Archives for July 2012

Failure as a Tool – Life Lessons From Singer/Rapper Dessa

As a fan of every opportunity to better understand failure and the powerful role it can play in our lives a friend recently sent me the recording of Dessa Darling’s (a.k.a. Margret Wander) 2012 commencement address to the College of Liberal Arts at the University of Minnesota.  Dessa earned her degree in Philosophy from the school and is a member of the indie hip hop collective Doomtree, proving that you can actually make money with a Philosophy degree.  An interesting side note on Doomtree is that they truly a collective of seven members who come together to make both music and money with no contract.  If a member chooses to leave the band they are free to leave with no strings attached and they will be replaced with a new member.  Even before forming they seemed to understand that most bands don’t survive when one person leaves and contracts need to be unwound so they created a more fungible organization that will survive and potentially flourish with artists coming and going.  This is a great example of creating a structure or process that supports a more natural state of the world.

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Having A Huge Multiplier – Barton Biggs & Morgan Stanley

Remembering back to my years in the financial industry (Morgan Stanley 1997-2003) every business unit was always looking for the “multiplier” that can have a significant impact on their business. In the failed Mortgage Bond business it was the leverage multiplier – borrow huge sums of money to invest in mortgages with the goal of “super sizing” your returns. It the Private Equity business it was the pricing multiplier that you were seeking when you were able to roll smaller companies into one larger company by shedding redundancies (i.e. layoffs) and less pricing pressure from less competition. One of my other lessons on the importance of the multiplier came within my first few weeks of joining the Firm’s MBA New Hire Training Program. The teacher was one of the Firm’s legendary Global Markets Strategists, Barton Biggs.

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Future Business Leaders: Where Have All of the General Managers Gone?

Where have all of the General Managers gone? HBR has recently run a couple of articles on this topic (Bring Back the General Manager – 7/10) and I couldn’t agree more with the findings. With the constant pressure to demonstrate quarterly profits and to find dollars to invest in growth opportunities, organizations have been trying to be as lean as possible. They are seeking to garner every efficiency that they can out of the system. One way corporations have done this is by merging smaller businesses into larger business groups and cutting out any redundancies with the new organization. The elimination of the general manager position in particular is not just due to the recent economic downturn but has been going on the better part of the last decade. After a few iterations of narrowing the food chain, an organization can be quickly left with too few good leaders who are equipped and able to lead a team of cross-functional business directors. These “Leaders” might have functional expertise in their discipline but they are lost when it comes to setting a vision and strategy their broader business.

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Is American Innovation Dead? Research Labs vs. Incremental Innovation

Is American Innovation dead? After reading Jon Gertner’s (@jongertner) recent book “The Idea Factory” that detailed the amazing frequency and impact of the innovation that was pouring out of Bell Labs back in the heyday you might think so. Just a few of Bell Labs “Gaming Changing” innovations include the first transistors; integrated circuits, fiber optics, lasers, satellites, cellular phones, and digital cameras (see complete list). These weren’t just incremental improvements in a narrow discipline but discontinuous innovations that created entirely new fields of science and engineering.

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Leadership Lessons from Our Children?

Recently, a friend and former colleague and I were discussing how we had both learned so much more about leadership and leading people from children than we had from any other source: training, education, or on the job experience. Perhaps the last example was due more to the fact that we were deficient in strong developmental “leaders” at our mutual employer but I really think there is something to the simplicity of working with children versus the complexities of leading in business. This simplicity allows us to take action, quickly see the results and then to adjust accordingly if we don’t get a “good” outcome. It is almost like a little mini case study where we get to practice our techniques in real time.

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After a “Failed Launch” in 2005 – P90X Fitness Program Earns Revenue of $700m

Inc. Magazine just did a great story “The 22nd Time is the Charm” on entrepreneurship, failure, perseverance, and finally success. When Beachbody first launched the P90X home fitness DVDs in 2005 the product was a huge failure: it was costing too much to make and the sales were dismal. By the end of that year the company’s revenues had sunk from $100m to $83m. With all of the production and marketing expenses involved in launching the product the per order costs were at roughly $250 (much of this due to sizable fixed costs and low sales volume) and they were only selling the DVDs for what they thought customers would be willing to pay at $120 per set – obviously not a sustainable business model.

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Book Review: The Black Swan by Nassim Taleb

I just added a brief book review for one of my favorite reads of the last few years – The Black Swan: The Impact of the Highly Improbable by Nassim Taleb. If you have already read the book let me know what you think by leaving a comment. Enjoy!

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