Swine Flu Updates: How Twitter Makes a Difference (UPDATED)

UPDATED: HealthMap from Google.org and the CDC >>
I have to say I’m not impressed by the swine-flu coverage in the traditional media.
What’s interesting is that one company – Veratect – has done a better job of identifying, elevating, and monitoring this crisis.
Their swine-flu Twitter feed is here. Judge for yourself. >>
Other good sources include the CDC and Google News, and the Flu Wiki
Photos here >>
Background: the politics of health >>

Backlash: How Early Adopters React When the Mass Market Embraces a New Brand


David Reibstein‘s theory holds true online as well. Let’s look at an example of how this works with online communities, knowledge – based communities in particular. Let’s say we build an online community around a specific topic. When the site starts up, we attract the early adopters – some of them thought leaders in their fields. The posts, articles, and debates are generally led by a handful of these thinkers, and they attract a following. The newbies, as they engage with the community start off by learning, asking questions, sometimes just lurking. The quality of these early debates is typically high and participation intense and invigorating.
So what happens when the community suddenly experiences growth – massive numbers of the hoi-pollloi descend on the site and suddenly the quality of discussions takes on a Twitter-like feelstupid and stupider. The old school rebels, first through silence, and second by disengaging. This takeover by the wisdom of the masses can be avoided, through ruthless editorial direction and skilled moderators. And every once in while, the new participants challenge assumptions that deserve to be challenged, and are given their space in the sun.
So how do we manage this growth and stay true to the community’s intent?
Three options come to my mind:
1) Manage membership – simply keep the community at growing in a measured way – firing the “bottom” 10% each year, and bringing in a fresh crop of participants at 20%… This is the surest way to sustainable growth.
2) Create a merit-based aristocacy – with tiered membership based on the value of the participant’s contributions.
3) Create a feeder community which is built for the masses and an elite community for the thought leaders and their followers. Moderate the interaction between these groups with the possibility of upward migration based on peer-based invitations.
You’ll notice I am not advocating open communities where everyone has an equal voice. That’s because I’m not talking about social communities, but communities of practice where respect is reserved for the competent.

The Tata Nano: The Rise of Ascetic Engineering

Is Ratan Tata the re-incarnation of Henry Ford?
Suddenly, innovation takes a front seat in the automotive world. And it happens to be led by an Indian engineering sensibility: frugal enough to do the job. This is the type of value-engineering that shifts the mindset of an entire industry:

13 iPod Nanos = 1 Tata Nano. Which Nano do you want?
Congratulations, Ratan Tata and the Tata Motors team of engineers. Brilliant!

King Hussein Leadership Prize 2008: Bob Freling

Queen Noor today presented the 2008 King Hussein Leadership Prize to my friend Bob Freling, the executive director of the Solar Electric Light Fund (SELF), at the Aspen Institute Energy and Environment Awards in Aspen, Colo.
Past winners of the award include Archbishop Desmond Tutu and Medecins Sans Frontieres (Doctors Without Borders) and Muhammad Yunus, founder and creator of the Grameen Bank.
Bob Freling is one of those people who go about making the world a better place without any fanfare.
Under his quiet leadership, SELF has pioneered innovative applications of solar power such as for drip irrigation in Benin, telemedicine in the Amazon rainforest, vaccine refrigeration in Rwanda, online distance learning in South Africa, and microenterprise development in Nigeria. These successful pilot projects culminated in SELF’s whole-village approach, or Solar Integrated Development model. Since 1990, SELF has completed projects in 18 countries, making it a leader among non-governmental organizations in realizing practical and cost-effective alternative energy solutions for rural villagers.
Congratulations, Bob!
Maybe the folks at the Bill & Melinda Gates Foundation will pay attention to Bob now.
Videos here >>

Cloning Your Milk (Why the FDA is Out to Lunch)

I was stunned to see this ad today:
cloned milk advertisement
At first, I thought it was joke, but then, after seeing this site I wasn’t so sure:
cloned milk company
It seemed like a spoof – note the “Clone Zone” with the “Fun Facts on Cloning.
My hilarity turned sour when I realized they were serious.
Now I’m asking you, do you really believe the FDA when they tell you it’s safe?
Not these crooks.
Obama needs to weed out the Bush appointees, quickly.
Who knows what they’ll approve next? And the worst thing, they aren’t even required to label cloned products.
Let’s hope they’re not cloning mad cows.
And who is Linda?
cloned milk company

Cloud Storage Strategy

The Cloud will change the way you live. Everything as a service: your computing, your desktop, your life.
One of the things I like about my job is I learn about cutting edge stuff, like customer-driven innovation, intuitive intelligence, and now cloud storage strategy.
We launched the cloud storage strategy site a few days ago, and now it’s simply a matter of keeping up with ideas. The Economist for example, in their global entrepreneurship survey, tells us that:
The development of “cloud computing” is giving small outfits yet more opportunity to enjoy the advantages of big organisations with none of the sunk costs. People running small businesses, whether they are in their own offices or in a hotel half-way round the world, can use personal computers or laptops to gain access to sophisticated business services.
Now that’s what we’re talking about!

