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Ten interesting things we read this week
Some of the most interesting topics covered in this week's iteration are related to 'Success of 5-hour workday', 'King of Pyongyang', and 'India's crossword king'
Image: ShutterstockAt Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, including investment analysis, psychology, science, technology, philosophy, etc. We have been sharing our favourite reads with clients under our weekly ‘Ten Interesting Things’ product. Some of the most interesting topics covered in this week’s iteration are related to ‘success of 5-hour workday’, ‘King of Pyongyang’, and ‘India’s crossword king’.
Here are the ten most interesting pieces that we read this week, ended June 1, 2018.
1) The case for a five-hour working day [Source: Financial Times]
The author, Pilita Clark shares a story in this piece about the boss of a financial advice firm who started working part-time after his wife — a new mother — began treatment for cancer. Jonathan Elliot found he could get as much work done in five hours as he had in his previous eight, so he had a thought: why not see if everyone else in the company could do the same? At the start of last year, the 30-odd staff at his firm, Collins SBA, began a trial of a five-hour day, with no cut in their pay. They had to start between 8am and 9am and get their work done by 1pm or 2pm. After that, most were free to hit the golf course, play with their children or whatever else they felt like. The reception desk stayed open all day and urgent client needs were met. Despite fears the move could blow up the business, it has worked so well to date that there are no plans to end it, says Claudia Parsons, the firm’s operations director.
As a result of this change sick days have plunged. Talented recruits have been hired. Some advisers have done record levels of new business. Clients did not mind waiting a few hours to see an adviser. The firm’s bottom line seems unaffected.
While this is a small firm, Pilita says there are many reasons to consider the idea seriously. First, it offers an end to some of the dreariest bits of office life, like the long or pointless meeting. At Collins SBA, there is now a 10-minute weekly office-wide huddle, where everyone stands, and smaller, brief get-togethers if needed. Another plus of the five-hour day is that it recognises a hidden truth of working life: some people get more done in three hours than others do in 10, yet are never rewarded for it. A five-hour day should also end another office idiocy: hanging around until 5pm when you have done all your work, or because the boss is still there. If people at Collins SBA are still at their desks at 5pm, Ms. Parsons says it is “no longer considered admirable”.
However, the end of leisurely lunches and the need to work efficiently did not suit everyone at Collins SBA. A couple of people left. Others worried about the dearth of office chat and collaboration. The firm now has afternoon staff outings every two months. Ms. Clark says it’s natural that a five-hour day would not work everywhere. Any firm billing by the hour would find it appalling. It would be hopeless for most people in journalism too. The world makes news all day and journalists have to be ready to report it. Even early proponents of the five-hour day have made adjustments.
Mr. Elliot was influenced by a book by a US entrepreneur, Stephan Aarstol, who introduced five-hour days at his San Diego paddle board company, Tower, in 2015. He offered his employees the same pay and a 5% profit share but warned that anyone who couldn’t get with the five-hour programme would have to leave, and several did. “You’re putting people under the spotlight,” he tells me. “It became very obvious which people were getting nothing done.” He has now decided to limit the five-hour day to summer months and go back to eight hours the rest of the year. “Our experiment is still going,” he says.
2) The spectacular power of Big Lens [Source: The Guardian]
Almost everyone wears glasses at some point in their lives. In developed countries, the rule of thumb is that around 70% of adults need corrective lenses to see well. In Britain, that translates to some 35 million people. But it’s hardly a topic of national conversation. To the casual observer, the optical market also presents a busy and confusing sight. In Britain, thousands of independent opticians rub alongside a few big retail chains such as Specsavers, Vision Express and Boots. The wall displays in even a small, local optician hold several hundred frames, metal, acetate and rimless, while posters advertise a range of lenses with sciencey-sounding properties – “freeform”, “photo-fusion”, “reflex vision” – and names so bland they are hard to remember even when you are looking straight at them.
But what excites the author is how the world’s two biggest companies in their field merged together to build a massive company. The $100bn (£74bn) eyewear industry is dominated by Luxottica and Essilor. The lenses in most of the glasses are most likely made by Essilor, a French multinational that controls almost half of the world’s prescription lens business and has acquired more than 250 other companies in the past 20 years. Also, there is a good chance that your frames are made by Luxottica, an Italian company with an unparalleled combination of factories, designer labels and retail outlets. While Essilor currently has around 45% of the prescription lenses market, Luxottica has 25% of the frames. If Luxottica spent the last quarter of a century buying the most conspicuous elements of the optical business (the frames, the brands and the high-street chains) then Essilor has busied itself in the invisible parts, acquiring lens manufacturers, instrument makers, prescription labs (where glasses are put together) and the science of sight itself.
Luxottica pioneered the use of luxury brands in the optical business, and one of the many powerful functions of names such as Ray-Ban or Vogue or Prada or high-street outlets such as LensCrafters, the largest optical retailer in the US, or John Lewis Opticians in the UK or Sunglass Hut is to make the marketplace feel more varied than it actually is. Most of the above brands are owned by Luxottica. Leonardo Del Vecchio, 82, founder of Luxottica feared the legacy of Luxottica after his death and that’s what made these two companies (Luxottica and Essilor) come together. “He wants to do this merger,” a former colleague said, “thinking he will leave behind this great company that will last for 100 years.”
On 1 March, regulators in the EU and the US gave permission for the world’s largest optical companies to form a single corporation, which will be known as EssilorLuxottica. The looming power of EssilorLuxottica is the subject of morbid obsession within the eyewear world. Everyone knows the new company is poised to have a profound impact on the way that we are going to see. “Forgive me,” said one long-time entrepreneur in the sector. “But it is nothing short of control of the industry.” One investor described the new corporation as a “category killer”. Over the coming decades, EssilorLuxottica will have the power to decide how billions of people will see, and what they can expect to pay for it.
3) Mifid reforms spur companies seeking investors to bypass brokers [Source: Financial Times]
Companies are bypassing their banks and brokers to arrange meetings and calls directly with potential investors, in response to new European rules that aim to make markets more transparent and reduce conflicts of interest. Mifid II, the sprawling EU markets regulation that came into effect this year, requires banks and brokers to charge fund managers separately for analyst research as well as for “corporate access”, such as face-to-face meetings with company management. But some fund managers are reluctant to pay for access and many are also cautious of inadvertently breaking the new rules. For this reason, several companies are exploring ways to communicate with investors without banks or brokers as middlemen — using their internal investor relations teams instead to arrange meetings and organise roadshows.
