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March 03, 2021 6:06 am

Click here for current month article summaries (expand/collapse)

Article Summaries

Image Title Article Summary Post date MP3 MP3 Length
Breathing Life into Intellectual Capital

Intellectual Capital+ is found dead within many a corporate or academic repository. We breathe life into these dead assets and nurture them within our exclusive community.

09-02-11 Listen 17:32
Community

We will be much stronger and more successful by banding together as a community. Individual investments leverage the reputation of the whole, and a community is not overly burdened by the shortcomings of the few.

09-02-11 Listen 17:10
Citizens

We treat investors as citizens in our community. They are educated, participative and committed. Committed investors stick around, supporting our goal of providing long-term predictable funding for unpredictable R&D+.

09-02-11 Listen 13:54
Rules

This is not your daddy's business model. We do our damnedest to keep rules in the funding agency+ to a minimum. This is consistent with the fact that the rules have yet to be written for the Phase 1 industrial+ firms into which we are investing.

09-02-11 Listen 10:46
Cautions

Here are a few common cautions. Things known to go wrong from time to time. Don’t overly fixate on them; rather keep them in mind as you review the design for the funding agency+.

09-02-11 Listen 7:21
Valuation of Intellectual Capital

We allow investors to come and go. They need a share price to buy and sell. Share prices are regularly updated and accessible for rational analysis by investors and investees alike.

09-02-11 Listen 9:55
The Cooperative Solution

Our task is to provide predictable funding for unpredictable R&D+ over the long term. Features of our funding approach (e.g., 'one person, one vote+', investor education) are closest to those found in a cooperative+.

09-02-11 Listen 8:45
Reflection-in-Action

Reflection-in-action+ is a teaching approach perfect for Phase 1 industries+, where the rules have not yet been written. It has two key aspects: learning by doing and teaching students to delight in unexpected insights.

09-02-11 Listen 14:12
Insurance

We present a (speculative) scenario exploring the use of a hazard insurance agency to protect the funding agency+ from systemic risks. This goes beyond traditional D&O insurance in that it aims to insure the reputation of the funding agency.

09-02-11 Listen 6:56
Milestones

Project milestones, as practiced in today's industries, are destructive of creativity. We abandon this practice and replace it with an independent evaluation+ of team effectiveness.

03-31-11 Listen 5:13
Intellectual Capital Valuation LLC

If you're so damn good at valuing intellectual capital+, why not sell this as a professional service to today’s funding organizations?

09-02-11 Listen 4:46
Perfect Storms

We reduce the likelihood of a financial meltdown by borrowing insights from the field of engineering.

09-02-11 Listen 5:58
Trust and Redemption

Trust is the cornerstone of our funding agency+. We seek implicit trust+, a trust that is automatic. Investors can buy and sell shares without having to work any harder than they would for an investment on the NYSE or NASDAQ.

09-02-11 Listen 6:38
Intellectual Capital

Intellectual Capital+ is much more than any of its physical manifestations (e.g., patents, trademarks). It’s greatest wealth is found mostly in the minds of its creators. We exploit this wealth by packaging those minds into Investible Units+, which in turn are packaged into a community of Investible Units.

09-02-11 Listen 3:40
All Your Eggs in One Basket

Diversification is a very poor investment strategy for unpredictable R&D+. Once you get more than a handful of investments, further diversification worsens success rates. Better to pick a few high quality investments and keep all your attention focused on making those few successful.

09-02-11 Listen 3:33
Systemic Risks

Systemic risks are those that can bankrupt the funding agency+. Their causes are often perfectly unpredictable (i.e., perfect storms). We can't foresee all these risks, so we set up the agency so it can better weather the storm when they arrive.

09-02-11 Listen 6:56
Voting Constructs

Not all votes are created equal. We construct the vote in agreement with the importance of the measure being decided, and more care is taken for measures that are more consequential.

09-02-11 Listen 14:16
Ouch!

Rigorously controlled scientific experiments often do not stand the test of time. Even interocular+ results are later found to be not replicable.