World of Ends: Another Manifesto from Doc Searls and David Weinberger

The Cluetrain posse continues their journey:
1. The Internet isn’t complicated
2. The Internet isn’t a thing. It’s an agreement.
3. The Internet is stupid.
4. Adding value to the Internet lowers its value.
5. All the Internet’s value grows on its edges.
6. Money moves to the suburbs.
7. The end of the world? Nah, the world of ends.
8. The Internet’s three virtues:
a. No one owns it
b. Everyone can use it
c. Anyone can improve it
9. If the Internet is so simple, why have so many been so boneheaded about it?
10. Some mistakes we can stop making already
Details >>

Pricing in a Recession: Customer Segmentation based on Decision-Making Attributes

Now that we’ve learned that customer segmentation is important on your website, let’s look at customer segmentation and pricing. When companies make sweeping, “across the board” cuts in pricing, they basically shoot themselves in the head. A smarter approach is to segment your customers by understanding their decision-making attributes, and then price accordingly.
Here, Oliver Wyman tells us how “market pricing” is done:
segmentdecisionmaking.gif
On the flip side, I wonder if companies do the same thing with employee pay – i.e. segment their employees based on performance and individualized intrinsic motivations and then give them what encourages them the most.
And of course, it’s not all about money. Unless you’re at AIG.

Masao Nemoto: Is Your Culture Hurting Competitiveness?

A former senior managing director of Toyota Motor Corporation and renowned leader of their famous manufacturing system, Masao Nemoto is known throughout the world as a leader in quality control and process optimization. In a sense, he is one of the principal architects of the “Toyota Way.”
What we learn from Nemoto is far more than quality management. His ideas on leadership have been documented, and reveal the profound knowledge Nemoto infused into the day-to-day operations at Toyota.
One particular aspect of Nemoto’s thinking has been largely ignored by western companies to their own detriment: coordination between business units.
Nemoto insisted on a culture of shared responsibility. Here’s what Nemoto says:
“One of the most important functions of a division manager is to improve coordination between his own division and other divisions. If you cannot handle this task, please go to work for an American company.” (see his 10 leadership principles below)
Nemoto believed that critical tasks could not be left to a single business unit, but rather should be a collective responsibility.
What has this got to do with leadership?
Nemoto’s point of view says that leaders must lead across the company, not just their own fiefdom. It is ironic, to say the least, that the democratization of business happened first not in the West, but in Japan, at companies like Toyota. Or in Brazil, with Semco.
Note: OK, there are a few American companies in this camp as well: Zappos and W. L. Gore & Associates
Nemoto’s thinking went all the down to the individual worker on the assembly line. Everyone speaks, insists Nemoto, not just management. A direct result of this view is the work principle: problems must be solved at the lowest possible level. All employees take responsibility for problem solving, instead of pushing the issue upwards. Every worker in a process can be stop the work flow, without waiting for a supervisor to make the decision. It is this transparency which drives out defects and makes quality job one. Now wasn’t that a slogan we heard somewhere before?
Next time you bring your business unit heads around the conference table, ask yourself: “Are we competing against each other or against the competition?”
For reference, here are Nemoto’s 10 leadership principles:
1. Improvement after improvement. Managers should look continually for ways to improve the work of their employees. Advance is a gradual, incremental process. They should create all atmosphere conducive to improvements by others.
2. Coordinate between divisions. Managers of individual divisions, departments, or subsidiaries must share responsibility. Nemoto offers this advice to his managers:
One of the most important functions of a division manager is to improve coordination between his own division and other divisions. If you cannot handle this task, please go to work for an American company. A corollary of this is that upper management should not assign important
tasks to only one division.
3. Everyone speaks. This rule guides supervisors of quality circles at Toyota, ensuring participation and learning by all members. It has also been generalized to all meetings and the annual planning process. By hearing everyone’s view, upper management can create realistic plans that have the support of those who must implement them–an essential element in quality programs.
4. Do not scold. An alien concept to most managers. At Toyota the policy is for superiors to avoid giving criticism and threatening punitive measures when mistakes are made. This is the only way to ensure that mistakes will be reported immediately and fully so that the root causes (in policies and processes) can be identified and amended. Assigning blame to the reporter clearly discourages reporting of mistakes and makes it harder to find the underlying cause of a mistake, but it is difficult to train managers to take this approach.
5. Make sure others understand your work. An emphasis on teaching and presentation skills is important because of the need for collaboration. At Toyota, managers are expected to develop their presentation skills and to teach associates about their work so that collaborations will be fuller and more effective.
6. Send the best employees out for rotation. Toyota has a rotation policy to
train employees. There is a strong tendency for managers to keep their best employees from rotation. But the company benefits most in the long run by training its best employees.
7. A command without a deadline is not a command. This rule is used to
ensure that managers always give a deadline or schedule for work. Employees are instructed to ignore requests that are not accompanied by a deadline. The rationale is that without a deadline, tasks are far less likely to be completed.
8. Rehearsal is an ideal occasion for training. Managers and supervisors give numerous presentations and reports. In a QC program there are frequent progress reports. Mr. Nemoto encourages managers to focus on the rehearsal of reports and presentations, and to require that they be rehearsed. Rehearsal time is used to teach presentation skills and to explore problems or lack of understanding of the topic. Because it is informal, rehearsal time is better for learning.
9. Inspection is a failure unless top management takes action. The idea
behind this is that management must prescribe specific remedies whenever a problem is observed or reported. Delegating this task (i.e., by saving “shape up” or “do your best to solve this problem”) is ineffective. So is failing to take any action once a problem is defined.
10. Ask subordinates, “What can I do for you?” At Toyota this is called “creating an opportunity to be heard at the top.” In the first year of a quality-control program, managers hold meetings in which employees brief them about progress.
Three rules guide these informal meetings:
1. Do not postpone the meetings or subordinates will think their project is not taken seriously.
2. Listen to the process, not just the results, since QCs focus in on the process.
3. Ask the presenters whether you can do anything for them. If they ask for help, be sure to act on the request.
This philosophy can be generalized. If top management is perceived as willing to help with problems, employees are more optimistic about tackling the problems and will take management’s goals more seriously.
While reading these principles of Nemoto, I couldn’t help but be reminded of good old Deming.

