Michael H. Goldhaber

Paul Krugman in Sunday’s NYT has an article entitled “How Did Economists Get it so Wrong?”

It’s fine as far as it goes, I think, but it misses so much, since it just focuses on financial economics. No mention of the growing wealth inequality in the US and its effects, such as forcing people to buy on credit, or using their homes a piggy banks (as long as the price was supposedly rising). No mention of the problem with the assumption that existing workers who lose jobs once they get moved abroad can find good new ones. No mention of the dubious belief that more international trade is always a good thing. and no thought at all that standard economics won’t adequately describe the actual world forever (or even now).

There has been much discussion of leadership at Apple recently. Is Steve Jobs indispensable? Short answer: “yes” In fact: “absolutely.” Jobs is the star we pay attention to through all Apple outpourings. Even in the unlikely even that an Apple user or would-be user, or even hater, has not heard Jobs’s name, or seen him on video or in a photo, what that person would most likely align to as special behind Apple products is clearly Jobs’s sensibility, his outlook towards the world, his remarkable vision and foresightedness, his particular aesthetic, his contact with the zeitgeist and so on.

I wish Jobs the best of health and a long life, of course. He has done so much to affect  so many current experiences, even of those who have never once used and Apple product. Still, though Apple Computer, Inc. might persist and possibly even do well without Jobs at the helm, I suspect it is only likely to flourish under his continued leadership. Without him, even with some other visionary at the helm, the strong alignment we have with Jobs – for those of us who do — will dissipate over time. The urgency of buying or checking out the latest Apple products and services just will not be the same.

In an article in Sunday’s NY Times (1/18/09), Steve Lohr oddly quotes two different musicians, one of whom is now a corporate “innovation  consultant” to the effect that this is not so, that Jobs has solid people in place to continue the company without hIm.

“ ‘Nobody is indispensable indefinitely,’ said John Kao, a jazz musician and innovation consultant to corporations and governments. ‘The “great man” theory does hold water, but mainly at times of transition when a charismatic leader lends what psychologists would call an individual’s ego strengths to the organization or country as a whole, to allow it to regroup and move forward.’ ”

AND

“ ‘As special as Steve is, I think of Apple as like a great jazz orchestra,’ said Michael Hawley, a professional pianist and a computer scientist who once worked for Mr. Jobs. ‘Steve did a superb job of recruiting a broad and deep talent base. When a group gets to be that size, the conductor’s job is pretty nominal — mainly attracting new talent and helping maintain the tempo, adding bits of energy here and there.’”

Bull. I submit that these musicians don’t understand their own fields, much less the secret of contemporary management.  Quite the contrary of what they say, the larger a musical ensemble, the more crucial is the conductor. This is especially true of jazz orchestras, which is one reason the great ones of the past — such as  Duke Ellington’s or the two of the Dorsey brothers — are no more. When even a standard, classical symphony orchestra changes conductor, the whole sensibility and a good deal of the fan base changes, and these are orchestras who, to a large extent, keep playing music by the same few composers. The conductor doesn’t just choose the musicians and the pieces to be played, but approaches them with a style and sensibility and a personality that the musicians as well as the audience must respond to.

I have no doubt that Jobs is gifted at spotting and nurturing talent, but that is not his only role at Apple (nor was it at Pixar or NeXT). People in the company might come to him with many wonderful ideas, and it’s possible he initiates few innovations these days. But he very clearly exercises remarkable powers of selection in choosing what should go forward — and when — and what should not. (Sometimes he makes poor choices, and he probably ignores certain areas, but that’s inevitable.)

Looking at the way Apple spokespeople (who are sometimes managers of one area or another)  dress makes it clear they follow Jobs slavishly. I very much doubt that among the talents Jobs has nurtured or could nurture is another Steve J. Such a person would almost certainly be at sharp odds with Jobs and would have gone his or her own way. And of course that person would be very unlikely to share Jobs’s exact style or vision. By way of analogy, think of a great dramatist or novelist or painter (or a great conductor to stick to the musical metaphor). Such a person might mentor another but not in any way someone who would draw the same set of fans, or resonate with similar enthusiasm.

And Other Companies?

