Musings from Strategic Leverage Partners

Thoughts for Those Thinking About Consulting

Thanks to the Erdman Center for hosting a session on Friday for those MBA students with an interest in consulting.  Here are the three articles I referenced.

1.  Maister, David H., Advice to a Young Professional

Maister is the guru of analyzing and consulting to professional services firms.  He has several excellent books, including True Professionalism and Managing the Professional Services Firm.  Much of the key content is all on his own blog which is excellent and his current mode of contributing to the body of knowledge.

2.  Schein, Edgar, The Case for Effective Organizational Intervention

Schein is the guru of organizational culture and leadership.  Here is a summary of this basic framework.  Download edgar_schein_process_consultation.doc  The full article is avaiable from MIT Sloan Management Review.

3.  Adizes, Dr. Ichak, Why Consultant Recommendations Don't Work

Adizes also has a number of excellent articles on his website.  His work on corporate lifecycles, is also very applicable to a consultant's work.  He talks about the age of the organization being based on the balance of flexibility and control.  Highly flexible young organizations and extremely control oriented mature organizations.  There is always a struggle between the two, a careful balance is the art of being in "PRIME" which he considers the optimal phase.

Students must use Fountain Pen

An interesting article about a Scottish private elementary school which requires the children to do their work with a fountain pen.  I hope they have a uniform with blue or black shirts to go along with it.

Build a Life Not a Resume

I have the great pleasure of sitting next to the "interns desk" in our office space shared with Capital Valuation Group.  I learn what is on the mind of smart articulate and mature 20-22 year olds.  These are cream of the crop kids from the UW Business School finance program. (BBA).

Recently there has been a thread of discussion on "what do I want to do with the rest of my life".  Tim is heading off to Chicago as an associate in Investment Banking at RW Baird.  Paul is headed to T Rowe Price in Baltimore.  Both have thought a lot about how this fits into the big picture of life, know why they want to do it, and what their career might look like 5 years down the road.

They know they can find meaningful work just about anywhere, get paid well for what they do, and start off with a very good starting salary.  However, what I heard was that this was all secondary.  More important was a) How can I make a difference by doing meaningful work; b) maintain a reasonable work life balance; c) be challenged and have flexibility/options as my career progresses and I learn more; d) be recognized for my work, enjoy my co-workers and surroundings, and be treated respectfully as a peer.  A very informed and matures perspective.  In fact, both made trade offs based upon their view of how closely potential employers met these criteria.

We spent a couple of hours last night talking about where they are headed.  I was able to recollect and tell stories of my first few years out of undergrad at Amoco's Finance & Accounting group.  I see a huge challenge for many traditional environments to provide the kind of opportunity these top notch grads are looking for.

The end result was providing them with some career management type of articles which I reference below.  I think they are some of the few consciously thinking about this now, and I give them great credit.  (I did some of this work and thinking myself at this age - but more by accident I think).  Here are the resources for all to use.

One of the best was this Bain article Build a Life Not a Resume
The Road to Self-Renewal by John Gardner here and here and here.
Are You Deciding on Purpose an interview with Richard Leider.
Career Anchors by Edgar Schein.

Thanks Tim and Paul, Ryan, Brian, Jake, and others for educating me on what's on the mind of our future organizational talent.  I'm looking forward to hearing of your success in life as well as your career.

What is Wrong in College Sports

This is what is wrong in college sports.  I am not sure of the total fallout from this event.

The lack of coaching staff intervening early, the attitude on the sidelines afterwords, and the long list of events prior.   ESPN comments here.  I think there should be very serious sanctions, more far reaching than a game or two suspension.

What is Shallala's stance on all this.  And Barry Alverez was considered as a candidate before Coker? or after? 

Crappy People vs. Crappy Systems

Crappy Systems will trump good people anytime.

Bob Sutton has an excellent blog entry.  His book "Hard Facts" is also excellent.