From Drucker to Immelt: Developing Leaders for Tomorrow

Peter Drucker used to say that management development must be dynamic, that is to say it should not aim to replace today’s management, but rather must focus on the future – the “needs of tomorrow,” as he called it.
In this context, Drucker asks us to think about the following:
– What organizations will be needed to attain the objectives of tomorrow?
– What management jobs will that require?
– What qualifications will managers have to have to be equalto the demands of tomorrow?
– What additional skills will they have to acquire?
– What knowledge and ability will they have to possess?

The answer to these questions will help us define your companies future leaders – the men and women who will create your company’s future, the world’s future.
Fast forward to the June 2006 Harvard Business Review. In a revealing interview, General Electric’s Jeffrey Immelt tells Tom Stewart that GE has defined five growth traits for all of GE’s leaders. In their quest to become growth oriented (the target is to sustain an 8% rate of organic growth), Immelt tells us they had to change some of their DNA.
Here are the 5 traits of GE’s growth leaders:
1. External focus
2. Imagination and creativity
3. Clear thinking and decisiveness
4. Inclusiveness
5. Deep domain expertise

As part of the annual HR review at GE, executives are rated green, yellow, or red on each one.
Immelt tells us that everyone has to have at least one red, because the point is not to pick out winners or losers, but rather to show that everyone (Immelt included) is working on one of these areas.
Interestingly, Immelt tells us the area he’s working on is – decisiveness.

Google in the White House? Will Vivek Kundra transform the Federalist CIO Bureaucracy?

The White House announced this morning that Vivek Kundra will be the administration’s Chief Information Officer.
It won’t be easy, since our government IT is basically a patchwork of competing departments (fiefdoms) and vendors (mercenaries) and CIOs (the entrenched aristocracy).
Here’s Kundra talking about his previous position:

Steve Ballmer‘s probably having a fit over at MS right now. Here’s his Howard Dean moment.
So what can we expect from Kundra? Three things to look for:
1) Transparency: of costs and just as important, procurement processes
2) Lower costs: through the use of open apps like Google Apps
3) Virtualization: everything in the cloud…
And who is Obama going to bring in as Chief Technology Officer (CTO)? I’d like to see JSB, but I’m getting this “Google in the White House” feeling, i.e. Eric Schmidt

Globalization and Corporate Taxes

If corporations want to be treated like persons, then they will have to pay their taxes like normal people. That’s just another founding principle in the ongoing war on corporatism.
If I go work overseas, I still have to pay US taxes – as long as I’m a US citizen. So why should the corporations be any different?
The tax experts may question this line of thinking, but let’s remember who pays them.
The Hindu has an article on the issue which seems fair and balanced.
Of course, more and more companies are choosing to move to Dubai, where, under a dicatator, they enjoy more freedoms than here in the US. More on Halliburton and KBR here>>
Who needs democracy when you can have bigger profits instead?
It’s all about the size and share of the pie
Funny thing, Dubai is not weathering the global financial as well as might be expected. Many of these offshore companies will come back or disappear. No bails-outs for them! Good luck Dubai.
For individual tax dodgers, watch the weasels squirm as Swiss bank accounts become more transparent. First Switzerland, then Panama and Singapore.
What’s my point in all this raving? Pretty simple really: businesses and individuals have a responsibility to all their constituents, not just shareholders. And the sooner they wake up to that reality, the sooner they will truly become “good citizens of the world.” It’s capitalism 2.0 versus police state 2.0 – which do you prefer?

