I got to know David Hill, Lenovo's industrial design chief, when I was working on The Race for Perfect. Here he tells a wonderful story about how legendary designer Richard Sapper created the design for Lenovo's breakthrough smartbook, called Skylight. What strikes me is how passionate Sapper is about design, even in his 80s. He wanted to participate in this project so badly that he started working on spec, hoping for later approval by Lenovo's brass--which he got. Sapper and Hill had to ask for help from all sorts of unlikely sources to get the project off the ground, including a violin maker who Sapper met at a party and Hill's Photoshop genius son. Read and enjoy: http://lenovoblogs.com/designmatters/

For years, business leaders have complained that the pressure to produce ever-improving results on a quarterly basis inhibits their ability to plan and invest for the long term. Few of them have the guts to do anything about it. If they “miss” their quarter--meaning their profits fall even an iota short of the average earnings forecast by the Wall Street analysts who issue recommendations on their stock--they are punished severely. Their stock price takes a drubbing.

 

As a result of this situation, companies spend too much time and energy twisting their business into something that meets Wall Streets expectations. That's bad for them, bad for their customers, bad for their employees, and bad for the economy.

 

Still, badness rules.

 

I'm sorry to say that I don't have a brilliant and painless solution for this problem. It takes a rare CEO—brave and expert at communicating—to buck the system. And an brave board of directors, as well. Here's an amusing and enlightening little anecdote that shows just how far we have gone in the wrong direction—and suggests a path back to a more rational approach to performance monitoring.

 

As part of a project I'm working on at IBM, I have been listening to reel-to-reel tapes of a management retreat held by the company in November of 1955 at a resort in Pennsylvania's Pocono Mountains. It was to be the last such meeting for Thomas J. Watson Sr., who had led the company since 1914, and the first one run by his son, Thomas J. Watson Jr. This was a Big Think session for the executives, and, as a stimulus, Watson Jr. had invited Peter Drucker, the father of modern management, to address the group.

 

At the time, institutional investors were just then emerging as a major factor in the capital markets. While Drucker hailed that development as a boon to corporations, he warned that these investors' need for steady flows of income could become a problem. Because of increasing use of automation, industrial corporations were changing in fundamental ways. Automation reduced their reliance on production workers, who could be hired and fired quickly in response to changing demand, and increased their use of fixed costs—for equipment and for professional and engineering workers whose efforts weren't linked tightly with particular units of production. As a result, he said, companies' profits were beginning to fluctuate more dramatically. And their profit flows were out of sync with the wants of their institutional investors.

 

His advice: IBM and other companies had to educate institutional investors so they understood the need for long-term planning and investing—and to convince them to live with fluctuating profits. Now here comes the shocker: At the time, companies were measured on their performance on an annual basis, not quarterly. “Don't consider profit an annual event, but look at profitability over a much longer time cycle,” Drucker urged the IBMers. His suggestion: Six to seven years seemed about right. He scoffed at short-sightedness, saying it's what separated non-managers from managers. He asked: “Is there anybody in this room who makes a decision for so short a period as 12 months, ever?'

 

Now, I'm not suggesting that Wall Street should shift from quarterly to eight-year performance measurement horizons for corporations. But I believe that if the top 15 or 20 corporations spent more effort convincing investors to take a longer view and less effort managing their profits, then investors, workers, consumers, and the global economy would be much better off.

I've never thought about architecture as much I have since I arrived at IBM. The reason is simple: I never worked in such striking buildings before. I feel like I inhabit works of art.

 

Starting in the 1950s, longtime CEO Thomas Watson Jr. had the idea that design and architecture were important elements of building a company's brand, so he lined up one famous modernist architect after another to design IBM's buildings. The architects who received commissions since then included Eero Saarinen, who designed the research center in Yorktown Heights, New York, and a factory in Rochester, Minnesota; I.M. Pei, whose firm designed the vast hilltop campus in Somers, New York, and an addition to the former headquarters in Armonk, New York; Edward Larrabee Barnes, who designed the building at 590 Madison Avenue, in Manhattan; and Mies van der Rohe, who designed a skyscraper in downtown Chicago.

 

The building I spend most of my time in is the headquarters in Armonk, which is a long, horizontal, metal-and-glass clad building that's buried in the woods. It was designed by Kohn Pedersen Fox Associates. The lobby is a huge space that feels lid-less. One end rises up to a point like the prow of a ship. If you sit under the prow and look up through the glass at the treetops and sky, you feel a rush of adrenalin. I'm not exaggerating.