A survey of about 300 financial institutions by the UK’s Investor Relations Society and QuantiFire, an investor relations service provider, found that more than half planned to use brokers less for corporate access and said they would be more reliant on companies instead. The change is expected to harm the profitability of small City of London brokers in particular, which are more sensitive to any loss of business than deep-pocketed and more diversified banks. But bank-organised investor conferences have also been affected. Some banks are quoting large fees for non-clients who want to attend these conferences — sometimes $500 a person or more. Many asset managers are unwilling to pay to attend conferences and there are reports of a few being turned away at the door. Meanwhile, some brokers have had to cancel events after struggling to attract enough investors, while others can no longer justify hosting more glitzy affairs.
In response, companies have been devising workarounds with investors. In some cases, asset managers who have not attended conferences in an official capacity have turned up to meet company representatives without brokers. There have even been examples of companies adding days to investor roadshows in order to meet local investors directly. Many predict that this disintermediation of banks and brokers will be a boon for the investor relations profession. Among the other big winners from the market shake-up have been providers of technology that bring together investors and companies. Adrian Rusling, partner at Phoenix Investor Relations, based in Brussels, said there had been a 50% rise in the number of daily interactions between investors and companies on his online service since the introduction of Mifid II. These sorts of services are considered important for smaller companies that may struggle to spread information about themselves more widely.
Some large European stock exchanges — such as Euronext — have said they are considering partnerships with third parties to help smaller companies build relationships with investors.
4) The King of Pyongyang [Source: BBC]
In this long read, Rupert Wingfield-Hayes throws light on the life of the North Korean leader, Kim Jong-un. When Kim’s father Kim Jong–il died suddenly in December 2011, Kim had barely begun his apprenticeship to become North Korea’s third Supreme Leader. Many experts had predicted the collapse of one-man-rule, which Kim Jong-un’s grandfather, Kim Il-sung, created in 1950s. But they were soon to be proved wrong. Within months, Chief of Staff Ri Yong-ho and Defence Minister Kim Yong-chun had both been dismissed. Ri’s whereabouts remain a mystery to this day. Then in December 2013 Kim Jong-un made his most dramatic move. His own uncle, Chang Song-thaek, was hauled from a party meeting, accused of treason and executed, with some unconfirmed reports even suggesting an anti-aircraft gun had been used. Kim has removed anybody who stood in his way, replacing them with a younger cadre loyal to him. They are led by his own sister Kim Yo-jong, who in 2017 was appointed to the Politburo at the age of 30.
A look back into the history reveals much about the man. Going back to 1992, at a villa in Pyongyang a very special birthday party was held for an eight-year-old boy. Among the presents one stood out. It was a general’s uniform. Not a toy, but the real thing - a miniature but otherwise totally authentic uniform of a general of the Korean People’s Army. Other, much older generals arrived at the party and bowed before the eight-year-old boy. The little boy’s name was Kim Jong-un. According to Ko Yong-suk, Kim’s aunt, it was impossible for him to grow up as a normal person when the people around him were treating him like that. A few years later Ko Yong-suk was assigned to accompany Kim Jong-un when his father sent him to private school in Switzerland. She described the teenage Kim as hot-tempered and arrogant.
During the 1990s, a Japanese sushi chef who goes by the alias of Kenji Fujimoto became an unlikely member of the Kims’ inner circle. He made Japanese food for Kim Jong-il, and claims he was the young Kim Jong-un’s “playmate”. In 2001 Fujimoto returned to Japan and published his inside story. In it he described his first encounter with Kim Jong-un, and his older brother Kim Jong-chol. “The first time I met the two young princes, they were both wearing military uniforms. They shook hands with each of the staff. But when it came to shaking my hand, Prince Kim Jong-un gave me an icy glare. It was like he wanted to say, ‘We hate Japanese like you’. I will never forget his sharp stare. He was seven years old.” In a second book in 2003 Fujimoto wrote, “Kim Jong-chol is regarded as the most likely successor. But I doubt that very much. Kim Jong-il used to say, ‘Jong-chol is no good, he is like a girl’. His favourite is his youngest son, the second prince. Jong-un is very much like his father. He is even built like his father. But his existence has not been revealed to the public.”
Talking about Kim’s dynasty, everyone is a potential enemy. The North Korean military, the General Staff Department, the Ministry of the People’s Armed Forces as well as the entire North Korean people, they are all potential enemies. When Choi Min-jun, a North Korean defector now living in South Korea was selected to join the most elite unit in the North Korean military, the Supreme Guard Command, he was trained to trust no-one, not even his own parents. As the Kim family’s paranoia grew so did the size of this personal security force. When the Kim family saw the collapse of the Eastern bloc and the fall of the Soviet Union they were shocked. They drastically increased the size of the Supreme Guard Command. Now it numbers almost 120,000 soldiers.
That’s not all, it’s said that Kim Jong-nam, Kim Jong-un’s elder half-brother, had been poisoned with a powerful nerve agent - VX. Inhaling a drop the size of a grain of sand is enough to kill. And all the evidence seemed to point towards his younger half-brother in Pyongyang. Journalist Bradley K Martin, who’s written the definitive biography of Kim dynasty, believes Kim Jong-un had his own brother killed. He has his own theory why. “It fits with the killing of [his uncle] Chang Song-thaek,” he says. “Chang was charged with planning a coup d’état. We [the Western media] ignored that. Then Kim Jong-un went after the brother. We have these reports that Chang went to China and said, ‘Let’s get rid of Kim Jong-un and put Kim Jong-nam in’. Kim thinks: ‘My uncle and my older brother are plotting against me and are in cahoots with the Chinese.’ It makes a certain amount of sense.” While that is just a theory, but his further conclusion seems irrefutable - there are now no further threats to his rule. His internal challengers are gone. And Kim Jong-un rules supreme.
5) Winner-takes-all trend gains traction in US asset management [Source: Financial Times]
The cut-throat price war among US asset managers intensified last year as mutual funds with the lowest fees won by far the most investor inflows. Fees are becoming crucial in determining success or failure for investment managers, particularly in the US where actively managed funds that aim to pick winning stocks have lost market share to low-cost trackers that follow a broad benchmark. Forty-three per cent of US equity funds cut their charges last year, with active managers that invest in domestic stocks facing bruising competition. Only the cheapest active US domestic equity funds — those priced in the lowest 5 per cent of their peer group with fees of less than 56 basis points — could attract positive net inflows last year totaling $3bn. The other 95% of funds, which charge fees of 56bp or more, suffered combined outflows of $275bn.
Downward pressure on fees was intensifying because of increased competition among asset managers for the business of large institutional clients and the growing bargaining power of large distributors selling funds to retail investors. Vanguard, the world’s second-largest asset manager and historically the most aggressive competitor on fees, has gathered record breaking inflows for six consecutive years. BlackRock, the world’s largest asset manager, enjoyed its best year, pulling in $367bn in net cash. BlackRock and Vanguard have played a major role in escalating a price war that has drawn in other passive fund managers, including State Street and Charles Schwab.