Midnight in the Garden of Evil

The idea that deregulation is a good thing is perhaps the most destructive legacy of Bush’s Republican agenda. Here’s are some of the midnight de-regulations the Republicans need to be held accountable for:
– A rule that relaxes enforcement against factory-farm runoff
– A rule that permits more waste from mountaintop mining to be dumped into waterways
– A rule seemingly designed to protect pharmaceutical companies from being held liable for marketing products they know are unsafe
– A rule that makes it more difficult for workers to take advantage of the Family and Medical Leave Act
– A rule that reduces access of Medicaid beneficiaries to services such as dental and vision care
– A rule that could limit women’s access to reproductive health services.
Read all about it in this report from the Center for American Progress (not funded by Exxon or Peabody).
Speaking of Peabody, here’s more on how Peabody is forcing the Navajos off Big Mountain >>
The business lobbyists that have been of the deregulation gravy train are now going to have to deal with transparency and accountability – starting with official sites like recovery.gov, along with netroots activism. The time for crooked corporatism is over.

GlobeSchooling.com: Education Through Travel

When I started my own consulting company back in 2004, my wife and I gradually realized that we didn’t have to keep sitting in Houston for the rest of our lives. We decided that we would travel as a family, visit the places we wanted to learn about, and spend some time in each of these places – learning about the history, geography, literature, culture and, of course, the people. Instead of teaching high school and college kids, my wife would now teach us.
We became globeschoolers: homeschooling on the road. Now we’re in our fifth year of travel. Our base-camp is still Texas, but we get to work, travel, and learn as we go about this country and the world.
My wife’s just started her globeschooling blog, which will explain what we’ve been doing. Really what she’s been doing to educate the kids (and us). I just tag along and learn a few things despite myself!
I’ve been bothering her to get blogging for a while, but apparently it took the Obamas and Earth Wind and Fire, to get her started…

Gary Hamel: Moonlight Madness or Management Moonshots?

Gary Hamel‘s at it again.
This time he’s got 25 moonshots for management:
1. Ensure that management’s work serves a higher purpose. Management, both in theory and practice, must orient itself to the achievement of noble, socially significant goals.
2. Fully embed the ideas of community and citizenship in management systems. There’s a need for processes and practices that reflect the interdependence of all stakeholder groups.
3. Reconstruct management’s philosophical foundations. To build organizations that are more than merely efficient, we will need to draw lessons from such fields as biology and theology, and from such concepts as democracies and markets.
4. Eliminate the pathologies of formal hierarchy. There are advantages to natural hierarchies, where power flows up from the bottom and leaders emerge instead of being appointed.
5. Reduce fear and increase trust. Mistrust and fear are toxic to innovation and engagement and must be wrung out of tomorrow’s management systems.
6. Reinvent the means of control. To transcend the discipline-versus-freedom trade-off, control systems will have to encourage control from within rather than constraints from without.
7. Redefine the work of leadership. The notion of the leader as a heroic decision maker is untenable. Leaders must be recast as social-systems architects who enable innovation and collaboration.
8. Expand and exploit diversity. We must create a management system that values diversity, disagreement, and divergence as much as conformance, consensus, and cohesion.
9. Reinvent strategy-making as an emergent process. In a turbulent world, strategy making must reflect the biological principles of variety, selection, and retention.
10. De-structure and disaggregate the organization. To become more adaptable and innovative, large entities must be disaggregated into smaller, more malleable units.
11. Dramatically reduce the pull of the past. Existing management systems often mindlessly reinforce the status quo. In the future, they must facilitate innovation and change.
12. Share the work of setting direction. To engender commitment, the responsibility for goal setting must be distributed through a process where share of voice is a function of insight, not power.
13. Develop holistic performance measures. Existing performance metrics must be recast, since they give inadequate attention to the critical human capabilities that drive success in the creative economy.
14. Stretch executive time frames and perspectives. Discover alternatives to compensation and reward systems that encourage managers to sacrifice long-term goals for short-term gains.
15. Create a democracy of information. Companies need holographic information systems that equip every employee to act in the interests of the entire enterprise.
16. Empower the renegades and disarm the reactionaries. Management systems must give more power to employees whose emotional equity is invested in the future rather than in the past.
17. Expand the scope of employee autonomy. Management systems must be redesigned to facilitate grassroots initiatives and local experimentation.
18. Create internal markets for ideas, talent, and resources. Markets are better than hierarchies at allocating resources, and companies’ resource allocation processes need to reflect this fact.
19. Depoliticize decision-making. Decision processes must be free of positional biases and should exploit the collective wisdom of the entire organization.
20. Better optimize trade-offs. Management systems tend to force either-or choices. What’s needed are hybrid systems that subtly optimize key trade-offs.
21. Further unleash human imagination. Much is known about what engenders human creativity. This knowledge must be better applied in the design of management systems.
22. Enable communities of passion. To maximize employee engagement, management systems must facilitate the formation of self-defining communities of passion.
23. Retool management for an open world. Value-creating networks often transcend the company’s boundaries and render traditional power-based management tools ineffective. New management tools are needed for building complex ecosystems.
24. Humanize the language and practice of business. Tomorrow’s management systems must give as much credence to such timeless human ideals as beauty, justice and community as they do to the traditional goals of efficiency, advantage, and profit.
25. Retrain managerial minds. Managers’ traditional deductive and analytical skills must be complemented by conceptual and systems-thinking skills.
Fine. I think I get it. The real question is how many of our bail-out CEOs will get this Capitalism 2.0?

