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There is just too much good stuff flowing out of the New Yorker these days, say what you will about the ‘controversial’ cover.  I need to mention a particular article, “The Eureka Hunt“, in which Jonah Lehrer describes recent advances in neurological process of insights, which is extremely relevant to those working in the creative, scientific, and services industries.  The basic premise of the article is “How do we have those ‘Eureka!’ moments” when suddenly, seemingly out of nowhere, we solve a problem we have been struggling with.  I’m quite certain that every human being has had this moment, typically when we least expect it.  I recall solving many research problems in graduate school while sleeping or playing our indoor version of the basketball game HORSE.

The moral of the story, according to the conducted research, is that diligence, focus, and drive are required to get us through the necessary analysis and extrapolation of a problem, until we reach the point where a unique insight or leap needs to be made.  But at that point, those same qualities that we store in the the work ethic tool chest, need to be abandoned to allow insights to occur, to allow our brain to make connections between what our brain stores as disparate concepts.  The researchers suggest that only when we allow ourselves to relax, to allow our minds to wander can we invoke the required parts of our brain to make these connections.  What are the consequences of this research?  For companies that rely on major intellectual advances, it is important to foster an environment that can promote this relaxation.  A few examples: ping pong tables, yoga, guitar hero, a library of book, dart boards, surfboards.  The author even specifically mentions the success of Google, the corporate king of blending the work-relaxation environment.

What else can we do to stimulate insightful thinking?

Venture hacks always supplies gems for the entrepreneur.  This post is excellent, reading and listening for anyone who wants to get a startup done.

Even more important, Mike Cassidy talks about conflict resolution within a company and how to achieve work-life balance.  Plus the dude plays ultimate which is a super plus in my book.

All this from a guy who sold hundred million dollar companies twice after only a couple years of launch.

Umair Haque at Bubblegeneration and the Harvard Business Blog has been talking about the instillation of corporate DNA for years.  It seems that with the increasing media coverage of society’s malcontents, such as global climate and environmental concerns, exploitation of labor, and lack of wealth parity, there has been a shift afoot, among management gurus, towards encouragement of benevolent values in corporate culture.  Google says “do no evil.”  Umair talks about how competitive advantage erodes value.

I don’t think this is new to us.  After all, looking out for your neighbor, while they look out for you, is a fundamental tenet of society, keeping both homes safe while one or the other might be away.  We appreciate these communal values and they are the root of an altruistic, efficient society.  But these traits are somewhat new to corporate functions, as they have thrived under profit maximization, cost cutting, competitive advantage, and crushing competition.  Accordingly, the adoption of a corporate vision, more aligned with basic human values, might be extremely challenging to implement.  What needs to happen?  When Google says our motto is “do no evil,” they don’t just say that this is our magna carta, they explain how to do no evil.  It’s the implementation of Google.org, the famous 70-20-10 rule, the contract with employees that they will provide an environment where one can be healthy, fed, and content (through free food, exercise, laundry).  They establish a framework to achieve this while developing mechanisms for feedback and evaluation.

Corporate DNA has to be bred through a concrete framework with measurables.  It seems that too often small business owners take too much of a touchy-feely approach to it and that’s going to cause confusion.  You need everyone on the same page.  While the themes and values should be touchy-feely and shared, the implementation should be rigorous.

MA just submitted an excellent post regarding dual class structures for companies entering the public market.  He has done a complete 180 on his original opposition to dual class share structures.  Let’s keep in mind that MA, a serial _successful_ entrepreneur with two home runs (Netscape, at least) and working on a third.  His insight is useful for all us entrepreneurs who happen to be lucky enough (<1% or so of us) to have the problem of taking our companies public.

As I was reading through his persuasive series of arguments for why companies with dual class shares may be aligned with long term value creation I began to think about how this could be used as a screen for potentially undervalued stocks.  This should be done, although he also brought up counter examples of net value destroying entrenched management/’Arrested Development’ style families using a public company as their personal piggy bank.

All in all, it seems that dual class shares have value to management and as long as the right incentives are in place, there should be enough gummi bears to go around for everyone.

Erik passed along a link to an HBR podcast interviewing HBS professor Rakesh Khurana’s take on whether professional business schools should implement a “Green Hippocratic Oath.”  The basic idea is to establish a codified set of principles whereby professional business managers seek to maximize corporate and social well being, as opposed to money or profits, through its practices and processes.  Professor Khurana’s view is that business school teachings have settled on the notion that students go to business school to develop an elite contact list, obtain a job that pays handsomely and maintains a reasonable moral balance, and then retire and give back after accumulating a large treasure.  He continues to argue that concepts pervasive in business school education such as “maximizing shareholder wealth” or “competitive advantage” need to expanded to include “social welfare” and “consideration for environmental impact.”  One manner this can be accomplished is through a green oath.  There are eloquent arguments for and against such an idea listed in the comments section of the post.

Two points.

1.  I personally really like this idea.  Dan Ariely, in Predictably Irrational, empirically demonstrated that the effect of an ‘honor code’, a set of rules that fall in line with societal expectations, is a strong reinforcer of behavior.  The obtainment of a business management  ‘profess’ional degree, as Ariely writes in the book, should require the practitioner to publicly profess their responsibilities as stewards of business and society.

2. I like the concept of integrating ’social good’ and other values into the utility function.  Let’s call ‘well-being’ a proxy for money, social welfare, positive environmental impact.  Economists have long known that every additional dollar made has monotonically, decreasing added value.  If you take the mathematical extrapolation of “maximizing profits” to its limit, there is zero added value created.  Clearly the outmoded concept of making a ton of money at the expense of all else is the equivalent of being stuck in a local maxima.  Global value [both in a geographical and parameter sense] can be created without being realized only in US dollars [which aren’t that valuable these days anyway].  The practical implementation is obviously completely unclear but the debate and attempts at determining this is worthwhile.

A few months ago, I was up at Stanford University, sitting in on a few of the E-Week events.  It included an interesting forum regarding ’social entrepreneurship.’ The forum consisted of the three founders of B Labs, whose goal appears to be the branding and advancing of a new type of corporate structure (B Corp vs. S Corp or C Corp).  It is a thoughtful and earnest attempt at creating a ‘badge’ or ‘honor code’ whereby corporations can act in a manner to increase well-being.   Check it out.  Oh and these guys are responsible for the And1 shoe company, so at least they were responsible for creating highlight reel dunks over the years.