The cheapest quartile of domestic US equity trackers, with fees of less than 20bp, had inflows of $208bn in 2017. The remainder could only attract $20bn. A similar but less extreme split in flows was registered in passively managed international equity funds, and also bond and hybrid trackers.
6) How to topple a dictator: the rebel plot that freed Gambia [Source: The Guardian]
This article from Philip Róin and Mikkel Danielsen discusses how a few rebels brought down Yahya Jammeh’s dictatorship regime and freed Gambia. When Jammeh first took power more than two decades earlier, he didn’t represent any party or ideology. Then only 29, he had been in charge of the bodyguards protecting the country’s first and only president, Dawda Jawara, who had ruled since the Gambia gained its independence from the United Kingdom. Samba Faal, who was then the vice-mayor of the capital of Banjul, still remembers the hot summer day in July 1994 when he watched a company of armed soldiers, led by Jammeh, marching toward the presidential palace. Taking advantage of the president’s absence on a trip abroad, Jammeh and his comrades seized power in a bloodless coup. Jammeh’s timing was good. Jawara had held the presidency since 1970, and Gambians had grown weary of his rule. Corruption was endemic, and the president’s friends had grown rich. “Jammeh was a simple opportunist with a plan,” Faal said. Jammeh portrayed himself as a poor man from rural Gambia, a man of the people.
Shortly after he took control, Jammeh ordered the executions of about a dozen high-ranking soldiers whom he considered threats. He was aware that the first period of a dictator’s rule is the most uncertain. According to The Dictator’s Handbook, by political scientists Alastair Smith and Bruce Bueno de Mesquita of New York University, a dictator has a 50-50 chance of surviving the first six months in power. Personality-wise Jammeh was quite an eccentric: 1) He believed he had created a home-made recipe that could cure HIV; 2) He liked to drive at speed across the country, throwing biscuits and money to the crowds from the sunroof of his Hummer limousine – a stunt that killed and injured several of his citizens; 3) He believed he was immortal and would rule Gambia for billion years. During his 22-year rule, Jammeh treated this impoverished, elongated west African country as his personal fiefdom. Jammeh amassed enormous wealth, and stashed it outside the country. The Gambian ministry of justice is still working on getting hold of deeds to 130 properties worldwide, 88 bank accounts and 14 companies that had close dealings with him.
Many people were against him, including the soldiers who guarded him. And his soldiers were the ones who betrayed him; on Saturday 13 August 2016, six of Jammeh’s bodyguards drove towards the headquarters of Jammeh’s ruling party, the Alliance for Patriotic Reorientation and Construction (APRC). They entered the headquarters, piled chairs and computers in the middle of the floor, with folders, binders and papers. On top of the pile, they placed what they had come for: three cardboard boxes containing ID cards for citizens registered to vote. It was believed that Jammeh would pay foreign nationals to come and vote for him during elections. With the fake voter IDs burnt and turned into ashes, and elections being around the corner, Jammeh’s downfall was certain. It was one of several small steps that would culminate in the toppling of one of Africa’s strangest and most enduring dictators.
With just a month to go before the election, the opposition found their candidate: the UDP treasurer, Adama Barrow, an unassuming figure who had for a time worked as a security guard in London. On 1 December 2016, Election Day, a little more than half a million people, or 60% of registered voters, turned out. As the votes were counted, it dawned on Jammeh and the population that his plan to rule for a billion years might prove exaggerated. In Serekunda, cars with blaring horns were racing through the streets; yellow flags, Barrow’s colour, fluttered in the night sky. Jammeh’s attempt to hold on to power had failed. On 22 January, a 10-car motorcade rolled up at the airport in Banjul. It stopped at a red carpet and Jammeh, impeccably clad in white, stepped out and walked to the awaiting plane. A military band played as he waved to a few loyal supporters and assembled journalists. He kissed his Qur’an before he took off.
7) This boy from Mumbai became the world’s unlikeliest crossword king [Source: narrative.ly]
As a teenager, Mangesh Ghogre was obsessed with decoding puzzles filled with foreign references. Now he’s the only non-American to ever create them for The New York Times. He shared his journey in a two-hour crossword workshop at the United States Consulate General building in Mumbai, India. This investment banker, 38, originally took up the crossword while studying for the GMAT. Entering the Veermata Jijabai Technological Institute in 1997, he quickly realised the defining temper of the place. The college was awash with ambitious students preparing for the GRE and GMAT so they could study in the US. “Everyone is walking around with a Barron’s word list,” he says, referring to the famous study material. He used to solve the crossword, or at least try to solve, every day.
His early attempts were hopeless. In the first six months the best he could do was filling in the S’s, divining from a clue that there was a plural involved but failing to solve it fully. Then he slowly managed to fill in simple answers like capitals and currencies. Still, every puzzle was a haven of unheard-of things. Mastering a puzzle from another country is more than just learning the language; the knowledge banks from which the puzzle-makers draw is a vast and varied shared vocabulary, inherently recognizable to a North American audience, but incomprehensible to others. But instead of losing interest, he became increasingly determined to master it. With a sharpened pencil, he’d be at it even during class, often getting thrown out for not paying attention. It was a year and a half before he finished his first crossword unassisted. After joining work at a bank post-graduation, Ghogre continued solving puzzles, and began earnest efforts at constructing his own in 2009. The initial volley of rejections stung. Then, his first puzzle was published in The Los Angeles Times on March 9, 2010.
What does it take to construct an American crossword? It’s something Ghogre is uniquely positioned to do. He is the only person who was born and raised outside North America, and who has never lived there, to create a crossword puzzle for The New York Times. As Ghogre runs through his 53-slide presentation, he lays out the basic rules – you can’t use two-letter words and you can’t repeat words – then dives into the details, like how to create a theme. Ghogre has published crosswords 11 times in various U.S. publications, including The New York Times, which receives 75 to 100 submissions per week. Ghogre never even visited the U.S. until he was invited to be a judge at the annual crossword tournament in 2012. This year was his fifth time serving as a judge at the annual American Crossword Puzzle Tournament, which draws 600-plus seasoned solvers.
One of Ghogre’s greatest triumphs came when an Independence Day-themed crossword he co-created with Brendan Emmett Quigley, an American puzzler, was published in The New York Times on the Fourth of July last year. The pair met at the crossword tournament, where they were both judges, and Ghogre proposed collaboration. Trading grids and clues back and forth over Whatsapp, they finalised the puzzle and submitted it, then waited two years until it was published. “I would say he is very rare,” Will Shortz, the legendary crossword editor at The New York Times and director of the annual crossword tournament, wrote in an email. Shortz confirmed that, with the exception of American-born expats, and puzzlers who were born elsewhere but raised in the U.S. or Canada, no other non-North American has ever had a puzzle published in the Times.
