InReview – Issue 15

Clicks and Mortar: Passion Driven Growth in an Internet Driven World by David S. Pottruck and Terry Pearce; San Francisco, Jossey-Bass, 2000; xxxiii, 314 pp.

David S. Pottruck is President and Co-CEO of Charles Schwab. Terry Pearce is President of Leadership Communication and Professor in the Haas School of Business at University of California, Berkeley.

Clicks and Mortar is not about the melding of e-business and traditional business as the title might suggest. Rather, it deals with the transformation of business by the Internet (clicks) and the values and passion that must hold a company together in these turbulent times (mortar).

It is written and illustrated from the perspective of the development and growth of Charles Schwab through the eyes of the first author, with supporting theory and perspective from the eyes of the second. The book is divided into three sections: Culture, Leadership Practices, and Management Practices. There is a valuable concluding dialogue on the future featuring leading professors and executives such as Lew Platt (former Hewlett Packard CEO) and Steve Balmer (Microsoft CEO).

The strength of Clicks and Mortar lies in its connection to a real practice. The financial business, like so many others, has been going through a fundamental change in how it work as well as the products it presents to its customers. The richly illustrated discussion provides clear opportunity to transfer the practice to other market segments, though that transfer is left to the reader.

I agree with Lew Platt, the former HP CEO, that the three sections of the book represent the priority order of importance. But in this book I found the first section to be the weakest, almost causing me to lose interest. Other books such as The HP Way or Leadership is an Art do a better job on the subject of culture, I believe. I found the second and third sections to be much stronger, so don’t give up on this one. Tough issues involving the incorporation of change, upgrading technology, and transforming processes are well illustrated, and the difficult parts of these issues are not ducked.

Reviewed by Al Erisman

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The Social Life of Information by John Seely Brown and Paul Duguid; Boston, Harvard Business School Press, 2000; x, 320 pp.

This is a brilliant and critically-important book! John Seely Brown is the Chief Scientist at Xerox and Director of Xerox PARC (Palo Alto Research Center). Paul Duguid is research specialist in Social and Cultural Studies in Education at the University of California, Berkeley. Their basic message is that a narrow, tunnel-vision obsession with information, information technologies, and individuals blinds us to the importance of social and contextual features of human existence, communication, and work.

“The idea that information and individuals are inevitably and always part of rich social networks is central to this book” (p. ix). The “blinkered euphoria of the infoenthusiast” and rampant “endism” (the confidently predicted end of the university, the nation-state, the newspaper, etc.) are given a clear-headed and sober analysis by Brown and Duiguid. The “6-Ds” (demassification, decentralization, denationalization, despacialization, disintermediation, and disaggregation) are shown to be misleading or even false. Information technology is not necessarily making organizations flatter, more egalitarian, smaller, or less centralized. “Intelligent agents” are failures as substitutes for human agents in most important respects. They are complements, not substitutes.

The notion that individuals will be able to work at home alone with their technology has not been, and cannot be, a panacea. The loss of the social relations of the office context, to say nothing of technical support for balky software and equipment, is a huge, often unacknowledged cost to home workers. And in the organization itself, the focus on reengineering processes has been blind to the importance of socially-constructed work practices which make these processes possible.

A substantial chunk of The Social Life of Information moves into the domain of learning and education, not just in business organizations but universities. Brown and Duguid show that explicit knowledge of data and information is not all there is. Tacit knowledge, narrative, improvisation, and other features of human thinking are being overlooked in the obsession with data and explicit knowledge. Creators and leaders of distance education, virtual universities, and the like, ought to be fired if they don’t read Brown and Duguid carefully before adopting plans and budgets.

Neil Postman, Theodore Roszak, David Lyon, and other social critics and intellectuals have offered many of these critical and cautionary notes on information technology for decades. What Duguid and (especially) Brown bring is the credibility and “fit” of a critique from the inside of the high tech world. Not only their business and technology experience but their broad and deep learning (evidenced in every chapter in their ideas and sources) makes this book a potential classic that deserves as wide a readership as possible. This is in no way an anti-technology diatribe. Rather it is a bold demythologization of technophilia with a proposed, re-constructed, understanding of the human and social environment which alone can realize and sustain the promise of technology.

Reviewed by David W. Gill

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Intellectual Capital: The New Wealth of Organizations by Thomas A. Stewart; New York, Currency Doubleday, 1999; xxxi, 280 pp.

Thomas Stewart is a member of the Board of Editors at Fortune magazine. The New Economy values information and intellectual capital, and Thomas Stewart shows what this means. It is not as simple as it might sound.

First there is the problem of the balance sheet. Most accountants know how to value tangible assets, inventory, and the like. Valuing the intellect of those in the organization is much tougher.

Second, even if this intellect could be shown on the balance sheet, that by itself does not allow the company to effectively use this asset. Companies have tried to capture intellectual capital through patents, and then license the patents. But Stewart does an excellent job of showing the patents as the “wrapper” for the intellectual capital; the real worth of the knowledge goes much beyond the value or scope of the patents.

Third, the value of this intellectual capital comes in context. The idea of creating a hierarchy of data, information, knowledge and then wisdom is bogus, Stewart contends, because one person’s wisdom is another person’s data. “You cannot define and manage intellectual assets unless you know what you are trying to do with them,” he says (p.70).

Intellectual Capital does not offer simplistic answers. Measuring intellectual assets involves measuring things like innovation, attitude, learning, turnover, customer satisfaction, etc. It is hard work, but worth it, he argues.

This is a well-written, well-illustrated, occasionally humorous book, but it is incredibly dense. I don’t mean that in a negative way at all, but there are more ideas per page here than might be found per chapter in many books. This is a must read for anyone serious about capturing value in their company, because more and more the real value is found in the intellectual capital of the company.

Reviewed by Al Erisman

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