Sunday, June 25, 2017

Wyn Wachhorst's Thomas Alva Edison: An American Myth

Click here to go to the Amazon page for this book.

Wachhorst is an historian and this 1981 book was well received. When I wrote my papers on entrepreneurs as heroes in 1992, I had not heard of it. But I discovered it years later (2007) doing a google search. Wachhorst uses Joseph Campbell's book The Hero With a Thousand Faces to analyze part of Edison's early life, although Wachhorst suggests that Edison might have been more trickster than hero. This is covered in a thirteen page section called "Edison's Night Journey." Very fascinating to read.

Here are some of the concepts that come up, many of which I used in comparing entrepreneurs to heroes:

Psychic symbolism
Archetypal dreams
The separation-initiation-return pattern of the adventure
The hero returning with a book for society
Shades of supernatural origins
The call to adventure
A protective figure (an old crone-mentor is not mentioned)
Threshold guardian
Belly of the whale
Road of trials (although Wachhorst says that these, for Edison, were minor or over dramatized)
Rebirth
Awakening from the night journey
Reentry to the everyday world
He gets compared to the tricksters Hermes and Prometheus (using electricity like stealing fire-Prometheus gets mentioned many times in the book)
Edison was the "apotheosis of barnyard tinkering"

Wachhorst quotes David McClelland from The Achieving Society with:

"Interestingly, David McClelland found that Hermes, the trickster of the Greek pantheon, is the mythological type which best reflects the "achievement personality.""

In one of my papers I also mention tricksters.

The word entrepreneur does not appear in the index of the Edison book. So I don't think Wachhorst looked at any research on entrepreneurs in general. Schumpeter and creative destruction don't get mentioned. Schumpeter said creative destruction is the essential nature of capitalism.

Campbell has  a  section  called "The Cosmogonic Cycle" which "unrolls the great  vision  of  the  creation  and  destruction of   the   world   which   is   vouchsafed   as revelation  to  the  successful  hero"

That is why I called one of my papers "The Creative-Destroyers."Wachhorst does call Edison "father of the electrical age." One could possibly assume that Edison created this new age and therefore destroyed the previous age. In my papers I talk about how Henry Ford created the automobile age and destroyed the horse and buggy age.

Wachhorst does not mention the radio interview when Campbell said entrepreneurs were heroes.

Friday, June 23, 2017

The Wall Street Journal Recognizes That Entrepreneurs Might Be Like Heroes From Mythology

An Entrepreneur’s Story Can Be the Perfect Marketing Tool But the startup’s tale has to grab customers. Here’s how. By Barbara Haislip of the WSJ. She spoke to Angela Randolph, assistant professor at Babson College. Excerpts:
"Effective business narratives tap into old archetypes of storytelling that go all the way back to the earliest tales of mythology. “Stories about founders and new innovations are often in the form of a myth and follow the hero’s journey,” says Dr. Randolph.

Like the heroes of classic tales, she says, the company founder is going about a normal life when they run into a problem that interrupts it. After this call to action, the founder undergoes trials that must be overcome—and along the way transforms into a leader and the idea turns into a product, service or revolutionary change. Then the founder returns to “normal” life as an entrepreneur with a product or service for society.

Founders should keep that structure in mind when coming up with their own narrative, she says, and then highlight important points.

“Strong emotions can be triggered during the hero’s call to action. For example, if the product is the result of a family member being injured or dying, the strong, sad emotions associated with the tragedy are the strong call to action that pulls the audience in,” she says. Also highlight “favorable characteristics that founder exhibited during the trial and/or the new characteristics that are the result of the trials.”"

But this all just says what I had said in my work back in 1992. I wrote a paper called "The Creative-Destroyers: Are Entrepreneurs Mythological Heroes?" It compares the entrepreneur in capitalism to the hero in mythology. I was never able to get it published in an academic journal. One referee even said the idea was dangerous. I doubt much harm would have befallen the U.S. economy had this paper been published. It is now online at

Creative Destroyers

A shorter version is at

Shorter Version

The shorter version is titled “The Calling” of the Entrepreneur (Published   in The   New   Leaders:   The   Business   Bulletin   for   Transformative   Leadership,  November/December 1992.)