09-02-11 Listen 1:27
The Challenge of Brash Citizens

The very confidence and brashness we instill into the minds of our citizens often permits them to later claim they could have done it without us.

09-02-11 Listen 3:05
We Do Not Commit Investors for the Duration

Our belief is we can (dramatically) lower our cost of capital by making it easier for investors to come and go. We set prices for buy-sell transactions that are steady and predictable. This provides investors with assurances of a ready market when they are ready to sell.

09-02-11 Listen 3:44
Special Interest Groups

With community comes special interest groups. It’s better to bring them to the surface and embrace them, while at the same time keeping a close eye on their machinations.

09-02-11 Listen 4:02
Results That Stand the Test of Time

We frequently use the phrase results that stand the test of time. Here are the details.

09-02-11 Listen 2:51
Separation of Voting Rights from Cash Flow

One person, one vote+ is an unusual rule for business. Here we describe it in terms of a dual class capitalization (Class A, Class B, etc.) as found in many traditional corporations.

09-02-11 Listen 9:35
Predictable Funding for Unpredictable R&D

Effectiveness in industrial R&D is as much driven from the way in which it is funded as from the way in which it is executed. Here we review the funding needs.

07-11-11 Listen 8:58
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Editors' Picks

Editors’ Picks Slideshow

World Class R&D Defined

By wcrdadmin on Mon, 02/15/2010 - 21:57

No matter how successful your company’s products and services are today...

...long term success depends on your ability to continuously scan the latest breakthroughs in science and technology (Research), and to apply insights into customer wants and needs to turn those sciences and technologies into tomorrow’s successful products and services (Development).

The following are defining features of the World Class R&D organization:

Expand all | Collapse all
R&D is a trusted and valued business partner to the rest of the company

The ability of R&D to contribute to revenue growth is crucial to its reputation as a trusted and valued business partner for the rest of the company. This reputation is reflected in the relevance of R&D to the organization and in its influence in getting resources and shaping strategic decisions. This influence is found in many subtle and not-so-subtle signals+: having access to the ear of the CEO, budgeting decisions, levels of scrutiny, pressures for alternate sources of research, numbers of end runs around the R&D ‘establishment’, etc.

It is in the interest of all parties for R&D to maintain and enhance its brand. R&D management is in ...

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Reflection-in-Action

By wcrdadmin on Fri, 09/02/2011 - 00:16

It seems to me that anything that can be taught to another is relatively inconsequential and has little or no significant influence on behavior. I realize increasingly that I am only interested in learnings which significantly influence behavior … [and] the only learning which influences behavior is self-discovered, self-appropriated learning … truth that has been personally appropriated and assimilated in experience. [This] cannot be directly communicated to another. – Carl Rogers (1952). As cited in Schön, D. A. (1990). Educating the reflective practitioner

Introduction

You can’t instruct others when the rules have not been written. Ours are Phase 1 industries+, staffed by individuals not overly beholden to the prejudices of today’s industries and practices. These are individuals who simply ignore accepted knowledge and make their own.
Tonic, Lower East Side, NYC, 2005
Tonic was a live music venue which opened in 1998 and closed in 2007. It was self-described as supporting "avant-garde, creative and experimental music."

Knowing is not the same as doing. Knowing is analytic; doing is artistic. We’re industrial R&D, which is doing. You can’t instruct our researchers with books, lectures or online tests. Case studies, an approximation, are often instructionally hijacked to teach knowing and not doing. We must teach students how to do.

We rely on mentor-ship. Humble mentor-ship. We perhaps have heuristics or shared technical skills but the rules are not written. Our mentor is a learning mentor, going deeper into their own understanding of the case-at-hand while learning how to best help others go deeper in their understanding. Mentor and mentee jointly explore the ways to better exploit the raw materials at hand, given the constraints imposed by their physical properties. Our mentor revels in opening up new, unexplored dimensions in the

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Insurance

By wcrdadmin on Fri, 09/02/2011 - 00:17
The guidaticum was a safe-conduct pass (i.e., a passport) issued to travelers in the thirteenth century, extending protections and credentials to merchants entering a foreign territory to conduct business. Guidaticum were issued by anyone with the means, including barons, merchants, kings, lords and wealthy citizens. They extended the commercial reputation of a non-traveling merchant to the traveling merchant, and protected the traveling merchant while en route. The guidaticum often came with a guarantee from the issuer to be held legally liable in the local courts for the actions of the traveling merchant.

