Prestigious license plate numbers are all the rage in Abu Dhabi per a July 1st Wall St Journal article.
“Earlier this year, Abu Dhabi businessman Saeed Khouri made headlines and the Guinness Book of World Records when he paid $14 million for the tag (car license plate) sporting a ‘1′”.
Innovation is a good thing. Usually.
In the case of the LZR swimsuit made by Speedo, we’re seeing great innovation that needs to be reigned in. For those unfamiliar with the LZR, it is for lack of a better description “spandex on crack”. Swimmers wear it and it contours their body and does all sort of other crazy things that ultimately makes swimmers more aerodynamic and faster. Here’s a picture for the curious.
Since the LZR’s release, 41 world records have been set and 37 of the swimmers setting them were wearing the LZR. Hmmm…I think me sees a trend.
So first of all, I must tip my hat to Speedo who I always thought of as the makers of ill-fitting banana hammocks for coming up with this technological marvel. I must also say that I think the Olympics organizers should ban the LZR from the Olympics (I know they don’t care what I have to say but I’ll put it out there anyways)
As Italian swim coach Albert Castagnetti has commented, the LZR is basically “technological doping” and he is right. The Olympics are about human skill, talent, perseverance, etc. With the LZR, two swimmers of the same exact caliber (impossible I know but indulge me) would have different times because one has the LZR. The LZR is not cheap and so those who can afford it are advantaged. Ultimately, the LZR is a performance enhancing swimsuit so like doping, it shouldn’t be allowed.
Enough on that topic.
But while on the Olympics and performance enhancement, lets talk about the prosthetic wearing runner who was disqualified from running. Per the Engadget blog from earlier this year,
“Oscar Pistorius, a double-amputee sprinter, has been denied a shot at the Olympics… for being too fast. The runner — who uses carbon-fiber, prosthetic feet — was reviewed by the International Association of Athletics Federations (or IAAF), a review which found the combination of man and machine to be too much for its purely human competitors. According to the IAAF report, the “mechanical advantage of the blade in relation to the healthy ankle joint of an able bodied athlete is higher than 30-percent.” Additionally, Pistorius uses 25-percent less energy than average runners due to the artificial limbs, therefore giving him an unfair advantage on the track… or so they say.”
We’re on a slippery slope with the Olympics. Here are some enhancements I expect to see by the 2020 Summer Games.
OK. Well, I never thought Speedos and proshetic limbs would make it into my Brilliont blog, but there is a first for everything. I’m off for a swim.
We do lots of work around innovation and one of the things we do is keep on top of what is going on out in the marketplace especially amongst new, innovative startup companies. To this end, we have created a database of 6000+ innovative companies to ensure we’re on top of the latest & greatest technologies, business models and ideas. The database grows basically daily and our knowledge of what is going on out there grows with it.
Oftentimes, our understanding of these innovative companies leads us to venture capitalists who provide the fuel (aka money) for these young companies to take shape and grow. In recent work on green companies, I came across an article on Vinod Khosla of Kleiner Perkins fame and now on his own with Khosla Ventures and his outlook on the green movement.
Khosla has created a presentation entitled “Mostly Convenient Truths From a Technology Optimist” and in this, he states that global warming is “a technology crisis, not a resource crisis” and that solutions to large problems require “a dash of greed.”
While we may not wish to admit it, Khosla is entirely right when we think about what will make green efforts successful. Except for a notable and loud contingent of folks, many people are not going to go green unless their greed is satiated. By greed, I don’t mean necessarily mean monetary greed although if going green will help people earn more or save money, that will help in adoption. It could also be greed for their time (make things simpler so I save time or save effort).
Ultimately, Mr. Khosla hits on a very human sentiment which is “what is in it for me?” He is using this to drive his own investments forward in various green tech areas. Overall, efforts that are grounded in this idea of enlightened self-interest will do the best. Whether it is for VCs like Khosla or for companies who wish to be more green or for individuals aiming to go green, self-interest will save the day. For companies, being green in a way that impacts and benefits your bottom line will be much more sustainable and impactful than much of the public relations efforts tagged as green that we are seeing these days.
IT represents half of all capital spending and exceeds $500 billion annually. So as CFO Magazine highlights “When times get tight, executives turn to their companies’ IT budgets and get out their red pencils.” And although this sentiment seems to get expressed every couple of years, people still continue to crib about the lack of useful data around IT expenditures.
The problem is that IT budgets are rarely understood and often do not contain all the right information. We’ve seen firsthand many instances where organizations only think about the money out of the door this year with regards to IT and they fail to consider maintenance, support, labor and other expenses. And those expenses are no joke - they create a long tail for many IT projects.
And as the CFO Magazine article entitled “Less Bleeding, More Edge” notes “Companies are now concluding that in order to control costs, they must better understand them.” (note: This statement has been nominated for the master of the obvious award)
The article states that “gauging the return on investment of specific projects is an exercise fraught with peril” as if to excuse this practice of not requiring IT investments to have solid business cases. Unfortunately, this is a refrain heard all too often and is a cop out. Rigorous business cases coupled with the threat of projects being killed or not funded would get at the total cost of ownership and also force project sponsors to understand and articulate the benefits and ROI of their projects and not allow them to hide behind scare tactics (”If we don’t do this, there will be a security risk” or “If we fail to do this, the reliability of XX could be impacted”) .
Unfortunately, most business case building exercises are bureaucratic romps that people go through to tick a box. As a result, the soundness of the business case and its costs and ROI gets little real examination and projects that have no business being funded get funded.
Unfortunately, in the current climate, knee-jerk actions will be taken that will ask for cuts to IT spend. These steps which may provide a short-term benefit do nothing for the long-term. Organizations need to focus on getting the right data about IT initiatives and then be willing to kill poorly articulated or underperforming projects if we ever want to stop hearing about ‘out of control IT spending.’
Multiple choice question.
Times are tough and your organization is feeling the pinch. What should you do?
1 and 2 are pretty conventional and strikingly ineffective and/or signs of poor management. 4 makes a lot of sense. And surprisingly 3 is becoming an increasingly popular option for corporations to call when they need some help. Scary, huh?
As Newsweek reports, “When business people need a crystal ball, they turn to consultant Laura Day, the ‘intuitionist’.” So I’m not sure what an intuitionist is. It’s probably similar to calling a magician an illusionist, but given the hokey image of psychics, the rebranding makes sense. It does scare me that “psychic advisers are crossing over into the world of business” as Newsweek reports.
Has it really come to this? What happened to old fashioned good management, e.g., picking the right places to allocate resources, hiring the best people, eliminating unproductive complexity, etc? Guess we can add psychics to the list of corporate elixirs.
For those who are interested, Brilliont has just started a Tarot Card reading service that helps you determine which businesses and products you should invest in based on input from the spirits. Contact us if interested.
I’ve previously written about the underwhelming success rates of multi-year projects whether they are managed by governments or the private sector (for example - Boeing’s well publicized snafus with their Dreamliner project). This week, another multi-year project mess was highlighted that hits closer to home (literally and figuratively) and I’m talking about the World Trade Center rebuilding.
According to reports, the rebuilding of the WTC won’t be done until the middle of the next decade and will cost as much as $3 billion more than initially planned. My wife and I live in Manhattan’s Financial District so personally, this is disappointing as the revitalization that would have accompanied the new WTC site would be great for the area. Moreover, as someone who was at the WTC on 9/11, it would be nice if the memorial to the many victims was completed at least by the 10 year anniversary of the event.
But alas, as with virtually all other multi-year projects, the fate of this high profile project seems no different. I fear the delays and budget overruns will only increase over time. Despite the work of numerous smart people (and from the looks of it some not so smart ones as well), a likely army of project managers and the pressure of a city and country on the project planners to get this done, it seems nothing can save these gargantuan projects.
In virtually every post on multi year projects I’ve ever written, I always close asking people to provide me an example of one multi-year project that has gone well. By gone well, I mean the project delivered on time and on budget. I’ve yet to ever hear from anyone about such a project. Despite all that is written about multi-year projects, is the success rate really zero percent. Let’s hope not.
In the meantime, we’ll continue to wait and hope that the WTC site rebuilding is not delayed further.
It’s an unfortunate reality that complex business challenges never have simple solutions. Oftentimes, however, the more difficult solutions that get at the root cause can have negative short-term consequences and/or take time to deliver results. And so the simple solutions often win favor, e.g., reorganization or restructuring, but as many studies and analyses have demonstrated, these rarely deliver long-term benefits.
And so it was nice to read about Vikram Pandit’s recent declaration to change Citi’s bonus plans. This is refreshing in that Pandit is attacking a problem at its root cause and not through some illusory steps. Pandit is hoping to encourage folks within Citi to refer business to other portions of the organization, but instead of talking about the need to do this, Pandit has astutely recognized that “people do what you pay them to do”. As a result, he’s changing compensation to drive the behavior he is seeking.
It’s a simple point seemingly but generally organizations won’t attack the problem as Pandit is doing because “a change to Citi’s compensation structure could face internal resistance” as the Financial Times reported yesterday. Undoubtedly, changing compensation may not make everyone happy, but incentivizing certain behaviors can only occur with material changes such as those that Pandit is envisioning - not superficial ones.
If he can successfully revamp the bonus structure, it will be a step in the right direction and one that will likely have positive long-term implications for Citi and the performance of its many business segments.
Emerson Electric is a darn big company. It has 140,000 employees and $22.5 billion in annual sales coming from 60 business units. They had a goal for these units that a third of sales should come from products released in the last 5 years, but according to BusinessWeek, there going a step further by segmenting their new product sales a bit more into the following 4 categories:
There is nothing very revolutionary about Emerson’s approach except that they’ve actually done it. Many organizations talk about disruptive vs incremental innovation and will say they don’t do enough disruptive ’stuff’. What is great about Emerson is that they’ve put a metric around innovation which their business units must aspire to - 1/3 of revenue from products in the last five years.
Their added detail around how they’ll categorize this innovation allows them to manage their innovation efforts as a portfolio. For example, we’re doing lots in the minor improvements category but not spending enough on bigger risk, higher reward new to the world products. By doing this, they can adapt their resource allocation decisions in a way that provides a balance amongst their innovation efforts and provides a more thoughtful way to achieve their 1/3 of revenue from new products goal.
Even without this nuanced look at innovation, Emerson’s willingness to put a hard metric against innovation in their unit goals is commendable.
So I just finished reading the Wall Street Journal Report on their All Things Digital Conference which features interviews with Steve Ballmer, Bill Gates, Rupert Murdoch, Jerry Yang, Sue Decker, Tom Rogers (Tivo), Melinda Gates, etc. Jeff Bezos was also interviewed and as I’ve noted many times in my blog, the guy just has the right outlook on innovation, management, etc. There is some talk that I may have a “man crush” on him and A.G. Lafley of P&G with which I disagree. (more on that below)
In any case, the conference website has some pretty interesting stuff so I wanted to include a link to their site for all to check out - All Things Digital.
Back to the man crush comment. According to Urban Dictionary, a man crush for those who don’t know is defined as follows ” A man having extreme admiration for another man, as though he wants to be him.” This maybe overreaching a bit (don’t want to be either Bezos or Lafley) but the admiration point is pretty on point.
One of the 7.5 Sins of Portfolio Management is that your portfolio management effort cannot be a tunnel but must be a funnel. By that, we mean that projects must get killed as part of your portfolio management effort to give it some teeth. This could mean killing projects at the proposal stage or shedding underperforming projects along the way. If you don’t do this, you’ve just created bureaucracy (checklists, business cases, etc) but you are really not changing investment and project selection processes and the behavior that goes along with them. If you really want to create useless work in your organization, there are probably other ways to do this. If, on the other hand, you genuinely think that there is no project in your organization that should be stopped or that should not have been started in the first place, then we should talk as I have some real estate in Florida which is expected to go up 100% this year which I’d like to sell you.
Given this sin, it’s nice to see a company living by this mantra especially in the area of R&D. One notable example is HP Labs where Prith Banerjee, the new labs director, is planning to unveil a list of 20-30 major projects down from the 150 or so currently being pursued.
According to Business Week, “The labs’ $150 million annual budget will remain the same, but he’ll group the most promising related projects while dropping those with little shot at a profitable payoff.”
Banerjee himself asserts that “Just because it’s scientifically interesting won’t do it. We need to create whole new business opportunities for HP.” He is also forcing researchers to compete for money by pitching projects and writing business plans and then having those goto a central review board that will approve ideas and track progress.
It sounds like HP Labs’ is avoiding many of the 7.5 deadly sins namely:
It sounds like HP Labs is onto the right path. There will inevitably be culture change and resistance that emerges from such an overhaul, but if they can work through these impediments (not easy), HP will go a long way in making each R&D dollar go further.