Berbee Acquired by CDW

Berbee here in Madison was acquired by CDW (A Chicago based $6.2B public company which primarily resells hardware and software).  It has been reported on here and here and here. 

This is very exciting as Jim Berbee and Paul Shain are both solid Madison-ites who have been generous with their time and philanthropy.  Perhaps this will lead to further technology (or not) related companies that will benefit from this event.

Quarter Pounder with Cheese in a Cup

Check out the four page summary in this newsletter.  A venti caffe' mocha from Starbucks has 490 calories and 16 grams of fat.  A bannana coconut frappuccino has 550 calories and a STAGGERING 81 grams (think 20 teaspoons) of sugar.

I like black, sometimes cream, and occassionaly a cappuccino or macchiato.

HP's Patricia Dunn

This Financial Times article got it right.  How can we settle for her stepping down in January.  The issue needs to be investigated, the board cleaned up, and Mark Hurd to be allowed to do the important job of running the company.  Why settle for less?

Rules for Successful Organization

Another excellent post from David Maister on guidelines for building a successful multi-dimensional service firm.  Struture is just one component to organization.  He sets out a number of rules that help any structure be successful. 

700,000 Ebay Employees

I found this number astonishing.  700,000 people report Ebay as being their primary or secondary source of income.  30 Million items sold daily.

The article is a very good explanation of "the Long Tail".  In our niche world, there is an initial interest/upswing in sales - then, if you're lucky, a long tail of sails long afterwards.  As an example, the best selling album of all time - Eagle's "Greatest Hits, 1971-1975".  29 million copies since 1976.

Here is a quote from the article by John Cassidy in this weeks New Yorker.

The forces behind the long tail are largely technological: cheap computer hardware, which reduces the cost of making and storing information products; ubiquitous broadband, which cuts the cost of distribution; and elaborate “filters,” such as search engines, blogs, and online reviews, which help to match supply and demand. “Think of each of these three forces as representing a new set of opportunities in the emerging Long Tail marketplace,” Anderson suggests. “The democratized tools of production are leading to a huge increase in the number of producers. Hyperefficient digital economies are leading to new markets and marketplaces. And finally, the ability to tap the distributed intelligence of millions of consumers to match people with the stuff that suits them best is leading to the rise of all sorts of new recommendation and marketing methods, essentially serving as the new tastemakers.”

How do you capture the long-tail in your business?  And make it profitable?

Professional Service Firms don't support the Apprenticeship Model

This is an excellent entry in an outstanding Blog.  Maister is the expert on professional service firms.  This identifies something I've seen happen in nearly all firms.  Read on.

The Promise of Ethanol

As much as anyone, I wish there was an effective and available solution for foreign oil.  Our "quick fix" cultural mentality fueled by the media is bewildering to me.  I am also struck by a large number of people who aren't aware of facts on both the optimistic and pessimistic side.

This opinion piece provided a good context I wish was more widely understood. 

First, one gallon of ethanol doesn't elminate one gallon of gasoline.  It is more like 1/5 to 1/3 of a gallon.  Secondly, ethanol is subsidized and with current technology using corn, is an expenseive replacement ($120 barrel).

All of this can change.  There is a lot of focus and attention being paid.  This is good and has the potential of replacing 10-20% of our fuel with new methods and alternative celluose sources.

It is not THE solution, but a good option.

Quote from today's WSJ Opinion Column...

President Bush has made the welcome point that the U.S. needs "to move beyond a petroleum-based economy," and has lent his support to the need to develop energy from biomass, which refers to all bulk plant material. This is popular with the public and also enjoys significant support in Congress. Unfortunately, congressional subsidies for biomass are driven by farm-state politics rather than by a technology-development effort that might offer a practical liquid fuel alternative to oil. Meanwhile, major oil and chemical companies are evaluating biomass and investors are chasing biomass investment opportunities. But how much of this is practicable?

In same catagory is the media's insistence that the oil companies "give back" the excess profits.  Here, everyone deserves an "F" for economic literacy.  See this column.  Oil and gasonline pricing is a highly evolved market mechanism.  I think this is very difficult to "manipulate".

