In "The Laws of Disruption," Larry Downes writes that "technology changes exponentially, but social, economic and legal systems change incrementally," reports Jeremy Philips in the Wall Street Journal (10/13/09). In other words, where the "digital revolution" is concerned, Larry thinks "our laws have not kept pace with the changes it has brought about." So, for instance, he thinks "regulators should leave the web alone and simply protect it from interference -- for example, by granting immunity to websites that might be sued for the comments of their users."

He also thinks that "treating information as a kind of property just doesn't work anymore." For example: "one person reading an e-book doesn't prevent someone else from reading it at the same time." However, Jeremy Philips counters that "the value of a book has always been in the words, not the paper -- and those words still need to be protected, in whatever form they appear." Larry also suggests that "the value of information ... increases exponentially as new users absorb it." But Jeremy observes that this isn't always true, citing financial data, the value of which increases with its scarcity.

Larry then argues that brand value increases the more broadly it is distributed. Again, Larry says this just isn't necessarily so, noting, "Firms carefully protect their brands to ensure that they are not over-exposed or given the wrong associations." He notes that Jeremy "himself illustrates the distinction when he discusses the dispute between Apple Inc. ... and Apple Corps ... over the use of the trademark 'Apple.'" Finally, Larry thinks that since it's "virtually impossible for average consumers to avoid violating copyright law" such laws should be changed. And Jeremy thinks this would be "a perverse way of reducing infringement."

While other artists resist, adapt or succumb to the scourge of illegal music downloads, the Beatles simply turn to "more innovative and high-priced digital products," reports L. Gordon Crovitz in the Wall Street Journal (11/9/09). The idea that "sales and illegal downloads of their songs as loss leaders for their live performances" obviously is a non-starter for the Beatles, whose last tour concluded in 1966 (another tour is unlikely as long as John Lennon and George Harrison remain dead).

And, unlike many other artists, the Beatles "brand is so valuable that they can maintain scarcity even in a world of file sharing and mass downloading." George Harrison's son, Dhani, simply states that the Beatles "disagree" with the notion that a Beatles song is worth only 99 cents on iTunes. So, the Beatles are instead focused on other things, like "The Beatles: Rock Band," a videogame that includes their music, but must "be played through the game console and can't be downloaded or shared."

They've also released a limited-edition "USB flash drive (link) containing all the audio and video from a re-mastered stereo box set, which can be played on computers." As Gordon observes: "The downside of the open architecture of the web is a ... devaluing of the effort and creative genius that went into creating songs and other works." At some point, he suggests, new technology will support "economic incentives for digital creating and sharing." Until then, we can always just buy the Beatles CDs online and upload them freely.

"All of our social problems arise out of doing the wrong things righter," said the late Russell Ackoff, as quoted by Stephen Miller in a Wall Street Journal remembrance (11/11/09). "The more efficient you are at doing the wrong thing, the wronger you become. It is much better to do the right thing wronger than the wrong thing righter! If you do the right thing wrong and correct it, you get better!" That may sound like it comes from the Dr. Seuss school of business management, but it's the kind of thinking that helped Anheuser-Busch "achieve national dominance."

For A-B, it turned out, the wrong thing was to increase advertising budgets or try to improve the taste of its beer. Mr. Ackoff determined that neither of these initiatives increased sales. So, his advice was to keep the ad budget flat, and pass the savings along to consumers, "making Budweiser inexpensive compared with local brands." A-B followed this strategy from 1961 to 1976, during which time it quadrupled sales.

Indeed, over the 30 years the company worked with Mr. Ackoff, its "market share grew to more than 40 percent from seven percent." A-B gratefully funded a business graduate center at Wharton (link) in Mr. Ackoff's name, where "he trained generations of management graduate students in an unconventional program that," as he put it, had "no curriculum, no classes, no examinations, no admission requirements -- only exit requirements." He attributed his holistic perspective to his training as an architect, and eschewed the term "guru" in favor of "teacher," his idea being that he was simply "helping his clients design their own solutions."

The problem with many companies is that they judge employees on everything except "whether the job gets done and the customer is happy," write Brian M. Carney and Isaac Getz in Freedom, Inc., as excerpted in the Wall Street Journal (10/15/09). The authors draw from the philosophy of Jean-François Zobrist, a former chief executive, who observed that there are two kinds of companies -- "how" companies and "why" companies.

The "how" companies "spend their time telling workers how to do their jobs," while the "why" companies "replace all the 'hows' with a single question: Why are you doing what you're doing?" Where the "how" approach completely ignores customer happiness, the "why" question has only one answer, which is "to keep the customers happy." And if you're keeping the customer happy, the "how" is pretty much irrelevant.

The authors also write about "the hidden cost of top-down thinking," which refers to a failure to account for "disengaged, stressed out, ill, or even absent" employees. This hidden cost results in "turnover, workplace stress, conflict-ridden labor relations," as well as "a lack of innovation and slumping organic growth." They also call for a new kind of leadership, where leaders eschew status symbols and subordinate themselves to their employees. The key, they say, is to make your people feel like "human beings instead of human resources."

For 25 years, Matti Holtzberg has been perfecting a car engine made of plastic, reports Don Sherman in the New York Times (10/25/09). It's not as crazy as it sounds. After all, "if modern plastics are sturdy enough for 600-mile-per-hour airplanes, why are car engines still made by pouring molten metal into molds, a 6,000-year-old process?" True, it's just airplane wings and fuselages that are made of plastics, but still. A plastic car engine would shave considerable weight -- as much as 30-35 percent -- from that of an aluminum engine. It would also "trim both material and machining costs."

Matti has also proved he can make the concept work. In fact, back in 1979, he re-built a Ford Pinto with an engine, known as a Polimotor, using "plastic for the block, piston skirts, connecting rods, oil pan and most of the cylinder head." Two years later, he built a "300-horsepower design weighing 152 pounds; a stock Pinto engine made 88 horsepower and weighed 415 pounds." He even "campaigned a Lola racecar" to prove the engine's worth (link), and "the only mishap during half-a-dozen 1984 and 1985 races was the failure of a connecting rod, a part purchased from an outside supplier."

Over the years, Matti has accumulated various patents related to plastic engines, and "views his composite casting technology as the next logical step in the evolution of the automobile, from wood, iron, and steel, to magnesium and advanced plastics." But car companies apparently still see plastic engines as risky, and in any case own the foundries used to supply "major aluminum power train castings." But Matti has now formed a partnership with Huntsman Corp., a major auto industry supplier, and hopes for a breakthrough "before internal combustion is finally superseded by electric propulsion."

"Innovation is not necessarily discovering new things, but discovering how to use old things in a new way," says Amitabha Kumar in a Wall Street Journal piece by Cari Tuna (11/4/09). Amitabha is director of research and development for CalStar, which has figured out how to "make bricks from fly ash, a byproduct of coal burning. It claims to use roughly 85 percent less energy than traditional clay brick manufacturing, with an equivalent reduction in carbon-dioxide emissions." The fly-ash bricks are also slightly cheaper, selling in Chicago "for 53 cents apiece on average, compared with 55 cents on average per commercial clay brick."

CalStar says the fly-ash bricks "meet standards ... for things like strength, durability and water absorption -- and will be installed in buildings for the first time early next year." However, a spokesperson for the Brick Industry Association says that "fly-ash bricks aren't bricks by definition, and questions whether they'll last as long as clay bricks." While it's true that industry standards "don't apply to fly-ash bricks," Richard Klingner of the University of Texas at Austin says that this doesn't necessarily mean the fly-ash bricks are bad, just that "there isn't a standard for them yet."

Meanwhile, Icynene Inc. "has a foam insulation spray made partly from castor oil, a substitute for fiberglass insulation" and Calera, a cement-maker, "aims to capture carbon-dioxide emissions" from cement production, effectively halving the greenhouse gas "released into the atmosphere" in the process. Each of these companies hopes to gain a foothold in the "green" construction sector, which is "projected to grow to between $96 billion and $140 billion by 2013 from about $45 billion last year." Venture capitalists meanwhile have "invested $465 million in the U.S. green-building sector in the first nine months of 2009, compared with $284 million" a year ago.

It turns out that the happier you are while shopping, the more likely you are to spring for an extended warranty, reports Damon Darlin in the New York Times (11/9/09). Retailers know this, of course, and price the warranties accordingly: "For instance, a four-year warranty on the Nikon D3000 camera at Best Buy is $150, or more than 27 percent of the $550 price. The warranty on a Hewlett-Packard N270 netbook is $130, or just short of a third of the computer's $400 price."

However, Consumer Reports says that overall failure rate of 10 brands of cameras over a three-year period is just 10 percent. For televisions, it is just three percent. For laptops it is 43 percent, "but that includes accidents and keyboard spills (which often aren't covered by basic extended warranties)." Meanwhile, "washing machines, which typically have a far higher failure rate than television sets, carry extended warranties that are about eight percent of the product's price)."

Apparently, this is because it's harder to sell a shopper on a warranty for a product that they're just not all that excited about. A study by the Journal of Consumer Research (link) "found that people were more likely to buy warranties on products that brought them pleasure ... than on ones that were merely useful." The study "also found that people were more likely to buy an extended warranty if they received a discount on the product, especially an unexpected one. The windfall makes people feel good. And a positive mood makes people more risk-averse because they are afraid of losing that good feeling, which makes potential losses look greater."

A new book by Lee Eisenberg takes a look at why Americans just can't quit shopping, even when times are bad, reports Laura Vanderkam in the Wall Street Journal (11/2/09). Lee's last book, The Number, offered "a new way of looking at retirement." This new one, Shoptimism, "aims to offer a similarly novel view on the big idea of buying and selling." As Laura notes, "There is a coincidental affinity between the subjects: One of the reasons we have such trouble saving for retirement is that merchandisers are so good at getting us to part with our money."

She also observes that much of what Lee has to say on the subject has been covered before, by the likes of Paco Underhill (Why We Buy) and Martin Lindstrom (Buyology). But she says "it's entertaining to have it compiled in one big-box store of a book." And while she thinks Lee "misses opportunities to create a more compelling narrative," he does come up with some interesting observations. For example: "Black Friday shoppers, just after Thanksgiving, say that they're battling the crowds on behalf of themselves rather than shopping for loved ones."

But Laura thinks the book gets bogged down in "endless taxonomies of shoppers (e.g., Bring-Back Queens and Friends of Faux"). But she does give him props for "the overarching argument inherent in his title: Shopping, in modern America, is fundamentally an optimistic activity. While our shopping habits are easily manipulated, they are not quite as irrational as critics like us to believe ... we buy because 'buying is fun, sociable and diverting, an escape from a boring, predictable existence'." And, ultimately, that's why, "recession or not, it's hard to keep Americans out of the stores."

A roundtable with Richard McDonald of Fender, Steve Rotterdam of DC Comics, Peter O'Reilly of the NFL, Joe Dobrow of Sprouts  and Spencer Hapoienu of Insight Out of Chaos. (more)

"... A whole, unmilled tree can support 50 percent more weight than the largest piece of lumber milled from the same tree," reports Anne Raver in the New York Times (11/5/09). That's according to research by the Forest Products Laboratory, and it is the organizing principle of Whole Trees Architecture and Construction, which uses whole, small-diameter trees -- those too small to mill -- to build homes, commercial buildings as well as greenhouses. "Curves are stronger than straight lines," says Roald Gundersen, who runs Whole Trees with his "life and business partner," Amelia Baxter.

"A single arch supporting a roof can laterally brace the building in all directions," says Roald. It's also both cost-efficient and environmentally-friendly, he continues: "It's eminently more frugal and sustainable than milling trees ... These are weed trees, so when you take them out, you improve the forest stand and get a building out of it. You haven't stripped an entire hillside out west to build it, or used a lot of oil to transport the lumber." The designs are pretty cool-looking, too (images). Typically Roald uses "small-diameter trees as rafters and framing ... and big trees felled by wind, disease or insects as powerful columns and curving beams."

"It almost feels like we're in a forest, the trees have such presence," says Marcia Halligan, a client. Roald's designs are also passive-solar, with "double-paned glass, positioned to optimize the low-angle winter light," facing south. The concept is especially useful for Roald's solar greenhouses, which "can extend the growing season through the winter, even in a place where temperatures can drop 30 or 40 below." Cost to build a home is "as low as $100 a square foot," and Roald says demand is growing, especially for smaller homes. "I've taken 20 trees per year off one acre, for 12 buildings," says Roald. "You can never tell that we've taken that much wood."