 |
|
Notable Books
|
Our
goal is to identify—and briefly describe—the
small number of important books that are truly insightful
about consequential matters and offer new ways of
addressing complex topics pertinent to thinking strategically
about the institutional world. Herewith, our first
set:
The Social Life of Information
by John Seely Brown and Paul
Duguid
Harvard Business School Press, 2000. 317 pp., $35.95
The bubble may have burst, but that has hardly stopped
prognostications that the Internet and the
rapid accessibility of information will change everything,
including social organizations as we know them.
| Brown
and Duguid succinctly
discuss the interrelationship of social
institutions and technology. |
But
a new line of thinking—superbly presented in
The Social Life of Information—argues
that the telecommunication-induced “death of
distance,” to use Economist writer Frances Cairncross’
term, actually increases the importance of place.
Matters of habit, environment and judgment play critical
and under-appreciated roles in how technology gets
used and for what purposes.
For nonprofit institutions, the message is clear:
when weighing investments in technology, pay as much
attention to looking at the social networks in which
the technology will be used, as to the more typical
IT-centered focus on capacity and capability. The
social context of information, say the authors, is
decisive in determining the role, value and implications
of technology and is as important as the information
being transmitted.
Nonprofit executives should not expect prescriptions
from this book, but rather a set of questions about
the interactions of technology with existing structures
and approaches delivered with wit, humor and insight
in a series of interconnected essays. The authors—
Brown is the former Chief Scientist at Xerox Corporation
and former Director of the Xerox Palo Alto Research
Center (commonly known as PARC) while Duguid is a
research specialist in Social and Cultural Studies
in Education at the University of California at Berkeley—
draw upon a wide array of examples from both the nonprofit
and corporate sectors.
The
volume is informed by a nicely contrarian sensibility,
which coupled with the authors’ expert knowledge,
passionate humanism and broad understanding provides
provocative insights and thoughtful observations about
likely ways technology will affect institutions and
enrich work and education.
Against the blind enthusiasms of the futurists and
technocrats, Brown and Duguid suggest that “society
and social resources can solve many of the problems
of both information and technology” and that
it is society and social resources to which many technological
designs and approaches are “blinkered, if not
blind.” The chapters on the unnoticed aspects
of the document and their implications for design
and the future of the university are particularly
cogent. The authors
observe, for instance, that the success of much new
technology on campus has little to do with geographical
distance and a great deal with enabling people to
interact across time, and thus serve as an extension
of, not a replacement for, faceto- face meetings.
No other recent volume has so succinctly and compellingly
made the case for the role of social institutions
on the evolution of technology and, conversely, how
technology is, in fact, likely to influence the shape,
structure and reach of institutions.
The
Ideas That Conquered the World: Peace, Democracy,
and Free Markets in the Twenty-first Century
by Michael Mandelbaum
PublicAffairs, 2002. 496 pp., $30.00
The nonprofit sector has become increasingly “privatized”
over the past decade or so. Growing attention to the
needs and interests of funders and donors, new institutional
interrelationships with private sector organizations
and emerging private sector players in traditional
nonprofit areas are but some of the ways in which
nonprofit institutions have been influenced by—and
are influencing—increasingly pervasive free markets.
| Mandelbaum
suggests the need for a powerful articulation
of the global role of nonprofits in balancing
the effects of the free market. |
Michael
Mandelbaum provides a compelling backdrop to this
trend in his new book, The Ideas That Conquered
the World: Peace, Democracy, and Free Markets in the
Twenty-first Century. He argues that a set of
three ideas has come to dominate the world today:
peace as the preferred basis for relations between
and among nations; democracy as the optimal way to
organize political life; and free markets as the best
way for countries to grow from poverty to prosperity.
Although this Wilsonian perspective is hardly new,
Mandelbaum’s book cogently demonstrates how powerfully
these ideas have come to dominate international affairs
and deftly illuminates their influence on the geopolitical
and economic framework within which all Western institutions
operate.