NY Times

In this post it describes how quickly the NY Times has made it to the #1 global news brand.

The New York Times, my hometown paper, is the leading global news brand with an audience of 74 million unique visitors a month. That compares to a circulation of the paper edition of 1.1 million daily and 1.6 million on Sundays.

Online, the NY Times gets 50 times the audience that it gets in paper form. Wow.

They've made it easy - and most of the time "free".

David Maister provides a very direct explanation of the short fall of "pay for performance".  Alfie Kohn and Peter Scholtes also provide a lot of background on why this doesn't work.

Maister is right in line and provides a short, compelling and direct explanation.  In his blog entry he writes:

In assessing a pay scheme, you have to ask whether the system is getting people to do the right things. Most are not. Any time you try to use compensation as an incentive scheme, it will backfire.

The minute you tell a bright person what three things will be rewarded, you give them permission to ignore the ninety-seven other things they should be doing to make the firm work. People do like specificity. Every year people will come to you and ask what three things they have to do to get a good bonus. And every year, you must say: “Gee! I don’t know, and if I knew I certainly wouldn’t tell you.”

You must pay people as well as you can. You must be generous and fair, but you must never reduce the compensation system to a formula based upon a limited number of things. With a formula, you give people the permission to be an ugly human being and no one can do anything about it.

Peter's work follows on Deming's pronouncements and a good summary is here.  Total Quality or Performance Appraisal: Choose one.

Being Positive about New Businesses in the Midwest

Here is nice overview of why we should be patient and optimistic about the VC and long term prospects for the Midwest growth of new ventures.  A nice summary of why the guys on both coasts should just watch out for the good old Midwest .

Lessons from our "Morrie" George Graham

Our great friend and industrial psycologist George Graham is featured in this blog entry from Will Ruck of Versant in Milwaukee.  I can't wait for the 2nd installment.  In the same way, George has provided great insight and commentaries to Bill and I over the past years.

Our Friends in Dubai

 
 
  The United Arab Emirates has caused an uproar by buying a company that runs six U.S. ports. What kind of nation is the UAE?

Read "The Week" Overview here.  $100 billion in construction, 1/5 of the world's cranes, and a place where no one has ever voted.

On Line Personality Profile

What's your personal DNA?  Here's mine. 

A pretty innovative interface, though somewhat simplistic pattern of questions/feedback.

Fourteen S&P 500 CEO's have Univesity of Wisconsin Undergrad Degrees

BusinessWeek reports in this February 27th Article that UW is tied with Harvard for the most CEO's in the S&P 500.  See the attached table for the full list.  Notables include Exxon Mobil's Lee Raymond, Intuit's Stephen Bennett, and Autodesk's Carol Bartz.

Perhaps more impressive is that this group of 14 produced an impressive 97% average return over the past 5 years compared to the  S&P's return of  11%.  Now that's something to write home about. This includes 465% at Rockwell and 393% at Autodesk.

Perhaps there should be a Bucky CEO index fund!  The UW Foundation would have done well to have their investment placed with it's very own CEO's. 

Download uw_ceo.xls

McKinsey on 2006 IT Spending

McKinsey provides an oveview of their recent survey of 77 IT Executives from large companies (revenue > $1B).  The highlights include:

• significantly larger investments in upgrading hardware, optimizing systems, and improving security and reliablity - areas with clear business cases
• on-going process improvements (streamlining operations, outsourcing, technologies to reduce operating costs) resulting in 10% savings
• investments in industry specific ERP extensions - addressing sector specific or competitive issues
• investments in business intelligence and compliance initiatives
• hardware invesments in server consolidation, VOIP, and mobile technologies
• investments in disaster recovery, compliance, and security projects

These issues will closely follow private company attitudes on Technology.  Assuming most have made the large ERP investment, the focus will be on getting more value while paring operating costs to fund new smaller improvement initiatives.