Friday, June 2, 2017

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work hard. Odysseus tying himself to the mast was also a commitment device. Dean Karlan, Yale economics professor explains how commitment devices work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some behavior a “commitment device.” [Related: a Freakonomics podcast on the topic is called "Save Me From Myself."] From my WSJ op-ed:
Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."
 See What Can We Learn From Congress and African Farmers About Losing Weight?

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:
"Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories — an important innovation of the Industrial Revolution — blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: “It would be good if there were rules against being absent because it would help me come to work more often.”"
The workers, like Odyssues, tied themselves to the mast to resist the temptation of slacking. This made it possible for factories to generate the large output of the Industrial Revolution.

Some economists have written a paper called TYING ODYSSEUS TO THE MAST: EVIDENCE FROM A COMMITMENT SAVINGS PRODUCT IN THE PHILIPPINES. By Nava Ashraf, Dean Karlan, and Wesley Yin in The Quarterly Journal of Economics in 2006. Here is the abstract:
"We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited a lower discount rate for future relative to current trade-offs, and hence potentially have a preference for commitment, were indeed significantly more likely to open the commitment savings account. After twelve months, average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group. We conclude that the savings response represents a lasting change in savings, and not merely a short-term response to a new product." 

Tuesday, May 30, 2017

How Storytelling Can Shape the Corporate Brand and Culture

By Jay Gronlund.
"Technology has transformed our world into a data-obsessive circus where information is unbelievably accessible, connectivity is constant, and unpredictable events always surprise and engulf us. Call this extreme clutter and volatility. With so much information and multi-tasking surrounding us, it has become a challenge to restore simplicity, clarity and focus in our communications. These excessive conditions provide the main impetus for the re-emergence of storytelling for inspiring, engaging and connecting to others.

Storytelling is ageless and remains the most powerful form of persuasion. Socrates recognized the value of storytelling, so did Aesop, Jesus, Muhammad, Confucius and even Mark Twain. Today the power of storytelling has been scientifically proven:

    Neuroscientists have shown that the brain was built to wander on average over 1,000 times per day (e.g. including daydreams). They also found that storytelling stops this wandering and engages the listener (they call this “neuro-coupling”).

    Bruce Perry, an expert on brain development, says that “neural systems fatigue quickly, actually within 4-8 minutes, and become less responsive,” but can be stimulated and sustained by storytelling.

    Artificial Intelligence specialists have been studying how our brain actually works, especially how we file and store all this information that the brain absorbs every day. They discovered that the brain does not process information in “files” (e.g., like a computer program). As an example it sorts information from a PowerPoint presentation in a way that the first and last items on a list are usually remembered (also any item that has an emotional impact), and the rest is discarded as “trash” and never retrieved. Instead, the brain more effectively files and retrieves information when there is a context, as in the form of a story.

    Reinforcing this discovery, author and marketing professor Jennifer Aaker from Stanford notes that people remember stories as much as 22 times more than they do facts alone.

So what can storytelling do to improve communications, process our changing world, and especially help shape a corporate brand and culture? Vibrant leaders now recognize that storytelling can create an emotional connection, which is the heart of good branding. It engages listeners emotionally, creates empathy, and inspires action. Importantly, neuroscience has also concluded that humans are more likely to make decisions based on emotions, not rational thinking.

Our world is changing dramatically and so leaders are more challenged than ever to adapt to such a groundswell of populist trends, technological advances, declining trust in the establishment, globalization, growing uncertainty (particularly with the incoming Trump administration), and fundamentally what a corporation should stand for today. All these changes can affect a corporate brand and culture, so it is incumbent for a CEO to explain and especially inspire support for any updates on its corporate values and strategy. Simply using words and sharing data with customers and employees can be too cerebral and esoteric, but using storytelling to communicate “who we are,” “what we have learned,” and “why we are changing” will be far more captivating and motivating. Storytelling describes a journey and is ideal for meaningful change.

For millennials, storytelling represents an ideal form of communication. This “first digital generation” thrives on social media, which is different from traditional media mainly in that it involves a one-on-one conversation that begs for engagement, versus the one-to-many in mass marketing. Many older managers don’t understand or even resent the independent, restless, unpredictable tendencies of millennials. However, millennials represent a huge opportunity for creativity and innovative ideas, so they should not be ignored. They do want to learn and respect experience, albeit sometimes in trying ways, but the key to maximizing their potential is to engage them. And this is what storytelling does.