The local merchant could revoke the guidaticum if the traveling merchant attempted to deceive trading partners, significantly increasing the chance of the traveling merchant later being robbed or maimed. This was a powerful dis-incentive for the traveling merchant to engage in fraudulent activities. A guidaticum could be bought for a given period of time, or permanently with an annual fee.

We issue our funding managers a modern-day guidaticum. They have a safe-conduct pass for as long as they engage in honest trade. They purchase the pass with

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Milestones

By wcrdadmin on Thu, 03/31/2011 - 17:20

[In their 1985 quest to attract funding for new biotech research] a handful of venture capitalists … hit upon the idea that scientific accomplishment could be a marker. [They secured] milestone payments from large pharmaceutical partners in exchange for showing progress toward agreed [research] goals, thus obtaining funding. Researchers [in the ventures] began publishing in top journals, proving that the academic coin of the realm … could be deployed to attract new sources of funding. – Powell, Walter W. & Sandholtz, Kurt (2011). Chance, Nécessité, et Naïveté: Ingredients to create a new organizational form

We don’t prejudge where the next blockbuster+ product or service will appear when working in unpredictable R&D+. Today’s ugly baby+ may be tomorrow’s greatest win.

Today’s managers track project milestones in R&D. They have a ‘portfolio of R&D projects’ each with projected completion dates, risk factors and estimated commercial values. Managers map all projects along a visual timeline and ‘manage’ projects using this chart. Movement along the project chart gives the illusion of leadership and makes for great theater in endless meetings convened by managers to show off these (meticulously prepared) charts.

Project milestones have no welcome in our funding agency+. We don’t select an arbitrary commercial path or promising R&D candidates and drive forward using these as our anchor. Creative R&D means tacking and turning. We don’t shut down future options until very late in the commercialization+ game. Commercial direction, the way we address commercial needs, the very nature of how we conduct our research, are all fluid and subject to continuous change. The visualization instead is a large, dense cloud out of which ...

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Intellectual Capital Valuation LLC

By wcrdadmin on Fri, 09/02/2011 - 00:23
Investors don’t understand the intricacies of the insurance industry and yet invest quite readily into insurance firms despite their ignorance. You’re an insurance industry for intellectual capital+ (or perhaps a success assurance+ industry). Give up on this funding agency+ idea and concentrate on selling valuation services for intellectual capital.

We’re really good at valuation of intellectual capital. That’s what drives the success of our funding agency.

We’re really good at success assurance for our investments. We take intellectual capital and make it the best it can be.

We can inexpensively give you a true and honest valuation, but understand that value may be zero. If the investment isn’t structured for success there is no reason to believe it will be more successful than today’s investments – a valuation of zero becomes both easy to predict and to achieve. It’s hard to see why anyone would want to pay for an asset valuation showing this much honesty.

Premium valuation takes much more. We must first change the structure of the funding client so they are better able to support success in the investments they manage. We don’t meddle into ...

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Perfect Storms

By wcrdadmin on Fri, 09/02/2011 - 00:24
Introduction

Our task is to reduce damage from perfect storms. These storms are perfectly unpredictable, a confluence of many failures that individually should never happen. There are no sure-fire preventative measures. If we can’t predict the storm, then what can we do to reduce the damage from the storm?

At one end of the Cub Run commercial cave tour in Kentucky there is a 65 foot high spiral staircase leading from the main level of the cave up to the surface. Examine the supports attaching this staircase to the surrounding walls and you’ll notice they are pointed in very unusual angles. The engineer was a retired automotive expert from GM Experimental and the staircase supports were modeled after those found in the crumple-zones of most late model cars. "I built the staircase to support triple the weight we should see on any typical cave tour, but in case it collapses it will simply tilt over to one side."

