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March 20, 2008

SHELF LIFE

Forward editors review the latest books on business, economics and trade.

by William Duggan
Columbia University Press, 2007
U.S. and Canada $27.95

Strategic Intuition: The Creative Spark in Human Achievement

The term “strategic intuition” seems a paradox. After all, successful strategies require tactical planning, whereas intuition involves instinct and unconscious reasoning within the framework of past experience. But in Strategic Intuition, Duggan, associate professor at Columbia Business School in New York, argues that throughout history, the exact point in time when strategy and intuition intersect—that moment when an idea or theory is fully realized—has produced some of the most influential discoveries of all time.

What comes across as an ambiguous concept in the introductory chapter soon becomes relevant and practical for readers, specifically business leaders. Take Duggan’s analysis of 16th century astronomer Nicolaus Copernicus’ discovery that the sun is the center of the solar system, with all planets revolving around it. “Despite enormous progress in astronomy … scholars could not specify the exact date of religious holidays,” he writes. The Catholic Church consulted Copernicus for an answer. By strategically combining three elements—Ancient Greek astronomer Aristarchus’ belief that the Earth moves around the sun, various observations of heavenly bodies and recent trigonometric advances—the light bulb went on. Strategy and intuition, Duggan claims, collided to give birth to the scientific revolution.

The book’s consideration of the evolution of the personal computer, specifically the story of Internet search company Google, illustrates two important points. First, that “the combination of previous elements in a flash of insight is the essence of strategic intuition.” Google’s flash of insight came by combining three points of knowledge: the technology behind Digital Equipment Corp.’s AltaVista, which made it the leading search engine of the day with faster, better results; AltaVista’s reverse link process that directed users to pages linking to other sites—similar to academic citations—rather than sending them directly to the site; and a series of data-mining algorithms invented by one of Google’s founders. Out of this, Google founders realized reverse links could be used to rank Web sites the same way academic citations rank scholars.

The Google example also shows not all innovation leads directly to victory, but rather may take a strategy in a new direction. When Google founders made a $1 million offer to sell their patent to AltaVista, they were turned down. Alta Vista was now more interested in portals, which users pay for, than search engines, which quickly send users to other Web sites. Where’s the money in that? Just ask Google, which has made a sizeable profit from those searches. Shunning the banner ads and pop-ups found on other sites, Google came up with a way to present advertisements in simple lists, like its search results. Not a bad discovery, and one worth much more than the million refused a few years earlier.

 

by Donald Waters
Kogan Page, 2007
U.S. and Canada $90.00

Supply Chain Risk Management: Vulnerability and Resilience in Logistics

Supply Chain Risk Management considers vulnerability to sudden supply chain disruption as one of the major threats facing companies. It reviews the most widely accepted methods to identify and control risk, and offers compelling case studies from such companies as Cisco Systems, Ericsson, IKEA and First Western Bank of Canada. For producer and service center executives alike, troubled by supply chain inefficiencies, the book is worth a read.

 

by Clair Brown, John Haltiwanger and Julia Lane
University of Chicago Press, 2006
U.S. and Canada $21.00

Economic Turbulence: Is a Volatile Economy Good for America?

The relentless ups and downs of the U.S. economy are traditionally regarded as damaging and dangerous. But Economic Turbulence, written by three economists—Brown and Haltiwanger are university professors, and Lane is director of a social research organization—flips that notion on its head, exploring the positive consequences of the free-market roller coaster. The authors argue that constant job creation and elimination make the economy stronger, more flexible and more adaptable. The book offers fresh, provocative insight into the U.S. economy and job market.