In the future Ghogre hopes to do more to popularize puzzles in India. Last year a selection of his crosswords was displayed at the Kala Ghoda Arts Festival, one of the city’s major annual cultural events. He plans to design a special puzzle themed around Indo-U.S. relations, hopefully to coincide with a presidential visit, and he even has aspirations to cross over into fashion with a line of crossword-inspired apparel. Between work and family commitments, Ghogre now has less time to do the daily crossword, but he closely follows conversations about the latest puzzles, themes and solutions on online message boards. Newspapers may be struggling with print subscriptions and sales, but puzzle fanatics have found plenty of virtual spaces for debate, dissection and discussion.
8) How baby boomers broke America [Source: Time]
This article revolves around how in the past five decades, the core values that made America great have begun to bring America down. This article is adapted from the book, Tailspin by Steven Brill. Lately, most Americans, regardless of their political leanings, have been asking themselves some version of the same question: How did we get here? How did the world’s greatest democracy and economy become a land of crumbling roads, galloping income inequality, bitter polarization and dysfunctional government? The First Amendment became a tool for the wealthy to put a thumb on the scales of democracy. America’s rightly celebrated dedication to due process was used as an instrument to block government from enforcing job-safety rules, holding corporate criminals accountable and otherwise protecting the unprotected. Election reforms meant to enhance democracy wound-up undercutting democracy. Ingenious financial and legal engineering turned the US economy from an engine of long-term growth and shared prosperity into a casino with only a few big winners.
America, resultantly, was split into two classes: protected and unprotected. The protected overmatched, overran and paralysed the government. The unprotected were left even further behind. In 2017, household debt grew higher than the peak reached in 2008 before the crash, with student and automobile loans staking growing claims on family paychecks. Although the U.S. remains the world’s richest country, it has the third-highest poverty rate among the 35 nations in the Organisation for Economic Co-operation and Development (OECD), behind only Turkey and Israel. Nearly 1 in 5 American children lives in a household that the government classifies as “food insecure,” meaning they are without “access to enough food for active, healthy living.” Also, the recovery from the crash of 2008 – which saw banks and bankers bailed out while millions lost their homes, savings and jobs – was reserved almost exclusively for the wealthiest.
On one side are the protected few, the winners, who don’t need government for much and even have a stake in sabotaging the government’s responsibility to all of its citizens. For them, the new, broken America works fine, at least in the short term. On the other side are the unprotected many. They may be independent and hardworking, but they look to their government to preserve their way of life and maybe even improve it. The unprotected need the government to provide good public schools so that their children have a chance to advance. It’s the protected vs. the unprotected, the common good vs. maximizing and protecting the elite winners’ winnings.
As government was disabled from delivering on vital issues, the protected were able to protect themselves still more. But, it’s the frustrated, unprotected class who voted for President Trump in hope to turn around the condition of the country and make America great again. They believed Trump would take the coal industry back to the greatness it had enjoyed 80 years before. He would rebuild the cities, block immigrants with a great wall, provide health care for all and make the country’s infrastructure the envy of the world, while cutting everyone’s taxes. Forty-six percent of those who voted figured that things were so bad, they might as well let him try. The new achievers are doing what they do not because they are gluttons for frustration, but because they believe that America can be put back on the right course. They are laying the groundwork for the feeling of disgust to be channeled into a restoration.
9) A study of NASA scientists shows how to overcome barriers to open innovation [Source: HBR]
Open innovation processes promise to enhance creative output, yet we have heard little about successful launches of new technologies, products, or services arising from these approaches. Certainly, crowdsourcing platforms (among other open innovation methods) have yielded striking solutions to hard scientific and technological problems—prominent examples being the Netflix predictive recommendation algorithm and the approach to reducing the weight of GE jet engine brackets. But most R&D organizations are still struggling to reap the very real rewards of open innovation. The authors claim to have identified an important hidden factor for this failure and that it holds the key to a successful integration and execution of open innovation methods.
They conducted a three-year study at NASA’s Space Life Sciences Directorate to closely track the opportunities and challenges involved with open innovation in an incumbent R&D organization over time. NASA took a two-track approach to solving 14 strategic problems: The organization used both the traditional collaborative R&D model led by its own experts, and also open online innovation platforms led by crowds of non-domain experts. The second approach led to relatively speedy solutions to three of the challenges and was particularly successful in the challenge of predicting dangerous solar storms, where it produced a breakthrough within a mere three months. But bringing the open-source solutions to life proved more challenging. Some of the directorate’s scientists and engineers resisted the new approaches, citing process, budget, and procedural issues.
According to the authors, the most resistant scientists and engineers saw open source methods as a fundamental challenge to their professional identities. They defined themselves as “problem solvers,” but open innovation crowdsourcing platforms didn’t let them play that role; instead, they had to frame problems for someone else to solve. By contrast, there were other scientists and engineers who perceived the open methods as an opportunity to enhance their role and capabilities. As some engineers described it, this transition was a shift from thinking “the lab is my world” to “the world is my lab.” These identity dynamics are often hidden from managers and difficult for them to shape.
The authors remained at NASA to understand how managers can influence the way innovation professionals perceive their role and integrate open innovation methods. Their research showed that managers should encourage and reward solution seeking. In every successful R&D organization there are hero stories about problem solvers; these need to evolve to celebrate the innovators who find solutions in creative ways. These are the innovators who should get the spotlight and the resources. And rather than incentivizing only patents or publication, offer financial recognition to those who embrace the solution-seeking mindset. After all, innovation is not only about having an innovative technology or science; it is also about innovating the actual process of innovation.
10) Stockholm brewery launches beer brewed from treated sewage [Source: Moneycontrol]
A Stockholm-based brewery has launched new beer prepared using treated sewage water. The main purpose of the project is to highlight sustainable water management and raise awareness of the global water issues and the value of clean water. The beer branded as PU:REST is being marketed as Sweden’s first beer brewed with recycled water. The product is a result of collaboration between IVL Swedish Environmental Research Institute, New Carnegie Brewery and Carlsberg Sweden.
“In a world threatened by water shortage, we wanted to show that we already have technologies to recycle wastewater into drinking water that is as clean as normal tap water,” says Staffan Filipsson, project manager at IVL. The institute said that it has developed technologies which if used in right combination, wastewater can be recycled both cost-effectively and to such quality that it can be returned to groundwater or reused in agriculture and industry. However, the acceptance of the technologies in practical life is nascent and is still regarded by many countries as a solution that is some way off in the future.
“The difficulties in getting this relatively cost and energy-efficient method to be used for the production of drinking water is not technical but primarily emotional. The recycled water is as pure and safe as normal tap water, but most people are still sceptical about actual drinking purified wastewater,” says Filipsson. In order to change the conceived notions about recycled water, the institute contacted the New Carnegie Brewery in Hammarby Sjöstad, Stockholm and asked if they were interested in brewing a beer with recycled water. The result was PU:REST. The beer has been premiered on May 25 and will be available for order starting July.- Saurabh Mukherjea is CEO, and Prashant Mittal is Strategist, at Ambit Capital. Views expressed are personal
Here are the ten most interesting pieces that we read this week, ended June 1, 2018.