More companies today are using storytelling to recruit and train new employees–Apple, IBM, 3M, Nike, Coca Cola, Disney, Microsoft, NASA, and other forward-thinking organizations. In addition, as social media becomes more mainstream for advertising, they are using storytelling to engage prospective customers in blogs, videos, newsletters, content branding, and other digital communication vehicles.

Millennials simply don’t trust traditional advertising–95% rely on feedback from friends for purchase decisions instead and find stories much more credible and trustful for learning about products. Storytelling is also ideal for young entrepreneurs who focus more on cost-efficient digital media and realize that stories about their personal experience can create a strong emotional connection.

To update a corporate culture and strengthen a brand, one must learn more about the types of stories that will work, depending of course on the audience and their aspirations, the different situations (e.g., for a new leader, change in direction, new challenges, etc.) and the various nuances for making a story credible, compelling and emotionally engaging. But it all starts with a recognition of the power of storytelling in communications.

Jay Gronlund is President, founder of The Pathfinder Group, a business development firm specializing in emotional branding, ideation facilitation and international expansion. His background has focused mainly on marketing and new product development with executive positions at reputable companies in the US and abroad – Richardson Vicks/P&G, Church & Dwight, Seagram and Newsweek. Jay has also been teaching a branding course at NYU since 1999 and recently wrote a book on the “Basics of Branding”, published by Business Expert Press. Jay has a BA from Colby College and MBA from Tuck at Dartmouth (see www.ThePathfinderGroup.net) for previous articles and blogs."

Wednesday, May 24, 2017

Nobel Prize winning economist Robert Shiller: Explanations of some economic events can be found in sociologically important narratives, not the conventional data favored by economists

See How Tales of ‘Flippers’ Led to a Housing Bubble in the NY Times. He has written several articles  on this issue.  But to see an opposing view to the use of narrative in this way, see Heterodoxy at the AER by economist Scott Sumner. Excerpts:
"Real home prices rose 75 percent from February 1997 to December 2005, according to the S&P/Case-Shiller National Home Price Index, corrected for inflation by the Consumer Price Index. And then, from 2005 to 2012, real prices reversed course, falling to just 12 percent above their 1997 level. In the years since 2012, they have climbed 29 percent, about halfway back to their 2005 peak."

"The problem for economists is that these changes don’t correspond to movements in the usual suspects: interest rates, building costs, population or rents. The Consumer Price Index for Rent of Primary Residence, compiled by the United States Bureau of Labor Statistics and corrected for inflation, went up only 8 percent in 1997 to 2005, so unmet demand for housing services can’t explain the huge increase in real home prices. It doesn’t explain the 29 percent rise in real home prices since 2012 either, because inflation-adjusted rents increased only 10 percent in that period."

"I believe the price swings have something to do with the changing mentality of the times, changes caused by narratives that have gone viral and swept across the population. Looking for answers in such popular stories contrasts starkly with the prominent approach of modeling people as though they react logically to economic forces."

"The prevalent narratives of 1997 to 2005 did not include the concept of a housing bubble, not at first. A computer search using ProQuest or Google Ngrams shows that the phrase “housing bubble” was hardly used until 2005"

"during the 1997 to 2005 boom there were multitudes of narratives about smart investors who were bold enough to take a position in the market. To single out one strand, recall the stories of flippers who would buy a house, fix it up, and resell it within months at a huge profit. These stories appear to have been broadly exciting to people who didn’t flip houses themselves but who appear to have begun to think that stretching a little and buying a house with a large mortgage would make them wise investors.

In his book “The Complete Guide to Flipping Properties,” published in 2004, Steve Berges extolled what he called “the O.P.M. principle,” meaning “other people’s money.” He wrote, “Your objective is to control as much real estate as possible while using as little of your own capital as possible.” In other words, borrow as much as you can. He wrote about the upside of leverage but not about the perils of leverage during the kind of big price drops that were just around the corner."
See also The Role of Narratives in Economics: Narratives are vectors of ideas. Nobel laureate Robert Shiller suggests that in the age of social information networks, economists need to rethink how and why information really spreads by Prateek Raj of The Stigler Center's Pro Market blog.