Tao 2.0: Stephen Mitchell’s “The Second Book of the Tao”

The Tao that can be blogged is not the eternal Tao. Or is it?
The great thing about working for myself is that I get to work with people (and companies) I like. In this case, I’ve been asked by Penguin Press to promote Stephen Mitchell‘s latest work: The Second Book of the Tao.
Stephen Mitchell is a quiet soul. The last gentleman. He’s definitely not the self-promoting type. So it was with some difficulty that we got him to talk about his first Tao (Tao Te Ching) and his newest masterpiece – The Second Book of the Tao.
The results are on YouTube!
Here Stephen talks about how The Second Book of The Tao came into being:

And here’s an excerpt; Chapter 14 from The Second Book of The Tao:

Here’s a little more about the book, adapted from the Penguin press release:
The Second Book of The Tao is a twenty-first-century form of ancient wisdom, bringing a sequel of the Tao Te Ching into the modern world. Alongside each translated passage, Stephen adds his own insights for contemporary readers.
“His meditations and provocative re-imagining of the original texts comprise a book that is both a companion volume and an anti-manual to the Tao Te Ching. Mitchell renders these ancient teachings at once modern, relevant, and timeless.”
Agreed.
Learn to govern your mind, and the universe will govern itself.
Or, as Funkadelic might say, “Free Your Mind…And Your -ss Will Follow.” (That wasn’t in the Penguin press release)
To appreciate Mitchell’s mind, see StephenMitchellBooks.com >>
And here are some stories about Stephen as told by his wife Byron Katie: here, here and here >>

The Truth about Executive Pay

There’s a line of reasoning being echoed in the Obama administration that if we cap CEO pay for bailed-out companies in the financial markets, the best and brightest will leave, seeking greener pastures with foreign companies which don’t have similar restrictions.
This is false reasoning.
Executive pay must be tied to long-term performance if anything is going to change. Here’s some thinking on the issue from Stephen F. O’Byrne and S. David Young in HBR:
The justification for maintaining pay competitiveness is that it reduces the risk of losing good managers, who could be costly to replace. Corporate boards could also argue that it minimizes the risk of seriously overpaying managers as a consequence of large, windfall gains from surging share prices. In short, the claim is that competitive pay policies not only help lower retention risk but also impose limits on shareholder cost. This is false logic. By causing companies to overpay underperforming managers and underpay star performers, a competitive pay policy will actually increase retention risk. The poor performers stay on and the good ones go. What’s more, it ignores the potential wealth-creating effects of strong financial incentives.
Despite their commitment to competitive pay policies, compensation committees sometimes do act to strengthen incentives by increasing option grant shares after a year of strong stock-price performance or decreasing them after a bad year. On the surface, this appears to be good news. But such moves have little overall impact because directors tend to reverse their actions in the following year. In other words, an option grant that rewards good performance or penalizes poor performance is followed, almost half the time, by a grant that penalizes good performance or rewards poor performance. On balance, therefore, ad hoc adjustments by boards contribute almost nothing to wealth leverage.
If companies are serious about rewarding performance and retaining star performers, they will first have to wean themselves off competitive pay. They should give managers fixed-share interests in stock appreciation and economic profit improvement, thereby increasing the impact of future pay on executive wealth. Perhaps most important, they need to review vesting and holding requirements to prevent managers from unilaterally cashing out share-based pay, which also reduces the sensitivity of their wealth to company value.

Secondly, we know the financial sector is grossly overpaid. Even the Chinese will tell you this. I blogged earlier about China’s Gao Xiqing, president of the China Investment Corporation:
– “If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.
– “I have to say it: you have to do something about pay in the financial system. People in this field have way too much money. And this is not right.”
He’s not mincing words, and neither is the Economist >>
I say let them go. It’s time these executives we came back to Earth. If they want to risk their own money great, but why should we subsidize irresponsible management practices?
I’m with Warren Buffet when he says in this letter:
“CEO perks at one company are quickly copied elsewhere. “All the other kids have one” may seem a thought too juvenile to use as a rationale in the boardroom. But consultants employ precisely this argument, phrased more elegantly of course, when they make recommendations to comp committees.
Irrational and excessive comp practices will not be materially changed by disclosure or by “independent” comp committee members. Indeed, I think it’s likely that the reason I was rejected for service on so many comp committees was that I was regarded as too independent. Compensation reform will only occur if the largest institutional shareholders – it would only take a few – demand a fresh look at the whole system. The consultants’ present drill of deftly selecting “peer” companies to compare with their clients will only perpetuate present excesses.”
No one is saying we should stop paying for performance. What we’re saying is let’s stop rewarding unsustainable business practices and outright fraud.
Where are we going to find low-cost, competent CEOs? That’s a business GE should look into. A CEO-for-Hire profit center. Training grounds? India and China, of course.