What’s our crumple zone for systemic (financial) risks? How do we fail softly? First we must admit there is no perfect solution, or it would be prohibitively expensive. We need to accept the fact that major losses sometimes occur and look for ...

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Trust and Redemption

By wcrdadmin on Fri, 09/02/2011 - 00:24
Introduction

If our investors trust us they give us slack when we make mistakes. If not then every mistake we make, no matter how innocent, serves to confirm their distrust. It’s a slippery slope.

Ours is unpredictable R&D+. Mistakes are common. We need slack. We try something and if it works, great, if not, we try something else. The mantra at Silicon Valley is you need to fail three times before you succeed, so your first few mistakes are expected. We need seven times three attempts.

Implicit trust+ lowers transaction costs. See here for a dramatic example of broken trust in a transaction. With this trust we don’t need to put in place special protections, or to perform investigations before executing each transaction. Trusting investors will buy and sell at the perpetual fund+ share price, and will remain calm despite any turmoil in the larger public markets.

Implicit Trust

There are two levels of trust: calculated and implicit. In calculated trust I measure each and every transaction with you against the probability that you will hold up your end of the deal. Each interaction is a rational calculation. Breaches of calculated trust+, though at times

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Intellectual Capital

By wcrdadmin on Fri, 09/02/2011 - 00:25

Intellectual Capital+ – the new economy. A corporation's value is not found in bricks and mortar, rather in the skills and capabilities of its people. Show me the bricks and mortar of a Paypal or E-bay?

Property records (repositories) for Intellectual Capital are rightly viewed as a graveyard for dead capital. They capture the tangible, ignoring the much more valuable intangible components. Intellectual Capital remains dead until further packaged into a team, a mandate, a budget, a strategic direction and a sense of mission. The knowledge of how to commercially exploit Intellectual Capital, which in itself is not patentable, is where the real value lies.

Intellectual capital is much more than intellectual property. It’s much more than patents, trademarks, trade secrets, manuals and procedures, databases, software, etc. It’s more than what is commonly captured in asset property records. The very name reveals its true nature, wealth within the mind. We sell intellectual property. It’s the basis of a thriving industry.1

  • 1. IBM and Kodak make billions in licensing fees, a fact touted to sell you an intellectual capital consulting engagement so you too ...

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All Your Eggs in One Basket

By wcrdadmin on Fri, 09/02/2011 - 00:26

Put all your eggs in one basket and watch that basket. – Twain, Mark (1894). The Tragedy of Pudd'nhead Wilson

Don’t put all your eggs in one basket. This is the basis of investment diversification, the foundation of modern portfolio management theory. But then how many baskets? Probably two. It doesn't take broad diversification to achieve one's investment goals with a reasonable level of reward versus risk. For example, it would be silly to dilute a portfolio from owning five great stocks into owning thirty mediocre stocks.

Diversification is one of those oft-repeated mantras that gains an aura of truth simply from repetition. Diversification is not an empirical fact. It is most likely false, but it’s a handy crutch for individual investors and investment brokers. It’s an exaggeration+ of the advantages that come from having two baskets. The more baskets, the more the dilution of attention to each basket (but the higher the commissions paid to investment brokers).

Diversification of a stock portfolio to reduce risk works, but only up to a very limited number of stocks. Probably two. We illustrate this graphically in the case where risk is so high we might consider including four or five stocks in our portfolio (e.g., unpredictable R&D). Beyond this the number of investments per se has little impact on the actuarial outcome of a portfolio.


Success Rate per Investment. The more you diversify (add stocks to your portfolio) the less you earn as a percentage of your investment. In the case of unpredictable R&D, we estimate the optimal number of investments for the portfolio is in the range of four to six (per investment category).

With investments into unpredictable R&D+ we stop with a portfolio of four to five investments per category (e.g., pre-game+, ...