Download mckinsey_it_spending_2006.png

Malcolm Gladwell - Pit Bulls and Profiling

In the current issue of the New Yorker, Malcolm Gladwell drives another point home.

In many cases, vicious dogs are hungry or in need of medical attention. Often, the dogs had a history of aggressive incidents, and, overwhelmingly, dog-bite victims were children (particularly small boys) who were physically vulnerable to attack and may also have unwittingly done things to provoke the dog, like teasing it, or bothering it while it was eating. The strongest connection of all, though, is between the trait of dog viciousness and certain kinds of dog owners. In about a quarter of fatal dog-bite cases, the dog owners were previously involved in illegal fighting. The dogs that bite people are, in many cases, socially isolated because their owners are socially isolated, and they are vicious because they have owners who want a vicious dog. The junk-yard German shepherd—which looks as if it would rip your throat out—and the German-shepherd guide dog are the same breed. But they are not the same dog, because they have owners with different intentions.

A fascinating article that somehow I equate to change in organizations.  We like to make up simple rules based upon some event (like banning all pit bulls) and don't address the system - (following up on the owners abuse of animals, requiring spaying, etc).  Don't we do the same profiling and simple  rule creation in business?

Theory of Business

From Peter Drucker, October 1994:

The root cause of nearly every one of these business crises is not that things are being done poorly. It is not even that the wrong things are being done. Indeed, in most cases, the right things are being done—but fruitlessly. What accounts for this apparent paradox? The assumptions on which the organization has been built and is being run no longer fit reality. These are the assumptions that shape any organization’s behavior, dictate its decisions about what to do and what not to do, and define what the organization considers meaningful results. These assumptions are about markets. They are about identifying customers and competitors, their values and behavior. They are about technology and its dynamics, about a company’s strengths and weaknesses. These assumptions are about what a company gets paid for. They are what I call a company’s theory of the business…

In short, the cause of crisis in the organization's unyielding culture.  This is the work of leadership - creating the environment for success.

Small is the New Big

Seth Godin has it right.  Get small.  Think Big.  In today's business environment, value is created through focus and superb execution.  You don't need all of the trappings of "big business" to be very successful.  Yesterday's news of Disney acquiring Pixar is reminisent of this.  Disney was on top of the animation world.  In fact, one individual left Disney, joined Lucas Films and then Steve Jobs purchased this division from Lucas in 1986 for $10M.  Focus on one thing, leveraging computer capabilities, and you can creat $7.4 billion in value.  Perhaps this chart is worth 1000 words.

Execution: The Un-Idea

We've always thought that the value was in the Execution.  Through the writings of Larry Bossidy, Ram Charan, Jack Welch, and others it has gotten a lot of visability over the past year.

Rosabeth Moss Kanter writes in this Strategy + Business Article:

"Twenty-five years ago, management meant control. Managers put in controls, handed workers specifications, and established formal structures that ensured that people did what they were told. Companies operated alone, rather than being part of partner networks or plugging their people into informal relationships. It was an ineffective way to operate, especially after the information technology revolution took place, and to break out of it, companies needed management ideas. Innovation and intrapreneurship, Total Quality Management, Six Sigma, reengineering, networked organizations — these were all conceptual handles that allowed executives to justify and develop new breakthrough practices.

Today, companies don’t need new ideas in the same way they did 25 years ago (although they still need new business strategies). They’ve been through the paradigm shift. They have sustained tremendous improvement in productivity, effectiveness, and attentiveness to opportunities. That doesn’t mean they’ve been successful; indeed, as they’ve explored new ways of working, we have all learned how hard it is to put these ideas into practice. Executives routinely say that the hardest thing they do is improve people and corporate culture. It’s still much easier to let such matters slip, to neglect them. And in the past few years we’ve seen what happens as a result: Ethical standards, and our ability to groom future leaders, inevitably decline.