Cut Capital Expenditures, Not People

When executives want to boost profitability, their first target is often their “most valuable asset” (ha!) – people. But a better way to find value is to bring increased discipline to the capital budgeting process for small items.
Check out Tom Copeland‘s 2000 article in HBRCutting Costs Without Drawing Blood.
Here’s what he says:
… a company can almost always create far more sustainable value by sensibly reducing its capital expenditures. How? Not by postponing or eliminating big spending projects, which are usually less than 20% of the budget anyway, but by conducting a rigorous, disciplined evaluation of the small-ticket items that usually get rubber-stamped. Those “little” requests often prove to be unnecessary—in some cases they duplicate other requests—or gold plated. But few managers have the time, energy, or inclination to ask about them. They should.
and:
You get more bang for the buck—or perhaps more buck for the bang—by cutting capex dollars than by cutting payroll. According to my estimates, the increased market valuation that resulted from Kodak’s $400 million payroll cuts could have been achieved by a $280 million reduction in capital spending. The reason for the difference, of course, is that a company has to make severance payments—$600 million in Kodak’s case—to people it has laid off. (There is no severance pay for capital.) The table compares recent payroll savings at Kodak and several other corporations with my estimated value-equivalent capex cuts.
Something to think about very, very carefully.

Rosabeth Moss Kanter on Simplicity

Rosabeth Moss Kanter is one of my favorite business gurus, the “female Peter Drucker,” as I tell people when I recommend they read her book Confidence: How Winning Streaks and Losing Streaks Begin and End.
In her latest blog post at HBR, she tells us that the next big trend is simple: to simplify.
Among her observations:
Companies sow the seeds of their own decline in adding too many things — product variations, business units, independent subsidiaries — without integrating them. They create complexity, which makes costs increase faster than the potential gains from the new parts.
“Just why did General Motors need 47 brands of cars? Was that responsible for its top-heavy load of managers? Or for cannibalization within the company?”
and this brilliant line:
When everyone else suffers from over-complexity, there is a market for products and services that simplify life.
More here >>

Business Models for Short Attention Spans

I wrote once on another blog, that no one has time to read Harvard Business Review, or listen to an entire music CD, or watch the whole movie.
Our attention span is somewhere between 3 to 5 minutes. And that’s the size your idea-bite has to be if you’re going get heard at all. See Twitter, YouTube, CNN, et. al. We’re getting dumber second by second by second.
How do you build a business model for short attention spans? I think this is the key challenge for online publications – from newspapers, to blogs, to forums. Perhaps the key is enticing readers to return over and over – let’s say twenty times a day! So online journals must be updated very often (compare HuffPost with the NYTimes) with corresponding micro-blogging on the same topics.
And the revenue will come not for selling ads, but selling products and services. And sometimes, you may just sell them the longer version of your story.

Starting a Business in a Recession

As someone who has started a business in a down economy, I have to say it is not as easy as these articles (see below) make it out to be.
For starters, this is not the time to write a business plan, as some of them would have you do. Instead, focus on finding and keeping customers.
Two, get ready to answer these questions from your customers, er, prospects:
– Who are you?
– What can you do for me?
– Why should I believe you?
– How soon can you make a difference to my bottom line?
Starting a Business in a DownturnBusinessWeek
Strategies: It’s a good time to start a businessUSA Today
How to Start a Business During a RecessioneHow
Starting Up in a Down EconomyInc.
Five reasons why a recession is a good time to start a companyThe Industry Standard
What’s a good business to start now? Something you’re good at, crazy about. Something people call you about to get free advice on. Something you want to do for the rest of your life.
Can’t think of anything yet? Here are some fun new business ideas, 999 of them to be precise…
If you already have an ongoing business, here are some things to do now >>

Brand Promises: What to Do Now

The one thing we all know as branding professionals is the axiomatic statement: “your brand is your promise.” When you start breaking that promise, you lose brand equity.
That’s been the story for so many brands, from Sears to the Republicans.
So what can you do in these turbulent times?
Step one: don’t lie. To yourself, your employees, and most of all to your customers.
Step two: think 80/20: focus on the 20% percent of actions which give you 80% of your returns. In other words, work on your effectiveness. Don’t try to do too many things at once. But focus on your best customers and more importantly, your best employees. Fire the deadwood – beginning with deadwood customers – the ones that cost a lot to service and are just not worth it.
Step three: observe your customers’ pains. How can you help them? Can you show them something they might not have known? Can you help them bring in additional revenues? Pitch in and they’ll never forget you.
Step four: invest in the future. Sure, things look bleak. But now there are more opportunities in your market and if you look closely at your adjacent markets, you should be able to see the opportunities.
Step five: service counts. The better your employees do in face-to-face encounters, the better you’ll weather the storm. Where can your service delivery be redesigned to make it even better.
Step six: be true to your brand. Don’t just start accepting anything you need to do to survive. Focus on customer value, not price competition.
Step seven: customer driven innovation. It’s now or never time. Get an innovator’s mindset.
Step eight: use the Internet like your life depends on it. Because it does. I don’t care what industry you’re in, the Internet will help you reduce your costs – marketing costs, operational costs, employee costs, and, most importantly, it can help you grow.
Step nine: test your ideas. Now is the time for smart business experiments.
The sky is not falling, despite what the papers say. Yes, you might lose your job, but you can find another one. This isn’t Europe. So get busy!