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Systemic Risks

By wcrdadmin on Fri, 09/02/2011 - 00:27
Illustrative Corporate Systemic Failures

WorldCom Fraud Centered on Connection Costs

The accounting fraud at WorldCom resulted from a decision by its chief financial officer to categorize as long-term investments money paid to local phone companies to complete calls. At the beginning of 2001 the $3.8 billion scandal came to light. WorldCom shook financial markets by announcing it would restate five quarters of past earnings to reclassify these monies instead as routine costs.

Yet another corporate scandal – employee stock option backdating

Since the start of the year (2006), more than 100 companies have undergone federal investigations into stock option backdating, a way of boosting the value of options grants used as compensation by issuing them retroactively on days when company stocks were trading low, the Securities and Exchange Commission says.

Jenkens & Gilchrist Attorneys, Former BDO Seidman CEO and Deutsche Bank Broker Found Guilty in New York of Multi-Billion Dollar Criminal Tax Fraud Scheme

The case involved making up hundreds of millions of dollars in losses for clients to avoid paying taxes.

Prosecutors: Sentence Ghilarducci to 41 months in prison

Ghilarducci ...

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Voting Constructs

By wcrdadmin on Fri, 09/02/2011 - 00:28

Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom. – von Hayek, Friedrich August (1960). The Constitution of Liberty

Introduction

One person, one vote+ is a sop to the masses. Politicians are expert at dividing votes across many competing interest groups in order to win elections. Politicians understand the ‘vote’ is an artificial contrivance, for example a weakly-held vote counts as much as a strongly-held vote. They also know what it takes to get the weakly-committed voter so disgusted they won’t even bother to vote.

We acknowledge the weaknesses of the one person, one vote rule, and leverage this understanding to improve outcomes in its use for our business votes. In our case we disentangle ‘the vote’ into its constituent parts:

  • on what is it we vote
  • what’s the best way to construct the vote to get the best answer on what it is we vote (e.g., taking into account future voters-to-be)

Individual investors, which include agency managers and investees, decide on what it is we vote. All that’s needed are a few signatures on a petition and an issue can be brought to ballot.1 To get the best answer is of course a very inflammatory statement: best for who as decided by whom?

  • 1. The campaign to outlaw dihydrogen monoxide.
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Ouch!

By wcrdadmin on Fri, 09/02/2011 - 00:29

A recent article in the New Yorker magazine, The Truth Wears Off discusses how findings from rigorously controlled studies, repeated years later by the same researcher sometimes are not replicable. This happens in medical research, behavioral research, and ecological studies. Mostly in the life sciences.

Regular readers of World Class R&D articles will recognize the pattern. It has been discussed in many articles:

  • The Flour Beetle
  • You Get the Answer You Want
  • Statistics and A>B

Many research examples cited in the New Yorker article were seemingly statistically solid — that is, they contained enough data so the effect due to ‘statistical fluctuations’ shouldn’t be as dramatic as those later found. But results were not replicable none-the-less.

The conclusion of the article is startling:

We like to pretend our experiments define the truth for us. But that’s often not the case. Just because an idea is true doesn’t mean it can be proved. And just because an idea can be proved doesn’t mean it’s true. When the experiments are done, we still have to choose what to believe.

What this means for industrial R&D is that in order to commit to a line of ...

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The Challenge of Brash Citizens

By wcrdadmin on Fri, 09/02/2011 - 00:30

The most difficult task for the funding agent+ will be the distribution of new-found wealth across the citizenry. We will often distribute enormous sums of cash.

Your early success and momentum are a result of the full faith and backing you received as a member of the community. You had access to the community Rolodex. You leveraged the financial reputation built up by those who came before you. You leveraged the funding agency infrastructure. There are a thousand little considerations you received that contributed to your eventual success. It’s excusable to forget or diminish some of these benefits individually, but you could not have succeeded without them collectively.

It’s too easy for citizens to point to their own unique contribution as a claim for a greater share of newly-minted wealth. This wealth emerges from the minds of members in our community. The very confidence and brashness we instill into the minds of our citizens often permit them to later claim they could have done it without us, and therefore deserve a greater share in their success. We check this ambition, but in a way that keeps the passion directed toward building even more

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We Do Not Commit Investors for the Duration

By wcrdadmin on Fri, 09/02/2011 - 00:31

We do not commit investors for the duration. We prefer long-term investors, consistent with our aim of providing long-term predictable funding for unpredictable R&D+. We provide many sweeteners to retain the business of each investor. But we leave it to the investor to decide how long they want to stay.

We could ask investors to provide funding until success happens (the venture capital model). It could be 5, 10 or 15 years. In exchange for such lengthy commitments investors would demand exorbitant returns, would meddle in the affairs of our investees, and would come up with unreasonable demands on the timing of returns. The Investee Bill of Rights and Obligations would be under constant assault, risking returns for all investors. We practice instead voluntary retention.

Our approach provides steady share pricing over decades. We make-a-market in a perpetual fund+. Share price is independent of mood swings in the larger public markets. The value of assets underpinning our share price doesn’t change much from period-to-period. Events causing large changes in valuation for underlying assets+ are infrequent (e.g., advancements+, exits, IPO’s). The ...

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Special Interest Groups

By wcrdadmin on Fri, 09/02/2011 - 00:32

A political entrepreneur is an individual who seeks political and social gains in return for providing public goods to the unorganized general public. Public goods provided ... include foreign- and domestic-public policy changes, while the benefits the entrepreneur hopes to gain include voter support, public recognition, and personal popularity. – Choi, Taewook (2004) "Promoting a Northeast Asia Economic Integration Policy", Korea Focus, May-April, 2004, vol. 12, no. 2. The quotation has been paraphrased for the sake of clarity.

We build community. And with communities come politicians and special interest groups to influence those politicians. Special Interest Groups band together to promote or protect their own narrow interests. Special Interest Groups are extra-agency entities, outside the agency but with the agency as their target. They want a bigger slice of the community pie. In exchange for greater power and tenure, politicians are often willing to deal.

Special Interest Groups can be a powerful force for building community. They break down larger issues of the community into bite-sized pieces, so time-constrained members can gain an expertise that can be put to practical use. They provide a creative outlet for ambitious political entrepreneurs and their followers, who otherwise might engage in political mischief. They get their members to the polls, tapping into the more intense passion of their members by placing issues or candidates of importance on the ballot. Interest groups serve as a conduit to the community bureaucrats, both as a check on their actions and as a way to build understanding and sympathy for their many challenges. In these ...

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Results That Stand the Test of Time

By wcrdadmin on Fri, 09/02/2011 - 00:33

Individuals (typically agency management+ and management of Investible Units+) will eventually have a significant stake-in-the-game in the form of reinvested equity. This equity is at risk. We will reach into reinvested equity to repair damages caused by those individuals. These monies stay reinvested until they can be shown to result from success that is repeatable, that strikes twice. They monies must also be shown to not have been the result of having mortgaged the future of the agency.

What this means is agency management (and manager-owners of the Investible Units) will not receive extraordinary compensation until many years after it is assigned them. Managers would be wise not to use this assigned equity as security for personal loans. This money is restricted. It can be taken back should the manager later be found to have earned it inappropriately (based on subsequent agency history). A better description of these monies would be ‘equity assigned but not yet earned’.

These ‘assigned’ monies come from Investible Units going IPO+, from sale of sub-blockbuster+ products, or from sale of the first blockbuster product for an Investible Unit.

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Separation of Voting Rights from Cash Flow

By wcrdadmin on Fri, 09/02/2011 - 00:34

You can’t fix stupid – White, Ron (2006). I had the right to remain silent – but I didn’t have the ability.

If investors are not going to vote even when it’s in their own best interest (or they vote in ignorance) then they deserve what they get. However, we don’t visit the sins of the father upon the children. Our judiciary protects future voters from today’s voter apathy.

 

 

Dual Class Capitalization

One person, one vote+. We explore implications of this voting rule from the perspective of dual class capitalization structures, as found in many modern corporations. Typically this involves a Class A shares with full voting rights and Class B shares with inferior or no voting rights. When both classes share equally in cash flows from the firm, then Class A trades at a 5% to 35% premium over Class B. The vote has value per se, but many other factors influence its value (e.g., countries with strong governmental protections of shareholder rights, percentage of Class A shares already owned by insiders).

Dual structures arise because insiders (e.g., management and institutional investors) want their votes to count more. They want it so badly they are known to take out (extremely) large loans, purchase Class A shares, vote the shares, ...

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Predictable Funding for Unpredictable R&D

By wcrdadmin on Mon, 07/11/2011 - 13:32
A .pdf of this article is provided here for your reading comfort.

R&D productivity is falling precipitously across several major industrial sectors. There are many contributing factors, but the most important seems to be the lack of continuous renewal in today’s industrial R&D organizations. A predominate ‘factory model’ inevitably runs its course and only firms deliberately positioned with new models are able to escape the descent into commoditization. It’s not from lack of trying. Instead most firms in most industries fail to appreciate that funding development of new models requires new models for funding.1

Entrepreneurs are those individuals who take on a challenge simply ...

  • 1. In pharmaceutical R&D, the research model based on receptor theory and advances in organic chemistry has run its course. Attempts to ‘acquire’ new models have failed, not surprisingly. New wine into old wineskins.
    Receptor concept: pharmacology's big idea. H P Rang. J Pharmacol. 2006 January; 147(S1): S9–S16.
    "Pharmaceutical M&A activity during the last decade lost close to one trillion dollars in value" - Burrill & Company's 25th Annual Report
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Glossary Terms

Trial & Error

The commonplace terminology for Evidence Based Management. Try out a new management practice and if it works, great. If not, then try something else. Trial & error implies a reasoned connection between prior errors and subsequent trials. It refers to a thoughtful build of new trials based on the experience from previous trials. Behaviors are ugly and the only way we arrive at more effective behaviors is by trial and error. We never assume that what has worked in the past will work again...

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News You Can Use

World Class R&D News Items, September 2011

World Class R&D Quotations

New Men
[Wally] Gilbert’s lab … the tone of the place was casual, almost fiercely informal. Graduate students would drift into the lab around noon.., and often work until the wee hours of the morning or on through the next day. There would be mass excursions to the local Szechwan restaurant for meals, or sandwiches grabbed on the fly. DNA would be chopped and mixed and analyzed to the sounds of Joni Mitchell and the Rolling Stones. At about three or four a.m., the stereos would turn up very loud. People would be working madly. – Stephen Hall, Science Journalist (1987). Describing Biogen co-founder Wally Gilbert’s style of lab, as cited in Chance, Nécessité, et Naïveté: Ingredients to create a new organizational form

World Class R&D Checklist Item

I promise to respect discontinuous discovery in funding; You promise to never hold me hostage to the success or failure of any one or few projects

A common theme of the Institute is the discontinuous nature of the blockbuster pursuit and how we should do everything possible to not include them in our promises and forecasts. This means I as the funding agent (i.e., corporation) promise to not hold R&D responsible for delivery of blockbusters on a predictable schedule. This means that you, as agents of R&D, promise to deliver sub-blockbuster products on a regular schedule to allow me to feed my forecasts and assuage my investors.

If I do not receive a steady stream of sub-blockbuster products that I will reasonably be tempted to conflate that next blockbuster into my forecasts in order to make up for any shortfalls. I need smooth growth, and will grasp the unpredictable, the bonanza, if I need it to give the appearance of smooth growth.

The game plan for R&D is to provide commercial (the corporation) with way too many sub blockbuster products, so they instead have to find ways to delay revenues, rather than fabricate revenues. It's a good problem to have, and this redounds to the improvement of the reputation of R&D in the eyes of their corporate partners.


 

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