1) The case for a five-hour working day [Source: Financial Times]
The author, Pilita Clark shares a story in this piece about the boss of a financial advice firm who started working part-time after his wife — a new mother — began treatment for cancer. Jonathan Elliot found he could get as much work done in five hours as he had in his previous eight, so he had a thought: why not see if everyone else in the company could do the same? At the start of last year, the 30-odd staff at his firm, Collins SBA, began a trial of a five-hour day, with no cut in their pay. They had to start between 8am and 9am and get their work done by 1pm or 2pm. After that, most were free to hit the golf course, play with their children or whatever else they felt like. The reception desk stayed open all day and urgent client needs were met. Despite fears the move could blow up the business, it has worked so well to date that there are no plans to end it, says Claudia Parsons, the firm’s operations director.
As a result of this change sick days have plunged. Talented recruits have been hired. Some advisers have done record levels of new business. Clients did not mind waiting a few hours to see an adviser. The firm’s bottom line seems unaffected.
While this is a small firm, Pilita says there are many reasons to consider the idea seriously. First, it offers an end to some of the dreariest bits of office life, like the long or pointless meeting. At Collins SBA, there is now a 10-minute weekly office-wide huddle, where everyone stands, and smaller, brief get-togethers if needed. Another plus of the five-hour day is that it recognises a hidden truth of working life: some people get more done in three hours than others do in 10, yet are never rewarded for it. A five-hour day should also end another office idiocy: hanging around until 5pm when you have done all your work, or because the boss is still there. If people at Collins SBA are still at their desks at 5pm, Ms. Parsons says it is “no longer considered admirable”.
However, the end of leisurely lunches and the need to work efficiently did not suit everyone at Collins SBA. A couple of people left. Others worried about the dearth of office chat and collaboration. The firm now has afternoon staff outings every two months. Ms. Clark says it’s natural that a five-hour day would not work everywhere. Any firm billing by the hour would find it appalling. It would be hopeless for most people in journalism too. The world makes news all day and journalists have to be ready to report it. Even early proponents of the five-hour day have made adjustments.
Mr. Elliot was influenced by a book by a US entrepreneur, Stephan Aarstol, who introduced five-hour days at his San Diego paddle board company, Tower, in 2015. He offered his employees the same pay and a 5% profit share but warned that anyone who couldn’t get with the five-hour programme would have to leave, and several did. “You’re putting people under the spotlight,” he tells me. “It became very obvious which people were getting nothing done.” He has now decided to limit the five-hour day to summer months and go back to eight hours the rest of the year. “Our experiment is still going,” he says.
2) The spectacular power of Big Lens [Source: The Guardian]
Almost everyone wears glasses at some point in their lives. In developed countries, the rule of thumb is that around 70% of adults need corrective lenses to see well. In Britain, that translates to some 35 million people. But it’s hardly a topic of national conversation. To the casual observer, the optical market also presents a busy and confusing sight. In Britain, thousands of independent opticians rub alongside a few big retail chains such as Specsavers, Vision Express and Boots. The wall displays in even a small, local optician hold several hundred frames, metal, acetate and rimless, while posters advertise a range of lenses with sciencey-sounding properties – “freeform”, “photo-fusion”, “reflex vision” – and names so bland they are hard to remember even when you are looking straight at them.
But what excites the author is how the world’s two biggest companies in their field merged together to build a massive company. The $100bn (£74bn) eyewear industry is dominated by Luxottica and Essilor. The lenses in most of the glasses are most likely made by Essilor, a French multinational that controls almost half of the world’s prescription lens business and has acquired more than 250 other companies in the past 20 years. Also, there is a good chance that your frames are made by Luxottica, an Italian company with an unparalleled combination of factories, designer labels and retail outlets. While Essilor currently has around 45% of the prescription lenses market, Luxottica has 25% of the frames. If Luxottica spent the last quarter of a century buying the most conspicuous elements of the optical business (the frames, the brands and the high-street chains) then Essilor has busied itself in the invisible parts, acquiring lens manufacturers, instrument makers, prescription labs (where glasses are put together) and the science of sight itself.
Luxottica pioneered the use of luxury brands in the optical business, and one of the many powerful functions of names such as Ray-Ban or Vogue or Prada or high-street outlets such as LensCrafters, the largest optical retailer in the US, or John Lewis Opticians in the UK or Sunglass Hut is to make the marketplace feel more varied than it actually is. Most of the above brands are owned by Luxottica. Leonardo Del Vecchio, 82, founder of Luxottica feared the legacy of Luxottica after his death and that’s what made these two companies (Luxottica and Essilor) come together. “He wants to do this merger,” a former colleague said, “thinking he will leave behind this great company that will last for 100 years.”
On 1 March, regulators in the EU and the US gave permission for the world’s largest optical companies to form a single corporation, which will be known as EssilorLuxottica. The looming power of EssilorLuxottica is the subject of morbid obsession within the eyewear world. Everyone knows the new company is poised to have a profound impact on the way that we are going to see. “Forgive me,” said one long-time entrepreneur in the sector. “But it is nothing short of control of the industry.” One investor described the new corporation as a “category killer”. Over the coming decades, EssilorLuxottica will have the power to decide how billions of people will see, and what they can expect to pay for it.
3) Mifid reforms spur companies seeking investors to bypass brokers [Source: Financial Times]
Companies are bypassing their banks and brokers to arrange meetings and calls directly with potential investors, in response to new European rules that aim to make markets more transparent and reduce conflicts of interest. Mifid II, the sprawling EU markets regulation that came into effect this year, requires banks and brokers to charge fund managers separately for analyst research as well as for “corporate access”, such as face-to-face meetings with company management. But some fund managers are reluctant to pay for access and many are also cautious of inadvertently breaking the new rules. For this reason, several companies are exploring ways to communicate with investors without banks or brokers as middlemen — using their internal investor relations teams instead to arrange meetings and organise roadshows.
A survey of about 300 financial institutions by the UK’s Investor Relations Society and QuantiFire, an investor relations service provider, found that more than half planned to use brokers less for corporate access and said they would be more reliant on companies instead. The change is expected to harm the profitability of small City of London brokers in particular, which are more sensitive to any loss of business than deep-pocketed and more diversified banks. But bank-organised investor conferences have also been affected. Some banks are quoting large fees for non-clients who want to attend these conferences — sometimes $500 a person or more. Many asset managers are unwilling to pay to attend conferences and there are reports of a few being turned away at the door. Meanwhile, some brokers have had to cancel events after struggling to attract enough investors, while others can no longer justify hosting more glitzy affairs.
