iPad/$4 billion of $300 billion negative USA trade balance with China (2011)
Actual Cost/Profit Components: Total labor 7% (Chinese labor: 2%) Materials 31% Distribution: 15% Profit: 47% Landed iPad cost: $275 = Imputed USA negative trade balance with China (Actual China cost/True negative trade balance: $10) Source: Personal Computing Industry Centre (Economist)
Things are not always as they seem. That’s a pretty big gap:
$275 vs. $10.
No kidding, this truly is … the only thing I’ve learned “for sure” … in the 48 years since I began my managerial career—as a U.S. Navy construction battalion ensign in Vietnam.
“Show up” and “Try it” are probably (UNDOUBTEDLY?) the two most durable pieces of advice that can be imagined.
If I were to update the book in 2014, there is ZERO doubt that
“a bias for action” would top the list—with even more emphasis than 32 years ago.
“WE HAVE A ‘STRATEGIC PLAN.’ IT’S CALLED DOING THINGS.” — Herb Kelleher
READY. FIRE! AIM. H. Ross Perot (vs “Aim! Aim! Aim!” /EDS vs GM/1985)
H. Ross Perot sold EDS to GM in the 1980s, and went on the car giant’s Board. A few years later he was asked to explain the difference between the two companies.
He said that at EDS the strategy was “Ready. Fire. Aim.” I.e., get on with it—now.
At GM the “strategy” was “Ready. Aim. Aim. Aim. Aim. …” (Alas, well into the 1st decade of the new century GM’s problems/unwieldy bureaucracy remained pretty much unchanged.)
1950-1980: R.A.F./Ready. Aim. Fire.
1980-2000: R.F.A./Ready. Fire! Aim.
2000-20??: F.F.F./Fire! Fire! Fire!
One wag suggested it went/goes like this.
“This is so simple it sounds stupid, but it is amazing how few oil people really understand that YOU ONLY FIND OIL IF YOU DRILL WELLS. You may think you’re finding it when you’re drawing maps and studying logs, but you
have to drill.”
Source: The Hunters, by John Masters,
wildly successful Canadian Oil & Gas wildcatter
“While many people think big oil is responsible for virtually all new discoveries, over the years about 80 percent of the oil found in the United States has been brought in by wildcatters , says Larry Nation, spokesman for the American Association of Petroleum Geologists.” —WSJ, “Wildcat Producer Sparks Oil Boom in Montana”
“Burt Rutan wasn’t a fighter jock; he was an engineer who had been asked to figure out why the F-4 Phantom was flying pilots into the ground in Vietnam. While his fellow engineers attacked such tasks with calculators, Rutan insisted on considering the problem in the air. A near-fatal flight not only led to a critical F-4 modification, it also confirmed for Rutan a notion he had held ever since he had built model airplanes as a child. The way to make a better aircraft wasn’t to sit around perfecting a design, it was to get something upin the air and see what happens, then try to fix whatever goes wrong.”
“What are Rutan’s management rules? He insists he doesn’t have any. ‘I don’t like rules,’ he says. ‘Things are so easy to change if you don’t write them down.’ Rutan feels good management works in much the same way good aircraft design does: Instead of trying to figure out the best way to do something and sticking to it, just try out an approach and keep fixing it.”
—Eric Abrahamson & David Freedman, Chapter 8, “Messy Leadership,”from A Perfect Mess: The Hidden Benefits of Disorder
“Downplaying up-front design, not matching employees’
and mistakes, not acting like a CEO—how has all this worked out for Rutan? Scaled Composites has managed 88 consecutive profitable quarters in an industry that is perennially profit challenged. The firm’s regular clients include NASA and most of the big aerospace companies—and it is known as the go-to concern when a need arises for an aircraft that flies higher or faster or farther or more nimbly or less expensively than any other has. Scaled Composites has rolled out 26 new types of aircraft in 30 years, at a time when giant aerospace companies struggle to get a single new aircraft out in a decade.”
—Eric Abrahamson & David Freedman, Chapter 8, “Messy Leadership,”