 

My new interest in architecture took me last weekend to the Saarinen show at the Museum of the City of New York. Saarinen is most famous for designing the Jetsons-like TWA terminal at JFK and the St. Louis Arch. IBM's research center is striking in subtler ways. The main hallway runs along the long curved exterior of the building, so scientists and visitors get fantastic views of a huge lawn and a wooded countryside when they walk to and fro. The extraordinary enlivens the routine.

 

Saarinen is credited by the museum show's curators with pioneering the concept of the rural corporate campus—part noble's estate and part college campus.

 

The remoteness of these buildings feels odd now, though. The threats of nuclear Armageddon and urban unrest that propelled corporations out of cities in the 1950s, 1960s, and 1970s are gone. These buildings feel disconnected from society. For me, there's a loneliness, too. After 10 years of working in midtown Manhattan, I miss all the people and buildings crowding in.

 

Still, in spite of moments of queasiness, my reaction to the change of scenery is overall positive. Like I said at the top, I'm living in art. As far as I'm concerned, that shouldn't be an altogether comfortable experience.

Now that the world has escaped a total financial meltdown, thanks to Bernanke, Obama, the leaders of China, and a huge dose of luck, it's time to start avoiding the next looming financial disaster: The impact of huge US federal deficits on the world economy and on America's ability to solve problems at home and around the world. Even though the economy is still fragile and the jobs recovery has not begun yet, there's no time to waste.

I was encouraged to hear Senators Kent Conrad and Judd Gregg talk up their proposal for a deficit task force on NPR yesterday (http://tinyurl.com/ylmtd88) they're calling for an 18-member task committee made of up eight Democrats, eight Republicans, and two people from the Obama Administration. The committee would propose ways of lowering the national deficit, which would then go to the House and Senate for a vote.

The thought that the US Congress might get beyond partisanship to take on this huge challenge is the first encouraging sign about the health of our democracy since Obama's election. Even better, they might actually get something done. Reforming Congress itself by getting rid of appropriations bill earmarks would be a good start. But there's plenty of progress to be made in the way the government bureaucracy is organized and operates.

The Obama administration already has some really smart people working on making government more efficient and effective. I met Jeff Zients, the country's chief performance officer, along with CIO Vivek Kundra and CTO Aneesh Chopra, when I wrote a piece about their efforts for BusinessWeek back in November. (http://tinyurl.com/yzunbhu) Jeff told me: “At 30,000 feet, the goal is to make government more effective and efficient by making it faster, smarter, and cheaper.”

Part of the solution is better technology. That's why Kundra and Chopra are working so closely with Zients. And there's a lot more that can be done. I was encouraged this morning to read a speech (http://tinyurl.com/yesnej3)

delivered yesterday by my new boss, IBM's Sam Palmisano, at London's Chatham House. Sam talked about what IBM has learned since it one year ago launched its Smarter Planet strategy for applying technology and thought to make the world work better. One of the takeaways is that governments and companies working together on complex problems can make things function better and more efficiently in fairly short order. One example: in four cities where IBM has helped deploy congestion management systems, traffic volume during peak periods has been reduced by up to 18 percent and CO2 emissions from vehicles were cut by up to 14 percent.

It's abundantly clear that governments need to operate much more efficiently. They're being asked to do more with less. And it's also becoming clear that technology has the potential to play a vital role. In his Chatham House speech, Sam said: “Applying smarter technologies to drive cost out of our legacy systems and institutions—doing more with less—will be critical to our near-term and long-term economic prospects.” The word “critical” is no exaggeration. Hopefully, some cool heads will prevail in the US Congress, and they'll get on with the serious business of solving the nation's looming deficit problems—with technology as an important tool.

One other thought: So much of the attention of the media today is on the latest cell phone or tablet, or the latest consumer social networking Web site. Cool, yes, and these are powerful tools for communications and social change. But the hottest features of the latest gadgets are piffles compared to the uses that technology can be put to to help solve the world's problems. I wish this powerful industry would focus more on that.

I completed my second day of orientation at IBM yesterday and reported for duty in my new workplace in Armonk. Two observations:

1) After 20 years as a journalist covering the computer industry, with objectivity a core element of my identity, I have now picked sides. It's strange but also empowering. I can get behind something 100%. I have not felt this way since I was on the football team (third-string quarterback) in high school. In this case, my team is 400,000 people strong, as large as Pittsburgh, the city I grew up in. That feels powerful.