In response, companies have been devising workarounds with investors. In some cases, asset managers who have not attended conferences in an official capacity have turned up to meet company representatives without brokers. There have even been examples of companies adding days to investor roadshows in order to meet local investors directly. Many predict that this disintermediation of banks and brokers will be a boon for the investor relations profession. Among the other big winners from the market shake-up have been providers of technology that bring together investors and companies. Adrian Rusling, partner at Phoenix Investor Relations, based in Brussels, said there had been a 50% rise in the number of daily interactions between investors and companies on his online service since the introduction of Mifid II. These sorts of services are considered important for smaller companies that may struggle to spread information about themselves more widely.
Some large European stock exchanges — such as Euronext — have said they are considering partnerships with third parties to help smaller companies build relationships with investors.
4) The King of Pyongyang [Source: BBC]
In this long read, Rupert Wingfield-Hayes throws light on the life of the North Korean leader, Kim Jong-un. When Kim’s father Kim Jong–il died suddenly in December 2011, Kim had barely begun his apprenticeship to become North Korea’s third Supreme Leader. Many experts had predicted the collapse of one-man-rule, which Kim Jong-un’s grandfather, Kim Il-sung, created in 1950s. But they were soon to be proved wrong. Within months, Chief of Staff Ri Yong-ho and Defence Minister Kim Yong-chun had both been dismissed. Ri’s whereabouts remain a mystery to this day. Then in December 2013 Kim Jong-un made his most dramatic move. His own uncle, Chang Song-thaek, was hauled from a party meeting, accused of treason and executed, with some unconfirmed reports even suggesting an anti-aircraft gun had been used. Kim has removed anybody who stood in his way, replacing them with a younger cadre loyal to him. They are led by his own sister Kim Yo-jong, who in 2017 was appointed to the Politburo at the age of 30.
A look back into the history reveals much about the man. Going back to 1992, at a villa in Pyongyang a very special birthday party was held for an eight-year-old boy. Among the presents one stood out. It was a general’s uniform. Not a toy, but the real thing - a miniature but otherwise totally authentic uniform of a general of the Korean People’s Army. Other, much older generals arrived at the party and bowed before the eight-year-old boy. The little boy’s name was Kim Jong-un. According to Ko Yong-suk, Kim’s aunt, it was impossible for him to grow up as a normal person when the people around him were treating him like that. A few years later Ko Yong-suk was assigned to accompany Kim Jong-un when his father sent him to private school in Switzerland. She described the teenage Kim as hot-tempered and arrogant.
During the 1990s, a Japanese sushi chef who goes by the alias of Kenji Fujimoto became an unlikely member of the Kims’ inner circle. He made Japanese food for Kim Jong-il, and claims he was the young Kim Jong-un’s “playmate”. In 2001 Fujimoto returned to Japan and published his inside story. In it he described his first encounter with Kim Jong-un, and his older brother Kim Jong-chol. “The first time I met the two young princes, they were both wearing military uniforms. They shook hands with each of the staff. But when it came to shaking my hand, Prince Kim Jong-un gave me an icy glare. It was like he wanted to say, ‘We hate Japanese like you’. I will never forget his sharp stare. He was seven years old.” In a second book in 2003 Fujimoto wrote, “Kim Jong-chol is regarded as the most likely successor. But I doubt that very much. Kim Jong-il used to say, ‘Jong-chol is no good, he is like a girl’. His favourite is his youngest son, the second prince. Jong-un is very much like his father. He is even built like his father. But his existence has not been revealed to the public.”
Talking about Kim’s dynasty, everyone is a potential enemy. The North Korean military, the General Staff Department, the Ministry of the People’s Armed Forces as well as the entire North Korean people, they are all potential enemies. When Choi Min-jun, a North Korean defector now living in South Korea was selected to join the most elite unit in the North Korean military, the Supreme Guard Command, he was trained to trust no-one, not even his own parents. As the Kim family’s paranoia grew so did the size of this personal security force. When the Kim family saw the collapse of the Eastern bloc and the fall of the Soviet Union they were shocked. They drastically increased the size of the Supreme Guard Command. Now it numbers almost 120,000 soldiers.
That’s not all, it’s said that Kim Jong-nam, Kim Jong-un’s elder half-brother, had been poisoned with a powerful nerve agent - VX. Inhaling a drop the size of a grain of sand is enough to kill. And all the evidence seemed to point towards his younger half-brother in Pyongyang. Journalist Bradley K Martin, who’s written the definitive biography of Kim dynasty, believes Kim Jong-un had his own brother killed. He has his own theory why. “It fits with the killing of [his uncle] Chang Song-thaek,” he says. “Chang was charged with planning a coup d’état. We [the Western media] ignored that. Then Kim Jong-un went after the brother. We have these reports that Chang went to China and said, ‘Let’s get rid of Kim Jong-un and put Kim Jong-nam in’. Kim thinks: ‘My uncle and my older brother are plotting against me and are in cahoots with the Chinese.’ It makes a certain amount of sense.” While that is just a theory, but his further conclusion seems irrefutable - there are now no further threats to his rule. His internal challengers are gone. And Kim Jong-un rules supreme.
5) Winner-takes-all trend gains traction in US asset management [Source: Financial Times]
The cut-throat price war among US asset managers intensified last year as mutual funds with the lowest fees won by far the most investor inflows. Fees are becoming crucial in determining success or failure for investment managers, particularly in the US where actively managed funds that aim to pick winning stocks have lost market share to low-cost trackers that follow a broad benchmark. Forty-three per cent of US equity funds cut their charges last year, with active managers that invest in domestic stocks facing bruising competition. Only the cheapest active US domestic equity funds — those priced in the lowest 5 per cent of their peer group with fees of less than 56 basis points — could attract positive net inflows last year totaling $3bn. The other 95% of funds, which charge fees of 56bp or more, suffered combined outflows of $275bn.
Downward pressure on fees was intensifying because of increased competition among asset managers for the business of large institutional clients and the growing bargaining power of large distributors selling funds to retail investors. Vanguard, the world’s second-largest asset manager and historically the most aggressive competitor on fees, has gathered record breaking inflows for six consecutive years. BlackRock, the world’s largest asset manager, enjoyed its best year, pulling in $367bn in net cash. BlackRock and Vanguard have played a major role in escalating a price war that has drawn in other passive fund managers, including State Street and Charles Schwab.
The cheapest quartile of domestic US equity trackers, with fees of less than 20bp, had inflows of $208bn in 2017. The remainder could only attract $20bn. A similar but less extreme split in flows was registered in passively managed international equity funds, and also bond and hybrid trackers.