Newsweek: Shrinking to Survive?

Will Newsweek be able to compete against the Economist?
That’s what they’re betting on, apparently.
The goal is to turn Newsweek into an opinion-based “thought leader” with branded journalists like Fareed Zakaria, Christopher Hitchens, and that fossil of a conservative, George Will. So we’ll see lots more trash-talking and provocation.
While this is a step in the right direction, I think they’ll really have to worry about low-cost, online disruptors like HuffPost, DailyKos, and The Week, as well as established institutions like The Atlantic and The New Yorker.
The makeover is supposed to gain them mindshare and, ahem, walletshare. Where have we heard that before?
What they’re missing is a daily view of their ecosystem. I’ll get into that in a separate entry on ecosystemwatch.com. And as I tell my clients, thought-leaders do dominate in ecosystem competition, so the Newsweek strategy does make sense.
What I don’t see any mention of is value-co-creation with its readers. And their revenue model is still based on advertising. Even the Economist knows that to make money you’ve got to sell those country reports, the surveys, books, and conferences.
Finally, I hope they’ve thought about video – online video – as another key ingredient which makes online news attention-worthy.

Hunger and Republican Values

To get a better idea of what it’s like to live on a food stamp budget, CNN’s Sean Callebs decided to eat for a month on $176 and blog about it >>
What is depressing is the rising number of people going hungry in this, the “land of plenty.”
I’m just sick at the Republicans – first they get us in this mess, then they go obstruct everything. Their idea of a stimulus is more tax cuts for their friends who live in the top 2% – otherwise, nix!
The Republican party stands for one thing: lies and more lies. And the corporate media is just as guilty.
More here about what life is like for an increasing number of people on Main Street>>

A Design Guide for Recessionary Times

I think we’ve finally hit the wall in terms of design.
Whether you’re designing a product, a service, or a website, the designer has to make their work relevant to the buyer in ways they may not have considered before this recession. Here’s what I mean. Your offering is no longer competing for attention or even price. It is competing on usefulness and time to value.
The question you have to answer is this: Why will this product/service help me now, and how fast can I see results?
And, two – “How can I justify spending any money on this at all?”
Three: “What’s the risk for me (and my money)?”
Got it?
Pretty simple, but your survival as a company may just depend on answering those three questions properly.
So Hyundai designs a car which says, buy it, use it, and we’ll take it back – if you can’t pay because you lost your job. The policy allows people to return vehicles in the first 12 months if they can’t make payments due to job loss and Hyundai covers depreciation. In essence, Hyundai is eliminating your risk.
Consider a small business in today’s economy. Why would they spend money on anything but the essentials? So who needs MS Office when you can use Google Docs? Who needs a Mac when a netbook will help you get by? Who needs office space when you can work from home? Who needs to fly when you can Skype it in? Who needs to buy when you can rent? It’s not about how much the website costs, rather, it’s about how fast will I make money from the website? Why do press releases when you can blog?
It’s value time, period. Show me, don’t tell me.
One last thing, why should I trust you? Are you trustworthy? Is your product/service trustworthy? Maybe trust goes beyond the product/service. It lies in the concrete actions you take to actually help your customer. Have you ever thought of helping someone out who is not your customer?

Hyper-Disruption: India’s $10 Laptop

Here comes the next wave of hyper-disruption: the $10 laptop.
Are your ready Dell, HP, Apple? Are you ready Microsoft?
As we saw in Getting India and China Right, by Anil Gupta and Haiyan Wang, China and India are not going to be content simply filling out orders for low-cost products. They are also going to be springboards for innovation and disruptive products and services.
When I was growing up in India, there was a rule of thumb we followed which said that anything made in India should sell for 10 times the amount in the West and vice-versa. Looks like that rule still applies!
I’m still somewhat skeptical, but hey, it’s coming. If not tomorrow, then soon.
The point is this: every assumption we have about price limits and barriers needs to be challenged. If we don’t challenge them, Chindia will.