2) When they handed out ThinkPads to people in my orientation group, it felt like we were military recruits being issued weapons. Maybe it's the machine itself; ThinkPads are so serious and purposeful in their design. Another factor is the quality of the laptops. At BusinessWeek, we got cheap Dell laptops that often malfunctioned. These ThinkPads are the well-oiled machine of the PC industry.

After 30 years as a journalist, I'm switching careers. I left BusinessWeek when it was acquired by Bloomberg on December 1.  Today I will begin working for IBM as a communications strategist and content creator. I look forward to helping out with communications and marketing for one of the best and most important companies in the world at a time of tremendous change in media and advertising. There's a great opportunity now for companies to communicate directly with their constituents in new ways--to reinvent communications. I want to help lead that transformation. I say goodbye to journalism reluctantly, but, the way I see it, journalism left me rather than the other way around. There isn't much of a business model these days for the kind of serious, in-depth journalism that I practiced. Meanwhile, the communications revolution beckons.

When Google launched Orkut in 2004, the social networking site seemed to have the potential to eventually grow to rival MySpace and Facebook in size and influence. That didn't happen. Early on, Netizens from Brazil became such avid users of the site that many people from other countries felt out of place and settled elsewhere. These days, according to Wikipedia, about half of Orkut's users are Brazilian and another 18% are Indian. (Apparently Indians aren't put off by Portuguese. What could that mean?) The first social networking site that seemed positioned to be global didn't work out that way.

Now, along comes an upstart with truly global ambitions. It's XIHA Life. (www.xihalife.com) Launched last year, the site was designed from the ground up by a young Finn living in China, Jani Penttinnen, to be multilingual and to bridge between languages and cultures. Users submit content or chat in their own languages and other people can translate the discrete chunks using Google's translation technology, which is deeply embedded in the site. Today, the site has 600,000 registered users from 208 countries (No country accounts for more than 5% of the total traffic) and about 1 million unique visitors per month. Small, yes, but it's only a year old. Penttinnen, a soft spoken guy with an elfin persona, has ambitious growth targets: 5 million in the next year and 30 million in the next five years.

This site has great potential in its globalocity. But it's not for everyone. It's a magnet for people who see themselves as global citizens or who want to reach across the national chasms. (A group that's about 70% female.) For some, the site offers the possibility of developing online pen pals. For others, it's mostly about reaching out to people in places where they're planning to travel or where they're temporarily working to get the skinny on what they should see and do. A smaller group is hooking up with people willing to help them learn a foreign language. "We try to get and keep the 'right' people--the people who are focused on our themes," says Penttinen. To help steer things in the right direction, he's rounding up a network of expats who will produce high-quality blogs about their experiences--in exchange for small fees. (If you think you have the right stuff, contact Jani@xihalife.com)

Penttinnen, 33, has a personal history befitting his occupation. He came to the US in the early 2000s as a game software programmer when he was hired by EA's Westwood Studios in Las Vegas. After EA closed the studio in 2003, he launched his own tiny mobile gaming company, XIHA Games, with a dab of angel funding. He tried to keep costs ultra-low by outsourcing much of the programming to China, but discovered that remote management of software projects didn't work very well. So he moved to China and managed a small team of programmers. A new problem emerged: To make it in the mobile gaming business, he needed to create versions of his games for each  handset operating system--a huge amount of work that was unattractive to him. Fortunately, he had a hobby that he could turn into a business. Back in 2006, he had launched a crude social networking Web site aimed at an international and multilingual audience. In late 2007, he and his Chinese wife, Wen, moved to Finland and launched an early version of XIHA Life.

This could be one of those really good ideas that never grows up, though. XIHA Life doesn't have much of a business model. Today, Penttinnen, collects affiliate fees for selling mobile games and connecting people with travel sites. That won't support a big operation. Fortunately, he has low costs. The whole thing runs on a single server (Highly optimized software) So it seems likely that XIHA Life will have a chance to succeed. In the meantime, it will be well worth watching to see how a truly global community develops. It could teach valuable lessons even if it doesn't become the next big thing. And, for travel-related businesses, it could turn into a valuable advertising and sales venue.

By the way, xiha means "fun" or "happy" in Mandarin and "Hip-Hop" in Cantonese.