6) How to topple a dictator: the rebel plot that freed Gambia [Source: The Guardian]
This article from Philip Róin and Mikkel Danielsen discusses how a few rebels brought down Yahya Jammeh’s dictatorship regime and freed Gambia. When Jammeh first took power more than two decades earlier, he didn’t represent any party or ideology. Then only 29, he had been in charge of the bodyguards protecting the country’s first and only president, Dawda Jawara, who had ruled since the Gambia gained its independence from the United Kingdom. Samba Faal, who was then the vice-mayor of the capital of Banjul, still remembers the hot summer day in July 1994 when he watched a company of armed soldiers, led by Jammeh, marching toward the presidential palace. Taking advantage of the president’s absence on a trip abroad, Jammeh and his comrades seized power in a bloodless coup. Jammeh’s timing was good. Jawara had held the presidency since 1970, and Gambians had grown weary of his rule. Corruption was endemic, and the president’s friends had grown rich. “Jammeh was a simple opportunist with a plan,” Faal said. Jammeh portrayed himself as a poor man from rural Gambia, a man of the people.
Shortly after he took control, Jammeh ordered the executions of about a dozen high-ranking soldiers whom he considered threats. He was aware that the first period of a dictator’s rule is the most uncertain. According to The Dictator’s Handbook, by political scientists Alastair Smith and Bruce Bueno de Mesquita of New York University, a dictator has a 50-50 chance of surviving the first six months in power. Personality-wise Jammeh was quite an eccentric: 1) He believed he had created a home-made recipe that could cure HIV; 2) He liked to drive at speed across the country, throwing biscuits and money to the crowds from the sunroof of his Hummer limousine – a stunt that killed and injured several of his citizens; 3) He believed he was immortal and would rule Gambia for billion years. During his 22-year rule, Jammeh treated this impoverished, elongated west African country as his personal fiefdom. Jammeh amassed enormous wealth, and stashed it outside the country. The Gambian ministry of justice is still working on getting hold of deeds to 130 properties worldwide, 88 bank accounts and 14 companies that had close dealings with him.
Many people were against him, including the soldiers who guarded him. And his soldiers were the ones who betrayed him; on Saturday 13 August 2016, six of Jammeh’s bodyguards drove towards the headquarters of Jammeh’s ruling party, the Alliance for Patriotic Reorientation and Construction (APRC). They entered the headquarters, piled chairs and computers in the middle of the floor, with folders, binders and papers. On top of the pile, they placed what they had come for: three cardboard boxes containing ID cards for citizens registered to vote. It was believed that Jammeh would pay foreign nationals to come and vote for him during elections. With the fake voter IDs burnt and turned into ashes, and elections being around the corner, Jammeh’s downfall was certain. It was one of several small steps that would culminate in the toppling of one of Africa’s strangest and most enduring dictators.
With just a month to go before the election, the opposition found their candidate: the UDP treasurer, Adama Barrow, an unassuming figure who had for a time worked as a security guard in London. On 1 December 2016, Election Day, a little more than half a million people, or 60% of registered voters, turned out. As the votes were counted, it dawned on Jammeh and the population that his plan to rule for a billion years might prove exaggerated. In Serekunda, cars with blaring horns were racing through the streets; yellow flags, Barrow’s colour, fluttered in the night sky. Jammeh’s attempt to hold on to power had failed. On 22 January, a 10-car motorcade rolled up at the airport in Banjul. It stopped at a red carpet and Jammeh, impeccably clad in white, stepped out and walked to the awaiting plane. A military band played as he waved to a few loyal supporters and assembled journalists. He kissed his Qur’an before he took off.
7) This boy from Mumbai became the world’s unlikeliest crossword king [Source: narrative.ly]
As a teenager, Mangesh Ghogre was obsessed with decoding puzzles filled with foreign references. Now he’s the only non-American to ever create them for The New York Times. He shared his journey in a two-hour crossword workshop at the United States Consulate General building in Mumbai, India. This investment banker, 38, originally took up the crossword while studying for the GMAT. Entering the Veermata Jijabai Technological Institute in 1997, he quickly realised the defining temper of the place. The college was awash with ambitious students preparing for the GRE and GMAT so they could study in the US. “Everyone is walking around with a Barron’s word list,” he says, referring to the famous study material. He used to solve the crossword, or at least try to solve, every day.
His early attempts were hopeless. In the first six months the best he could do was filling in the S’s, divining from a clue that there was a plural involved but failing to solve it fully. Then he slowly managed to fill in simple answers like capitals and currencies. Still, every puzzle was a haven of unheard-of things. Mastering a puzzle from another country is more than just learning the language; the knowledge banks from which the puzzle-makers draw is a vast and varied shared vocabulary, inherently recognizable to a North American audience, but incomprehensible to others. But instead of losing interest, he became increasingly determined to master it. With a sharpened pencil, he’d be at it even during class, often getting thrown out for not paying attention. It was a year and a half before he finished his first crossword unassisted. After joining work at a bank post-graduation, Ghogre continued solving puzzles, and began earnest efforts at constructing his own in 2009. The initial volley of rejections stung. Then, his first puzzle was published in The Los Angeles Times on March 9, 2010.
What does it take to construct an American crossword? It’s something Ghogre is uniquely positioned to do. He is the only person who was born and raised outside North America, and who has never lived there, to create a crossword puzzle for The New York Times. As Ghogre runs through his 53-slide presentation, he lays out the basic rules – you can’t use two-letter words and you can’t repeat words – then dives into the details, like how to create a theme. Ghogre has published crosswords 11 times in various U.S. publications, including The New York Times, which receives 75 to 100 submissions per week. Ghogre never even visited the U.S. until he was invited to be a judge at the annual crossword tournament in 2012. This year was his fifth time serving as a judge at the annual American Crossword Puzzle Tournament, which draws 600-plus seasoned solvers.
One of Ghogre’s greatest triumphs came when an Independence Day-themed crossword he co-created with Brendan Emmett Quigley, an American puzzler, was published in The New York Times on the Fourth of July last year. The pair met at the crossword tournament, where they were both judges, and Ghogre proposed collaboration. Trading grids and clues back and forth over Whatsapp, they finalised the puzzle and submitted it, then waited two years until it was published. “I would say he is very rare,” Will Shortz, the legendary crossword editor at The New York Times and director of the annual crossword tournament, wrote in an email. Shortz confirmed that, with the exception of American-born expats, and puzzlers who were born elsewhere but raised in the U.S. or Canada, no other non-North American has ever had a puzzle published in the Times.