That’s why execution, or “making it happen,” is so important. Execution is the un-idea; it means having the mental and organizational flexibility to put new business models into practice, even if they counter what you’re currently doing. That ability is central to running a company right now. So rather than chasing another new management fad, or expecting still another “magic bullet” to come along, companies should focus on execution to effectively use the organizational tools we already have."

GM's CEO Rick Wagoner Comments on Challenges

Wagoner says in this "Guest Opinion" piece:

What is less clear is why things turned sour so fast for GM, as well as for other American auto makers and suppliers. To put it another way, why are so many foreign auto makers and suppliers doing well in the United States, while so many U.S.-based auto companies are not?

Despite public perception, the answer is not that foreign auto makers are more productive or offer better-quality or more fuel-efficient vehicles. In this year's Harbour Report, which measures manufacturing productivity, GM plants took three of the top five spots in North America, including first and second place. In the latest J.D. Power Initial Quality Study, GM's Buick and Cadillac ranked among the top five vehicle brands sold in America, ahead of nameplates like Toyota, Honda, Acura, Nissan, Infiniti and Mercedes-Benz. And GM offers more models that get over 30 miles per gallon (highway) than any other auto maker.

He goes on to state the three fundamental issues facing US Manufacturing are:

• Healthcare costs
• Litigation costs
• Unfair trade practices (pointing out Japenese devaluation of the yen)

While these certainly are issues, perhaps he should quit reading the surveys and begin asking his customers (or better yet, non-customers).  He should get their opinion on VALUE, QUALITY, SERVICE, and STYLING. 

It might be better than one of  Bill Ford's new ideas listed here:

The biggest challenge to Ford's makeover may be the automaker's hide-bound bureaucracy. Bill Ford on Monday announced a new Web-based system that allows employees to submit ideas directly to his senior management team.

"Sometimes our bureaucracy can be ponderous and not always receptive to a different approach," Bill Ford said.

More than just a clearer conduit for communicating ideas to the top, the new Web site forces employees to think their ideas through before submitting them.

It asks employees to classify their ideas as technical innovations, business improvements, operational efficiencies, competitive advantages or ways to improve relations between the company and its workers, suppliers or customers.

The Web site also asks employees to rate the potential impact of their ideas. Are they on par with the sort of innovations that made Ford great? Will they change the lives of consumers? Will they open new markets? Will they lead to industry-firsts or improve Ford's competitive position? Ultimately, employees reach a screen that lets them type in an outline of their proposal or submit a previously prepared document.

"The bureaucracy at any company is a tremendous challenge," Cole said. "You want to shake it to the roots in a period like this. That's what he's saying: 'We're going to change.' "

Organizations and Change

Why Consultant Recommendations Don't Work

by Ichak Adizes

Some key quotes from this article are:

Organizations are like motorboats. Tell me the relative strength of the various engines and I'll tell you which direction the boat is going to take. Regardless of what happens on the deck, no matter how much someone topside screams “Change direction,” the engine — or in the case of an organization, the power structure — determines which direction the boat will take. Most strategic planning initiatives fall victim to entrenched power structures that reject the changes. Their preference is no change.

One of the first things a consultant must do is to relax “the engines,” make them changeable, more flexible. Once that's accomplished, a strategic plan can be developed that determines which direction the boat should take. It's vital to begin not with the strategy but rather with the power structure that enables the strategy.

Most companies do not have a clear picture of their problem. If they did, it's likely they would have found a solution without outside help.

Consultants can play a meaningful role in helping organizations improve. They often bring the best seeds for planting. Unfortunately, the seeds are often planted in frozen land. Consultants should be more like farmers, first assessing the land to see whether it can be productive and can be worked. They should plow the land and fertilize it so the seeds can grow. Some seeds are indigenous to the organization; it already knows how and where to plant them. When it doesn't, it's time to call in a consultant who can work the land and plant seeds that will bear fruit.

Also check out Edgar Schein a very influenctial scholar and consultant.  One of the "fathers' of organizatinal development.  He is the steward of "Process Consultation" and effective way for outside counselors to engage clients.