Book Review: “Getting India and China Right” by Anil Gupta and Haiyan Wang

The edge has become the core.
That’s the central idea presented by Anil Gupta and Haiyan Wang in their new book – Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage.
It’s not enough to merely be present in India and China, argue the authors.
Their thesis: “…any Fortune 1000 company that is not busy figuring out how to leverage the rise of China and India to transform the entire company runs a serious risk of not being around as an independent entity within ten to fifteen years…”
China and India are different from all other countries in that they present four “stories” or opportunities rolled into one:
1) Mega Markets: they provide growth opportunities for every product and service
2) Cost Efficiency Platforms: with low wage rates, they can help reduce your global cost structure
3) Innovation Platforms: the talent pool of engineers and scientists can boost your firm’s technical and innovation capabilities
4) Launching Pads for New Global Competitors: your next global competitors are likely to emerge from here
So what are you supposed to do?
The book guides you, chapter by chapter, to explore the following imperatives:
1) Compete in India and China simultaneously. Why? Four reasons: i) the growth trajectory for both countries places them as the world’s top 4 and 5 markets for every product and service imaginable; ii) India and China offer (for the time being) complementary strengths in services and manufacturing respectively; iii) there are also remarkable similarities which help your company transfer learning from China to India and vice-versa, accelerating your success in both countries; and finally, iv) an integrated China and India strategy helps you reduce your political, economic, and intellectual property risks inherent in operating in just India or China.
2) Compete for mega market dominance through micro-customers. The authors show you how to compete at the top, middle and bottom of the pyramid in India and China. What I found especially interesting was the authors’ insistence that innovation opportunities abound at the bottom of the pyramid and that companies should use this segment as a “learning laboratory” for the discovery of new business models!
3) Leverage China and India for global dominance. There are three opportunities: cost arbitrage, intellectual arbitrage, and business model innovation – each of which can help you build a global platform for competitive advantage.
4) Compete with the locals – the dragons and tigers. The authors show you how to defend yourself and compete against the emerging titans in India and China using three key strategic initiatives: i) attack these emerging titans on their own turf; ii) neutralize their supply-chain advantages by tapping into the cost effective and innovation opportunities available in both countries; and iii) pursue an integrated India plus China strategy which, oddly enough, is more difficult for the emerging players in both countries.
5) Compete for local talent. You must project a positive and visible presence in the local media and local academic institutions. You can offer better global career opportunities for employees outside of India and China. Finally, by being sensitive to cultural and social mores, your company can build strong emotional ties to employee families – spouses, and yes, parents! The authors also suggest you hire in second and third tier cities to achieve lower salary scales and reduced turnover rates. (Wuxi is calling!)
6) Rethink what it means to be a global enterprise. The authors give us four areas to rethink – global strategy, innovation, organization, and lastly, our very mindsets. They warn us to stay slightly ahead of the changes in each of these areas, lest we get left behind on the road to global competition.
This is not a light read, but it is an essential one for every manager or leader with global vision. What I haven’t mentioned in this blog post is the detailed case studies and business examples the authors present to make their case.
Ignore the timely warnings and insightful lessons in this book, and chances are we’ll see you on TV asking for a government bailout.
For more info, see Wang’s blog here and this article in the Wall Street Journal>>

Susan Solomon: “Global Warming is Irreversible”

Now what?
Our carbon drain is clogged, and we’re going to drown in our own bathtub.
Here’s the bad news:
“People have imagined that if we stopped emitting carbon dioxide that the climate would go back to normal in 100 years or 200 years. What we’re showing here is that’s not right. It’s essentially an irreversible change that will last for more than a thousand years,” says Susan Solomon on NPR
Are you ready for long droughts and rising seas? While some environmentalists are worried about the extinction of polar bears and emperor penguins, or the dying oceans, I’m thinking about human extinction. As usual, the poor will be hit the hardest.
Poor Al Gore keeps trying to wake us up:

This is a national security issue which makes Al-Qaeda look like the Peanuts.
Meanwhile, the Republicans, led by Rush Limbaugh and Ann Coulter are still on their “global warming is a hoax” bandwagon.

Here Comes the Tech Greenwave: Asus’ Bamboo PC

Asus Bamboo PC
The Asus Bamboo PC is here, supposedly.
Asus is advertising it, even linking to Amazon, where it seems like they’re not quite ready for it.
My cynical side sees this is the latest in the greenwashing movement in the high-tech industry. If they’re serious, however, I applaud them.
Here’s how ASUS puts it:
ASUS has created a strategy dubbed the “4 Green Home Runs” to deliver greener products for the consumer. The “Green Home Runs” are Green Design, Green Manufacturing, Green Procurement and Green Service and Marketing.
OK, let’s do it – a green value-chain! I just hope we don’t learn later that they’re clearing Giant Panda habitat to make PC covers.
Geek info: ASUS U6V-V1-Bamboo 12.1-Inch Laptop (2.53 GHz Intel T9400 Processor, 4 GB RAM, 320 GB Hard Drive, Nvidia 9300M GS Graphics, Vista Business)
BTW, Bamboo is pretty nifty and is definitely one of those “sustainable products for our future.”

BBC Documentary: What Now Mr. President? (Wake Up, Everybody!)

Here’s a documentary from the BBC’s Panorama.
Here’s how they pitch it:
“Barack Obama takes over as US President with a promise to dramatically change America and make it a fairer place. He is inheriting the worst economic crisis in almost a century, and a country so unequal that 23,000 people die every year because they cannot afford basic healthcare. To close the gap between rich and poor Obama will have to take on the might of the corporate world, which wields enormous influence in Washington. Can he change the world’s most powerful country, and should he?”



Question: ever wonder why this kind of a documentary never makes it to US television?
Wake Up, Everybody! Check out Harold Melvin & the Blue Notes: