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CEO Daily: The Best in Business Reading

Good Morning.

Reinventing an industry is never easy, particularly when you’re extracting billions in profits under the incumbent model. But it’s clearly necessary in the business of smoking—and the process sure can be fascinating. “Big Tobacco Has Caught Start-up Fever” is a sprightly piece in BloombergBusinessWeek that focuses on how the cigarette industry is attempting to move beyond cigarettes. If you were generally aware of the advent of vaping and e-cigarettes and the like, this story will guide you into smoking’s present—which apparently involves a lot of ferment and a willingness to reinvent. (Who knew Reynolds sells an e-cigarette with…bluetooth?) Here’s a paragraph that captures the nub of it:

Philip Morris isn’t the only multinational tobacco company to catch innovation fever. Mature industries typically have a hard time disrupting themselves, but, flush with cigarette profits, the big competitors have decided to try. Since the rise of e-cigarettes, it’s no longer such a stretch to imagine a messianic engineer in a garage somewhere inventing a nicotine-delivery gadget capable of doing to cigarettes what Uber did to taxicabs or Napster did to the compact disc. If your profits hinge on nicotine addicts, you might want that visionary in your employ. Everywhere you look in the industry, companies are pouring money into product development while borrowing liberally from the style of Silicon Valley. They’re funding tech incubators, running venture funds, hosting TED-style talks, and developing apps. The new dogma has spread. Cigarettes are the industry’s past. Reduced-risk tobacco platforms are the user interface of the future.

Tobacco executives often sound like media owners talking about content. That is, they’re open to delivering their drug via whatever pipe the consumer chooses—be it e-cigarettes, heat-not-burn devices, gum, lozenges, dip, or some medium that hasn’t been invented yet. They are, as the media gurus would say, “platform-agnostic.”




Can You Uncover The Unknown Unknowns?

I’ve long thought that one of the central paradoxes of being a journalist is that it’s hard to find a piece of information if you don’t know to look for it. Donald Rumsfeld’s version of that idea was his concept of unknown unknowns (as opposed to the known unknowns). By definition, we can’t prepare for things that we don’t know to look for.  So how does a senior executive get outside the echo chamber they may inhabit and ask questions that elicit breakthrough information rather than just what an underling thinks the boss wants to hear? That’s one of the questions examined by “Bursting the CEO Bubble,” in the Harvard Business Review. The basic themes here aren’t super-surprising—the article advises listening more than talking and getting constant input from employees and customers at every level—but the article includes many anecdotes from CEOs and practical techniques that show how important such steps and such ways of thinking—humility, in particular—can be. SAP’s co-founder, for example, talks about how he wakes up every morning thinking about what he’s lately been wrong about. Here’s one intriguing tidbit (which, by the way, is also a technique practiced by some smart journalists):

Deval Patrick, the former governor of Massachusetts and now a managing director at Bain Capital, offers another tactic. He is a huge believer in “the power of the pause.” As he explains, “We all seem to feel like we have to fill up the space between our comments.” Quelling that impulse has repeatedly benefited him. Especially when someone is, as he says, “having a real tough time telling the boss that something isn’t going well. If you wait a beat or two, they take a deep breath and then they go ahead.” A simple pause is rewarded with “layers of valuable information.”



Behind the Curtain in Hotels

If you’ve ever had the experience, as I once did, of checking into a hotel, getting to your room for the first time…and discovering piles of linens on the floor and the maid hard at work, you’ll know how unexpectedly jarring it is. Hotels depend on stage-managing what might be called a quasi-illusion: You know, of course, that another person slept in that bed last night, and yet the room is so pristine that somehow it feels as if nobody has ever occupied the space before you. The Atlantic has an article that examines some of these behind-the-scenes issues, including the history of hotel-room design and the stresses those changes put on the people who clean the rooms. It turns out to exact a surprising cost:

Orchestrating this fiction of magical maintenance, though, can sometimes place a worrisome burden on hotel housekeepers. Designing luxury spaces without regard to maintenance can lead to high levels of physical injury among hotel housekeepers. One study of more than 900 Las Vegas housekeepers found that the “prevalence of severe bodily pain was 47 percent in general, 43 percent for neck, 59 percent for upper back, and 63 percent for low back pain.”

Bonus: Why You Need A Friend

This headline is self-explanatory: “The biggest threat facing middle-age men isn’t smoking or obesity. It’s loneliness.” This article, published in the Boston Globe, presents damning statistics on the health effects for men of not maintaining their friendships (e.g., isolation raises the risk of premature death by nearly a third). Yet the article is written in the form of a wry personal essay, and so some fairly gloomy information is presented in engaging fashion, along with a few stray intriguing observations, including about how crucial it is for men to engage in activities together as opposed to simply talking with each other.

When I was talking to Richard Schwartz, the psychiatrist told me something that had me staring off into the distance and nodding my head. Researchers have noticed a trend in photographs taken of people interacting. When female friends are talking to each other, they do it face to face. But guys stand side by side, looking out at the world together.

But in the middle years of life, those side-by-side opportunities to get together are exactly the sort of things that fall off. When you have a gap in your schedule, you feel bad running off with the fellas and leaving your partner alone to look for the shoes. And the guys I’d like to spend time with are all locked in the exact same bind as me. Planning anything takes great initiative, and if you have to take initiative every time you see someone, it’s easy to just let it disappear.

For a different gloss on why men might communicate side-by-side, read Malcolm Gladwell’s “Listening to Khakis,” a brilliant piece he did nearly 20 years ago. It begins with an examination of how Levi Strauss revived the popularity of khaki pants and ultimately leads to fascinating insights on how advertisers reach men vs. women and how the two sexes communicate and process information in radically different ways.


Nicholas Varchaver