Organizational Change

Donald Sull has written about organizations trapped in "Active Interia".  He sites Firestone and Poloroid as examples.  It is not that organizations don't know they need to change nor that they just sit on their hands, rather, they fail to take appropriate action.

Margaret Wheatley writes that organizations take a typical top-down, linear, sequential, prescriptive change program.  Then they fail and look for who to blame.  Alternately, she explains we need to look at organizations as living systems and consider how this model would dictate change.

Some part of the system (the system can be anything--an organization, a community, a business unit) notices something It might be in a memo, a chance comment, a news report It chooses to be disturbed by this Chooses' is the operative word here--the freedom to be disturbed belongs to the system. No one ever tells a living system what should disturb it (even though we try all the time).  If it chooses to be disturbed, it takes in the information and circulates it rapidly through its networks As the disturbance circulates, others take it and amplify it.  The information grows, changes, becomes distorted from the original, but all the time it is accumulating more and more meaning. The information may swell to such, importance that the system can’t deal with it in its present state.  Then and only then will the system begin to change.  It is forced, by the sheer meaningfulness of the information, to let go of its present beliefs, structures, patterns, values.  It cannot use its past to make sense of this new information. The system must truly let go, plunging itself into a state of confusion and uncertainty that feels like chaos, a state that always feels terrible.  But having fallen apart, having let go of who it has been, the system now is capable of reorganizing itself to a new mode of being.  It is, finally, open to change.  It begins to reorganize around new interpretations, new meaning.  It recreates itself around new understandings of what’s real and what’s important.  It becomes different because it understands the world differently.  It becomes new because it was forced to let go of the old And like all living systems, paradoxically it has changed because it was the only way it saw to preserve itself.

From: Margaret J. Wheatley, "Brining Life to Organizational Change".

The Power of the Question

Peter Block wrote the book "The Answer to How is Yes" which was a good and interesting read.  In this article, "Large Ideas Expressed in Small Moments" he provides a concise summary of one his main points - to effect change, it is through questions and learning, not coercion or blindly following a grand vision, carefully worded business case, and engagement of top management.

Transformation is as much a shift in consciousness, a shift in feeling, a change in relationship, as it is a shift in thinking and practices.

A good question does make a difference.  He states that a good question has some of these properties:

1. There is no one or clear answer.
2. The question is personal.
3. The question carries the implication of individual accountability.

Read the short two page article for insightful examples.  Make your next meeting a conversation.  Think carefully about the important question(s).

Don't Get Stuck at Your Local Max

Seth Godin has a great blog, but also a great entry on his view of a business (or personal) lifecycle.  We have done a lot of work on our own version of a typical business lifcycle.  Seth add's to that collection.

His conclusion is the best.

"You can't reinvent yourself and your organization until you deal with the fear of point C, and that's hard to do without talking about it. I think the benefit of the Local Max curve is that it makes it easy for you and your team to have the conversation."

More is Less, Less is More

The big three two? I think these two charts are very telling. GM Leads the way with 15 different "brands" and approximately 14 million units.  Toyota, BMW, Nissan, and Honda with 15 different brands between them are the companies with the healthy operating margins.  The article goes on to provide many "truisms" of the auto industry today that are the foundation of the misalignment for the traditional US automakers.  ( I think the idea of the big three being the only US automakers is false). 

The Economist has consistently done and excellent job reporting on the perils of the auto industry.  Some of the quotes from this September 10th article follow:

"This superiority (by Toyota) has been achieved by concentrating on organic growth...Toyota has concentrated solely on improving its own offering, with a relentless focus on efficiency, cost-cutting, and a flood of new variations of successful models brought to market at an increasingly rapid rate."

Creating niches from common platforms is the new way to compete.  In the past, making large numbers of a few models was the way to survive.

Toyota has followed a simple policy: give people cars that don't break and treat customers like royalty. (don't forget The Economist is based in London).

Where does it all end?  What cars are you buying?  At what discount?  Doesn't this speak volumes?  Then again their are the Ford "innovation" ads.  Doesn't seem to be much Ford innovation driving  down my street!

 

The Kalamazoo Promise - Press Release

Anonymous donor's provide up to 100% college tuition for graduates of the Kalamazoo Public Schools.  The Kalamazoo Promise - Press Release.

Wow!  This is a community serious about providing a sustainable difference.

Peter Drucker - The End of an Economic Man

Peter Drucker died on Friday, just shy of his 96th birthday.

I recall my first "discovery" of his work when I first moved to Chicago in 1986.  I was new to Oak Park and decided to visit the public library.  I picked up one of his books and started reading.  Given his style of writing and almost constant historical references, I first thought it was a little stuffy.  Later I recall reading something that fit my current experiences at Amoco.  It wasn't until slightly later when I recall seeing that it had been written in the 1960S 25 plus years prior.  Now I was hooked.  Isn't it ironic that I had a business degree and don't ever recall Drucker being required reading. 

As an example, in The Effective Executive, Chapter 7: Effective Decisions, Drucker wrote:

"A decision is a judgment.  It is a choice between alternatives.  It is rarely a choice between right and wrong.  It is at best a choice between "almost right" and "probably wrong" - but much more a choice between two courses of action neither of which of which is probably more nearly right than the other.

Most books on decision-making tell the reader: "First find the facts."  But executives who make effective decisions know that one does not start with the facts.  One starts with opinions.  These are, of course, nothing bu untested hypotheses and, as such, worthless unless tested against reality.  To determine what is a fact requires first a decision on the criteria of relevance, especially on the appropriate measurement.  This is the hinge of the effective decision, and usually the most controversial part."

Pretty insightful stuff.  His work is filled with similar time tested insights written in plain English.  What a treasure he has left us with. 

I'm sure much more will be written in the intervening weeks.  Here are links to the obituary in the
New York Times and the Washington Post.  His work is cataloged on this link at the Drucker Archives
There is also a great interview from last year on NPR by WBUR at Boston University.

 

Copyright Protection

Lots of talk about Google providing scans of books.  I thought this was an interesting (and valid) comparison.  The music industry should also take note.

On Oct. 19, David Drummond, a Google vice president and general counsel, outlined the company's stance in an e-mail:

"It's no surprise that this idea makes some publishers nervous, even though they can easily remove their books from the program at any time," he wrote. "The history of technology is replete with advances that first met wide opposition, later found wide acceptance, and finally were widely regarded as having been inevitable all along.

"In 1982, for instance, the president of the Motion Picture Association of America famously told a Congressional panel that 'the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.' But Sony, makers of the original Betamax, stood its ground, the Supreme Court ruled that copying a TV show to watch it later was legal, and today videotapes and DVDs produce the lion's share of the film industry's revenue."

Crap Circles

A forward in the current Harvard Business Review carries the provocative title of "Crap Circles".  It boils down to something pretty basic - have integrity in how you display information.  The attached is an example.  Who says you have the right to go from maturity to start-up.  This really isn't how it happens.  This harkens back to the work of Edgar Tufte who has written three books on the effective display of information.  There are so many examples of inappropriate data and graphics.  I find the graphics consistently good in The Economist.

Perhaps the Best Way to Start with RSS

Google seems to be have had many "vaguely right" ideas as of late.  The personalized home page allows you to customize your content - preprogrammed sections - or include your own RSS news sources (blog, online news sources, and the like).  Adding a few book marks gives you a clean place to link quickly to what you want to see daily. Here is what my home page looks like.  I'm also testing out googles gmail service as you'll see in the upper right hand corner.

What is a BLOG & RSS and Why Should I Care?

A blog or weblog is an instant publishing tool to create content on a web page.  It is easy and requires not technical skills.  The page you are looking at is typical of a blog.

RSS or "really simple syndication" is a way to received or distribute content on-line without using email.  An example is here.