What has all this to do with corporations in general? Quite a lot, I think. Companies that lack strong vision and can thus draw and keep consumer attention are going to have an increasingly hard time staying afloat as they encounter others that compete in one area or another. Any area that begins to be lucrative under current conditions will quickly engender competition from others who will pour into the field. The only moderately long term success will be among those who develop the kind of fan base few besides Apple have now. When the original leader quits for whatever reason, any such company will face an increasingly perilous transition. A new charismatic leader will be needed for the long term if the company is to continue to prosper, not just for the supposed transition period. Generic executives such as John Sculley and Gil Amelio were no good at running Apple. They will be less good in general anywhere, I suspect. (Though Bill Gates is more of shrewd businessman than a Jobs-like visionary, he is enough of a visionary and inspirer that Steve Ballmer, his hand-picked successor,  has been unable to replace him at Microsoft.)

Of course, though I hope that like Elliott Carter, the composer, Steve Jobs stays healthy and at work past 100, that doesn’t mean that Apple or any other particular corporation is likely to survive that long. Even if he remains that vibrant, Jobs will at some point perhaps not be so good at responding to the zeitgeist. Keynes famously said that “in the long term we will all be dead,” and that’s true of companies too. In fact, their life expectancy is growing ever shorter, I think, even as that of humans increases.

Subtleties to Bear in Mind

However, 2 caveats: (1) Just as Elvis still has fans long after his death, fans of Jobs would certainly continue to have an interest in Apple products for a long time should Jobs leave the Co. for whatever reason. Still, in the fast-moving world of computers, etc., oldies but goodies are not of much value, so a Jobs-like vision would still have to be in effect.

(2) Still more germane, the visionary behind a line of products or services need not be the CEO. Consider Google in this regard, where Larry Page and Sergey Brin are sill very active despite not being the CEO.

(Disclaimer: I own some Apple stock.)

How should companies operate when appearing to be an attention payer as well as being an attention getter is crucial for their survival. Not this way. A service that shall remain nameless sent me a notice that I would soon be billed for year’s worth of service I had already paid for. The very lengthy “chat”  recorded   here ensued.  Here are some observations of how not to pretend to pay attention that this expereince reminded me of.

1. The more “agents are protected from actually revealing their identity, the less they seem to be human beings, and the more they are likely to elicit anger. You can hardly feel someone is paying you attention if they are operating in this veiled way, as if they are machines and not persons.

2. These days, a chat box is a silly way to pretend to provide service. Why not use voice and show the agents on live video? That way a more personal relationship could be built. If further contacts were needed the customer could request  who ever gave good service before. If necessary, an appointment could be made.

3. Agents should certainly be authorized to handle reasonable requests, such as sending a confirmatory e-mail and revealing at the very least an identification number. If a company values efficiency, they should value the cusomer’s efforts as well, and should seek to  minimize the attention that must be paid on both ends. My experience is that much attention is often wasted because agents keep saying they are not authorized to do something they reasonably should be able to do. Maybe many customers give up in frustration, but they will also seek to avoid this bad service by choosing other suppliers when they can.

In ancient Athens’s Agora, in medieval Venice’s Rialto neighborhood, and in small village market squares everywhere, the marketplace for ideas — that is where attention was exchanged —commingled with the market for goods. Socrates wandered around the Agora talking with his disciples and enemies, according to Plato. But he and they spent little time trying out or examining the wares, or in bargaining over goods. Others, say in Cairo’s souks up until today, spend much time engaged in conversation and in bargaining, and would be shocked and disturbed to have their first price accepted by  customer. In these cases attention and shopping are intermingled, but still separate kinds of activity. Today, in more westernized places the relationship is different but still crucial.

Consumer spending is what is said to keep the American — and therefore the world’s — market economy afloat. In recent years this has required most consumers to go into debt, either through home loans, credit cards or both. Today it is increasingly hard to get such loans, because all the banks are afraid of lending. Meanwhile,  a substantial and growing  proportion of Americans have no way to take on more debt and still pay it back. But even if that were not so, consumption might not head up forever. In a previous post I discussed the attention costs of consumption. But there is another side to consuming, which helps explain why Americans have loved to shop. It can be described as simply this: Shopping is an avenue for getting attention. At, least, it seems to be that, sometimes even when it’s not. Let me list some of the ways shopping offers attention.

Illusory Attention

Yesterday I went to the hub of shopping in the Bay area, the few blocks around Union Square, SF. Within fairly easy walking distance is everything from the extremely downscale Burlington Coat Factory to the upscale Barney’s New York. Also, Bloomingdales, Nordstrom’s, Macy’s, Nieman-Marcus, H & S, and Saks Fifth Avenue, along with Crate and Barrel, Apple, Virgin Records, Border’s Books and many other name-brand chain stores, along with a number of discount jewelry stores and many others. Together these emporia function as a kind of gigantic museum of what designers have designed, technologists have implemented, musicians and artists and jewelers and writers have created— all as curated by the store’s buyers and display managers. Plenty of things to pay attention to, but by the same token a great deal of illusory attention. (Illusory attention is the attention you feel you are getting, as if in direct address to you, when in fact the creator in question is unaware of your specific existence or very nearly unaware of it.) You could receive illusory attention by going to an actual museum, say, but you get much of the same just by looking around in stores and shops, or eating in restaurants, especially those with notable restaurateurs or chefs behind them.

Being Attended to While Shopping

Another thing happens, at least minutely, when you shop. The salespeople pay at least a little and sometimes a lot of attention to you. You expect to be noticed and perhaps cosseted; you expect to be smiled at, thanked, perhaps complimented on your taste, told what you should and should not buy, offered reassurances that the possible recipient of your purchase will love it. (It doesn’t seem to matter that the clerk offering such assurances knows absolutely nothing about the intended recipient of a gift; they just know the recipient will love it, and sometimes this remarkable knowledge evidently seems compelling and reassuring to the customer.

Attention Paid to Gift-Givers

A high proportion of all purchases are made around the now traditional gift-giving holidays, and many  — though by no means all –are actually bought as gifts. Some of these gifts were requested, but many are shots in the dark, which may or may not turn out to be something the recipient actually wants or is happy to have. Many such gifts end up never used, instead stored away and forgotten, a kind of Keynesian boost to the world’s market economy, but still hoped to bring about some kind of gratitude and attention paid to the giver. This is so even if the giver is merely fulfilling what she or he takes to be an expectation. The recipient will probably also give a gift in return, unless she is a child or if some other inequality makes reciprocation difficult. Thus many gifts can be viewed as a frilly, inarticulate form of exchange of attention, a concrete demonstration of love, or something of the sort.

Shopping as Part of a Creative (and Therefore Potentially Attention-Getting) Act

A large number of things purchased are for display to others in some form. Such is obviously the case with many clothes, those not purely utilitarian, or maybe even those. But this also holds for furniture for electronic devices, for foods, whether to be combined into something cooked for others or merely as a display as the purchaser herself eats them in semi-public. Cars are also in this category. Sometimes the way things bought are combined is intended to be a kind of artistry, and of course our bodies and what we have on them have been the main way we get direct attention in the world,. This accounts for gyms, cosmetic surgery, ordinary cosmetics, jewelry, shoes,  diet foods, tattoos and more.

Purchasing of the Means for Expression that Will (It is Hoped) Get Attention.

Here I mean everything from art supplies to iPhones, including cameras, musical instruments, computers and much software, even sound and video systems for home use but also to show off our discoveries to friends and others. Even a substantial portion of business-related (and thus deductible) purchases are in this category. In addition to giving such things to ourselves, we can also give them to others with the intent that we will share in some sense in the attention that goes to the expression thereby made.

Attention-Seeking in Other Ways Competes with Shopping and Will Do So More

As I have discussed before, the act of shopping itself of course takes up the shoppers attention, and so the extent it can be done is limited. Further, as I also pointed out, making any use of anything one buys requires further attention. But shopping also takes money, and with money growing increasingly questionable and perhaps hard to get hold of, means of seeking attention that rely less extensively or not at all on shopping would be much sought substitutes. They are certainly available, at least for those who have Internet or cell phone access and the like, and I think that if and when the smoke clears for the money-market economy, non-monetary attention- seeking  activities will be more prominent. The advantages of shopping as a means of getting attention will quite probably permanently lessen.

The Challenge

Less shopping equals less employment, barring massive government intervention. That would yield lowered money incomes for many. That too will make the Attention Economy more important. But just as the musicians and writers of today want to be heard and read as much at least as they want to be paid, the technologists and designers and so forth will want their works widely distributed if possible, so that they can be appreciated.   I f life is not to get totally imbalanced, ways must be found to see that the good things in life are not reserved for only a small group that has managed to hold onto money or have good money incomes.  Plenty of attention will go to whoever figures out how to make this work. The time to start thinking about it is now.