A professor of American foreign policy at the Johns
Hopkins School of Advanced International Studies and
a senior fellow of the Council on Foreign Relations,
Mandelbaum provides a superb conceptual backdrop for
nonprofit institutions as they think about their strategic
situations on both a global and a local level. In
particular, it is helpful for nonprofit institutions
to keep these central ideas in mind as “givens”
in charting their futures. Further, though Mandelbaum
does not discuss it explicitly, the increasingly pervasive
global influence of the free market has profound implications
for the role, character and significance of the nonprofit
sector. Mandelbaum provides a thoughtful and thoughtprovoking
analysis of political and economic theory over the
past two centuries and the connection between free
trade and the spread of prosperity. He also illuminates
how influential the power of example has been in establishing
the potency of these ideas and gives a series of warnings
about possible future conflicts. He sees the terrorist
attacks of September 11th and the war on terrorism
as aberrations in the midst of otherwise positive
global trends already in play and he seeks to explain
why much of the world is less peaceful despite the
trend away from war among the great powers.
His book suggests the need for a powerful articulation
of the global role of nonprofits in balancing the
effects and implications of the free market. The “independent”
sector—and the leading institutions within that
sector—are uniquely situated to understand and
analyze the free market. Without vigorous leadership
by the nonprofit sector, there is considerable danger
that the benefits and scope of free markets could
be compromised in both developed and developing nations.
By the same token, the nonprofit sector must be alert
to the dangers of rampant globalization that leave
the disadvantaged and the underprivileged even further
behind. And the growing “privatization”
of the nonprofit sector also has important longer-term
implications.
One
can quarrel with some of his views about “hot
spots” in the world today and the impact of alternative
courses of action by the United States, which he maintains
bears the greatest responsibility for protecting and
promoting these central ideas. But his depiction of
the free market as an increasingly powerful force
that holds the key to a peaceful and democratic future
is compelling and convincing.
Pioneering
Portfolio Management: An Unconventional Approach to
Institutional Investment
by David F. Swensen, with a Foreword by Charles D.
Ellis
The Free Press, 2000. 364+xvi pp., $35.00
Managing investments is one of the chief duties of
boards. Yet, until recently, there have been few,
if any, reference works with analytic solidity and
a clear, approachable style. The nonprofit sector
can be grateful to David F. Swensen, chief investment
officer for Yale University for the past 17 years,
for sharing his insights about successful portfolio
management.
| Swenson's
volume is important reading for anyone who has
responsibility for, or is involved with, investments
and endowments. |
Pioneering
Portfolio Management: An Unconventional Approach to
Institutional Investment is important reading
for anyone who has responsibility for, or is involved
with, investments and endowments both large and small—including
trustees and board members, chief executive officers
and staff—for Swensen lays out how any institution
can generate, over time and with discipline, a successful
investment program.
Acknowledged
as a leader in his field, Swensen has compiled a remarkable
record of investment performance. Concentrating on
alternative asset classes rather than domestic marketable
securities (hence “an unconventional approach”),
Swensen’s focus on a range of less efficiently
priced investment alternatives has produced a stellar
17% annualized rate of return for Yale since 1985,
putting it in the top 1% of all institutional funds.
Yale’s endowment was slightly higher than $1
billion upon his arrival from Wall Street; it was
over $10.5 billion as of June 30, 2002. And during
the past two years of rapidly declining capital markets,
the value of Yale’s endowment increased 4%.
Swensen begins by discussing the fundamental purposes
of endowments for educational institutions, suggesting
that they allow greater institutional independence,
provide operational stability and facilitate the achievement
of educational excellence. He then turns to examining
the goals for institutional portfolios, discussing
the role of spending policies, purchasing power evaluation,
spending sustainability, portfolio evaluation and
the impact of gifts, observing
that such goals supply an essential foundation for
the process of funds management. He completes
his description of the fundamentals by describing
the role of asset allocation—the key decision
regarding the distribution of a portfolio among different
types of investment alternatives.
Swensen’s discussion of the management of a successful
investment program is masterful. He presents situations
where “real-world frictions” can impede
the realization of portfolio objectives; gives a primer
on asset class management; outlines a number of performance
evaluation issues; and lays out his views on how to
structure an effective decision-making process.
What makes Swensen’s volume a classic is the
clarity and accessibility with which he explains
highly complex and often technical matters. He is
equally cogent in laying out the philosophical foundation
for successful investment management and the fundamentals
as he is in explaining strategic and tactical aspects
of portfolio management. A wealth of concrete examples
illustrate larger questions of investment goals and
concepts, the impact of alternative courses of action
that particular institutions have followed and narrower
operational and management issues. Swensen’s
volume is important reading for anyone who has responsibility
for, or is involved with, investments and endowments.
“If we’re going to prioritize, we’re
going to need some priorities.”
<<
Return to main Strategy
Matters
page
|