Why should I care?  In the form of David Letterman's nightly "Top 10", the reasons are:

10. If you're a "geek" it's fun.
9.   You newest employees live in this world.
8.   There is a stock market opportunity somewhere.
7.   Your Ad Agency should incorporate this into your spend.
6.    It might be helpful at a boring cocktail party.
5.    It is an effective tool to communicate internally or externally.
4.    You might find out what others think about your company/product/service.
3.    You never have enough time to read all of the magazines you get.
2.    It might be easy to find out about your competitors are doing.
1.    If you're "in the know" - by having a blog - others will wonder what else you know!

 

A New (?) Category of Business Application

The Economist always does a nice job with their in-depth quarterly sections.  This quarters "technology" section was particularly interesting. This article on  Product Lifecycle Management  caught my interest.

It reviews what a number of software companies are doing to help manage the massive amounts of data and support the more rapid development of new products.  It really isn't new as it extends the product data management (PDM) functions buried in engineering organizations and the capabilities of CAD in the design areas.

I love their quote - "by its very nature, it change the way people work and interact".  Isn't that the very reason to do it?  Oh, I get it, it's actually hard work for organizations to help effect changes in people's behavior.  I guess that's what we're all about.

What's Coming in Web 2.0

An interesting "mashup" of craigslist.com and google maps is created here.  Another interesting combination (with rich functionality) at Busmonster.

Nobel Prize in Economics - Game Theory

The Nobel Prize - well, actually it isn't the "Nobel Prize". Officialy, it is known as the "Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel."  It is the only Nobel not established in the will of Alfred Nobel, the inventor of dynamite.  It was established in 1968 (Nobel died in 1896) in his honor.

Game Theory was part of my cousework and I learned a great deal more than I anticipated.  Bob Weber.  I was significantly confused in the course - but no more confused than the Bell Labs Software Engineer who once created his answer using three pages of greek symbols most of which I never new existed.  However, it all made sense at the end of the course when Weber said we should forget all of what we learned (we would anyway) and we should consult his one page summary.  I still look at this summary - it is a great overview of what one might need to know about game theory.

Financial Times

His (sic Thomas Schelling) 1960 book, The Strategy of Conflict, highlighted the importance of precommitment, brinkmanship and credible threats as strategic weapons in a tense stand-off between two parties. By limiting your own options, for example, you can make it clear to opponents how you will respond to their actions, whatever they do, thereby increasing the chances the other side will back down. Credible threats could also be made with brinkmanship, gradually increasing the probability of a conflict, Mr Schelling observed, adding that children understood brinkmanship perfectly.

Business Week

Game theory is no doubt wonderful for telling stories. However, it flunks the main test of any scientific theory: The ability to make empirically testable predictions. In most real-life situations, many different outcomes -- from full cooperation to near-disastrous conflict -- are consistent with the game-theory version of rationality.

Mass Customization

I'm looking forward to hear Frank T. Piller speak on Friday afternoon at the UW Business School.  His topic will be "The Future of Mass Customization, Mass Production, and Customer Value Creation".  It is open to the public and will be held from 1:30 - 3:00 in 2120 Grainger Hall.

Here is some related background information.

Frank T Piller in Production Planning & Control "Does Mass Customization Pay"

Mani Agrawal, et al. in McKinsey Quarterly "The False Promise of Mass Customization"

Paul Zipkin in Sloan Management Review "The Limits of Mass Customization"

Lands' End is frequently written up in the literature along with any number of other consumer/fashion examples (Nike, Timbuktu - messenger carrier bags), but where are the strong "business-to-business" models?

Having lived in this question for some period of time at Techline, the very first question that must be answered is "are they willing to pay for it".  A strong economic model (the value side and the cost side) must be understood.  Is the category important enough for the customer to pay attention to it (custom shirts/pants etc, versus off the shelf), is there a distribution channel that can service and be part of the offering, and what are the implications to the manufacturing process (ordering, lead time, production planning, production execution, custom identification of final product, delivery, installation, etc.).  Given all of this, does the cost/benefit still make sense?