In the future Ghogre hopes to do more to popularize puzzles in India. Last year a selection of his crosswords was displayed at the Kala Ghoda Arts Festival, one of the city’s major annual cultural events. He plans to design a special puzzle themed around Indo-U.S. relations, hopefully to coincide with a presidential visit, and he even has aspirations to cross over into fashion with a line of crossword-inspired apparel. Between work and family commitments, Ghogre now has less time to do the daily crossword, but he closely follows conversations about the latest puzzles, themes and solutions on online message boards. Newspapers may be struggling with print subscriptions and sales, but puzzle fanatics have found plenty of virtual spaces for debate, dissection and discussion.
8) How baby boomers broke America [Source: Time]
This article revolves around how in the past five decades, the core values that made America great have begun to bring America down. This article is adapted from the book, Tailspin by Steven Brill. Lately, most Americans, regardless of their political leanings, have been asking themselves some version of the same question: How did we get here? How did the world’s greatest democracy and economy become a land of crumbling roads, galloping income inequality, bitter polarization and dysfunctional government? The First Amendment became a tool for the wealthy to put a thumb on the scales of democracy. America’s rightly celebrated dedication to due process was used as an instrument to block government from enforcing job-safety rules, holding corporate criminals accountable and otherwise protecting the unprotected. Election reforms meant to enhance democracy wound-up undercutting democracy. Ingenious financial and legal engineering turned the US economy from an engine of long-term growth and shared prosperity into a casino with only a few big winners.
America, resultantly, was split into two classes: protected and unprotected. The protected overmatched, overran and paralysed the government. The unprotected were left even further behind. In 2017, household debt grew higher than the peak reached in 2008 before the crash, with student and automobile loans staking growing claims on family paychecks. Although the U.S. remains the world’s richest country, it has the third-highest poverty rate among the 35 nations in the Organisation for Economic Co-operation and Development (OECD), behind only Turkey and Israel. Nearly 1 in 5 American children lives in a household that the government classifies as “food insecure,” meaning they are without “access to enough food for active, healthy living.” Also, the recovery from the crash of 2008 – which saw banks and bankers bailed out while millions lost their homes, savings and jobs – was reserved almost exclusively for the wealthiest.
On one side are the protected few, the winners, who don’t need government for much and even have a stake in sabotaging the government’s responsibility to all of its citizens. For them, the new, broken America works fine, at least in the short term. On the other side are the unprotected many. They may be independent and hardworking, but they look to their government to preserve their way of life and maybe even improve it. The unprotected need the government to provide good public schools so that their children have a chance to advance. It’s the protected vs. the unprotected, the common good vs. maximizing and protecting the elite winners’ winnings.
As government was disabled from delivering on vital issues, the protected were able to protect themselves still more. But, it’s the frustrated, unprotected class who voted for President Trump in hope to turn around the condition of the country and make America great again. They believed Trump would take the coal industry back to the greatness it had enjoyed 80 years before. He would rebuild the cities, block immigrants with a great wall, provide health care for all and make the country’s infrastructure the envy of the world, while cutting everyone’s taxes. Forty-six percent of those who voted figured that things were so bad, they might as well let him try. The new achievers are doing what they do not because they are gluttons for frustration, but because they believe that America can be put back on the right course. They are laying the groundwork for the feeling of disgust to be channeled into a restoration.
9) A study of NASA scientists shows how to overcome barriers to open innovation [Source: HBR]
Open innovation processes promise to enhance creative output, yet we have heard little about successful launches of new technologies, products, or services arising from these approaches. Certainly, crowdsourcing platforms (among other open innovation methods) have yielded striking solutions to hard scientific and technological problems—prominent examples being the Netflix predictive recommendation algorithm and the approach to reducing the weight of GE jet engine brackets. But most R&D organizations are still struggling to reap the very real rewards of open innovation. The authors claim to have identified an important hidden factor for this failure and that it holds the key to a successful integration and execution of open innovation methods.
They conducted a three-year study at NASA’s Space Life Sciences Directorate to closely track the opportunities and challenges involved with open innovation in an incumbent R&D organization over time. NASA took a two-track approach to solving 14 strategic problems: The organization used both the traditional collaborative R&D model led by its own experts, and also open online innovation platforms led by crowds of non-domain experts. The second approach led to relatively speedy solutions to three of the challenges and was particularly successful in the challenge of predicting dangerous solar storms, where it produced a breakthrough within a mere three months. But bringing the open-source solutions to life proved more challenging. Some of the directorate’s scientists and engineers resisted the new approaches, citing process, budget, and procedural issues.
According to the authors, the most resistant scientists and engineers saw open source methods as a fundamental challenge to their professional identities. They defined themselves as “problem solvers,” but open innovation crowdsourcing platforms didn’t let them play that role; instead, they had to frame problems for someone else to solve. By contrast, there were other scientists and engineers who perceived the open methods as an opportunity to enhance their role and capabilities. As some engineers described it, this transition was a shift from thinking “the lab is my world” to “the world is my lab.” These identity dynamics are often hidden from managers and difficult for them to shape.
The authors remained at NASA to understand how managers can influence the way innovation professionals perceive their role and integrate open innovation methods. Their research showed that managers should encourage and reward solution seeking. In every successful R&D organization there are hero stories about problem solvers; these need to evolve to celebrate the innovators who find solutions in creative ways. These are the innovators who should get the spotlight and the resources. And rather than incentivizing only patents or publication, offer financial recognition to those who embrace the solution-seeking mindset. After all, innovation is not only about having an innovative technology or science; it is also about innovating the actual process of innovation.
10) Stockholm brewery launches beer brewed from treated sewage [Source: Moneycontrol]
A Stockholm-based brewery has launched new beer prepared using treated sewage water. The main purpose of the project is to highlight sustainable water management and raise awareness of the global water issues and the value of clean water. The beer branded as PU:REST is being marketed as Sweden’s first beer brewed with recycled water. The product is a result of collaboration between IVL Swedish Environmental Research Institute, New Carnegie Brewery and Carlsberg Sweden.
“In a world threatened by water shortage, we wanted to show that we already have technologies to recycle wastewater into drinking water that is as clean as normal tap water,” says Staffan Filipsson, project manager at IVL. The institute said that it has developed technologies which if used in right combination, wastewater can be recycled both cost-effectively and to such quality that it can be returned to groundwater or reused in agriculture and industry. However, the acceptance of the technologies in practical life is nascent and is still regarded by many countries as a solution that is some way off in the future.
“The difficulties in getting this relatively cost and energy-efficient method to be used for the production of drinking water is not technical but primarily emotional. The recycled water is as pure and safe as normal tap water, but most people are still sceptical about actual drinking purified wastewater,” says Filipsson. In order to change the conceived notions about recycled water, the institute contacted the New Carnegie Brewery in Hammarby Sjöstad, Stockholm and asked if they were interested in brewing a beer with recycled water. The result was PU:REST. The beer has been premiered on May 25 and will be available for order starting July.- Saurabh Mukherjea is CEO, and Prashant Mittal is Strategist, at Ambit Capital. Views expressed are personal