One of the tough things about being a social entrepreneur, I’m told, is that it’s lonely out there. Unlike regular entrepreneurs who can readily find other people in their geographic proximity and share ideas and experiences with them, social entrepreneurs tend to be widely scattered. They commune via social networks or at infrequent and typically short gatherings of the clan.

A group of four friends in Boulder, Colorado, has come up with an inventive way to address the loneliness of the social entrepreneur. These folks, founders of The Unreasonable Institute, have created a 10-week mini-MBA for promoters of social change. No, check that. The metaphor isn’t quite right. That’s because the 25 or so young entrepreneurs who participate in the program next summer won’t just be learning the skills of social business; they’ll be putting them to work, too. The idea is to come up with ideas, develop them into business plans, vet them, divide up a small pool of venture capital, and connect with a support network—all in the span of an intense 10 weeks. It’s like packaging Silicon Valley in a box. “We want to give young social entrepreneurs the skills, training, and networks to help their ideas grow wings and create a lot of impact,” says Tyler Hartung, the Institute’s community tactician.

The four founders, all University of Colorado at Boulder grads, scan like a mini-United Nations. They refined their ideas for the Institute last summer when they were widely scattered: Teju Ravilochan in Boulder; Vladimir Dubovskiy in India; Daniel Epstein on a bike ride down the West Coast; and Hartung volunteering for a microfinance outfit in Uganda. “It was a most unreasonable time for our founding team,” quips Hartung.
For sure, these guys are having almost too much of a good time, but their idea seems to be both ingenius and practical. All experienced social entrepreneurs themselves, they’ll do a lot of the training in the program, but they’re also planning on bringing in 50 mentors from around the world who are experts in everything from business formation and venture capital to international development and poverty alleviation.

The whole process gets started on Nov. 15, when they begin taking applications from people who want to be Unreasonable Fellows. (www.unreasonableinstitute.org) Applications close on Dec. 15 and a list of finalists will be posted on Dec. 20. Then it’s time for philanthropists and social investors to get into the act. They’ll vote with their dollars for the entrepreneurs who seem to be most promising, and every applicant who raises the $6,500 tuition by Jan. 31 that way will be invited to the summer program. “We want market forces to determine who will come,” explains Hartung.

Now for my part: I’m supposed to help the group round up applicants and funders for the program. So, how about it?

This is a relief. Alec Ross, one of the key architects of Barack Obama’s technology policy during last year’s campaign, isn’t pushing ultra-high-tech solutions as a cure-all for the world’s diplomatic and social problems now that he’s senior adviser on innovation for Secretary of State Hillary Clinton. He’s practicing the art of the practical.

Ross’s job at State is to figure out how to use the global communications network to address poverty, health pandemics, human rights violations and the like. “With the ubiquity of our global networks, there are opportunities to engage with people that weren’t possible in the past. We’re practicing what I call 21st Century statecraft,” he says. While he’s supposed to use technology to accomplish Clinton’s goals, “In some cases it’s cutting edge. In other cases it’s basic.”

There’s a temptation to fantasize that just because the opposition in Iran used Twitter so successfully during its brief uprising, the latest in social media can be spread around globally like some sort of super digital goo. So it’s good to know that Ross is thinking in a more nuanced way. He gave me a couple of examples of calibrated responses to particular situations.

The low-tech solution: In the eastern Democratic Republic of Congo, where nobody rules and militias run wild, one key issue is figuring out how to get militia members to quit fighting and return to peaceful living. Ross visited with former militia members in demobilization camps and asked them for their advice. What he heard back was that the authorities should use radio to communicate with fighters who are hiding out in the bush, since they all listen to it. The former fighters also suggested that they should be put on air. Fighters would listen to somebody else who had walked in their shoes. So now the State Department is putting together a radio outreach program. “We use 1920s technology if 1920s technology is the right solution,” Ross says.

The high-tech solution: In Mexico, the State Dept. is working with the Mexican government, NGOs, and telecom companies to set up a system for tracking crimes. Right now, a big problem there is that citizens are afraid to report crimes for fear of reprisals—sometimes via police who are working with the thugs. So Ross and his collaborators are working on a cellphone-base tip-off system for the police that will scrub identifying information about the tipsters from the system. They’re also planning on mapping out the activities of common criminals and narco-trafficantes in near real-time on Web sites, so citizens can see where to avoid. “We’re bringing transparency to the activities of the bad guys and empowering citizens,” says Ross.