between them, the Big Four firms had more than 30,000 partners in 2006.

Partnerships are also flexible: if someone is good enough, the number of partners can be expanded to accommodate them. They are also consensual in style, which is important when managing clever, self-regarding people. The principles of joint ownership help to encourage networking and co-operative behaviour. “It is easier to persuade people about the importance of talent management in a partnership,” says Mr Baird.

But partnerships also have their downsides. Decision-making and innovation can be a lot tougher when so many other people have to be consulted. And in big partnerships people cease to know each other personally. For the Big Four, these problems are reinforced by their unwieldy federations of individual member firms scattered around the world.

According to Lowell Bryan, a partner at McKinsey and author of “Mobilising Minds”, a new book on getting the most from people, the ideal corporate organisation would blend elements of the typical company, the armed forces and professional services firms. An expanded “partner-like” group of senior managers at the top of the company is one of the features that he thinks could usefully be borrowed from professional services.

Cynics may wonder if the Big Four's focus on talent is only cyclical. Will expansion in their fast-growing advisory businesses make them less concerned about nurturing people in lower-margin audit work? Would an economic downturn quickly send head-counts plunging again? The size of workforces at individual firms, and in the business lines within them, will continue to ebb and flow with demand. But the supply constraints faced by employers are more rigid. As the battle in the long-heralded “war for talent” is joined across industries and countries, it could be worth keeping an eye on how the Big Four are quietly leading the charge.

Women and work

Breaks and ladders

Jul 19th 2007
From The Economist print edition

Female employees need different career paths

THE Big Four look embarrassingly male at their most senior levels. Although around half of their intake is female, that proportion shrinks rapidly as people climb the career ladder. KPMG wants women to account for a quarter of partners by 2010; Deloitte is aiming for a figure of 31% for its female partners and directors by 2009, up from 26% now.

Corbis

One day, someone will invent something to do this at home

To get to even these relatively modest targets, the firms must grapple with what Sylvia Hewlett, of the Centre for Work-Life Policy in New York, calls women's “non-linear career paths”. According to her research, 37% of all professional women drop out of work at some point; even more will spend time working flexibly. Getting back into employment is not easy: only 40% manage to find full-time jobs. And those that do suffer a swingeing loss of earnings: a 38% fall for those who have been out of the office for three years or more compared with those who have stayed.

Smart employers are toying with ways to keep the door to “off-ramped” female staff ajar. The big accounting firms offer formal career breaks that allow staff to take unpaid leave from work. Booz Allen Hamilton, a consultancy, and Lehman Brothers, an investment bank, run programmes offering interesting project-based work to women who are not ready to take on full-time positions.

Flexible working can also improve retention, through options such as part-time work, compressing work into fewer days and seasonal schedules which can fit in with school holidays. Flexitime and home working are popular and help explain why more than 80% of the women on maternity leave at the Big Four return to work, which is a higher proportion than in other industries.

Child care is not the only issue such schemes address. More and more people look after elderly relatives—Ms Hewlett points to China, where women from the one-child generation will look after not just their parents but also their in-laws.

                                                

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

FT: Engineer graduate numbers questionable

Engineer graduate numbers questionable

By Clark O'Brien

Published: July 20 2007 03:00 | Last updated: July 20 2007 03:00

From Mr Clark O'Brien.

Sir, In the Monday Interview, "Cisco's chief places his next online bet" (July 16), John Chambers, Cisco's chief executive, states: "If the US is graduating 60,000 engineers a year, India's graduated 350,000 and China's graduated 600,000 and you're trying to get the top 10 per cent . . . I think that's unfortunate for both Europe and the US."

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The numbers of engineers graduated from China and India quoted in this statement are exaggerated and have been called into question by numerous independent studies, yet they continue to be quoted and given in testimony before the US Congress.

A newspaper investigation and a study by Duke University, "Framing the Engineering Outsourcing Debate", both in 2005, trace the origin of these numbers back to the Chinese ministry of education and the National Association of Software and Service Companies in India. The Duke report also concludes that these numbers included various two- and three-year degree programmes and "may very well include the equivalent of motor mechanics and industrial technicians".

The Duke report concluded that India graduated approximately 112,000 engineers a year that have an equivalent to a US bachelor's degree, fewer than the 137,000 engineering bachelor's degrees conferred by US universities. A report by the McKinsey Global Institute, also in 2005, concluded that only 10 per cent of Chinese engineers and 25 per cent of Indian engineers could compete in the global outsourcing arena.

Clark O'Brien,

8230 Aabyhoej, Denmark