Case for Preserving Downturn Capacity

In the economic downturns of 1984, in Australia I had some valuable lessons in business. Back then with a colleague, we were charged by the Company that employed us, with an onerous task of keeping alive an ailing business unit, hit hard by the market downturn. In the face of this adversity, we had clear instructions to protect the ongoing business capacity. This was also at a time when others chose a path to rationalize idle capacity burdens on cash and balance sheets.

 

Our company which was well managed, had a dual growth strategy for both organic and acquisition. So we took a stand for the efficient survival strategy of maintaining as viable our operational capacity. In late 1983 it had acquired a profitable stand-alone business that had a poor fit and unprofitable downstream products business that had made it predator vulnerable to us. Our plan was to strip out the ailing product and merge it with and existing business unit in the group. Adding the synergy business to give it economies of scale made good sense, but by now this too was suffering, but mostly due to its growth being stifled by the economy short-circuiting conditions.

 

With our merger rebranding done, our work then began on the rationalizing the bad business. By unbundling products uplifts of prices on marginal and loss business was an option. This also had the immediate impact to first reduce the loss burden on uplifted customers who stayed and cull poor customers unwilling to pay more. The cull meant a quite high revenue loss. But it converted many of the branch bottom lines to profit and all products had gross profits in the black. And surprisingly over time, a lot of the culled customers came back as the market was barren of sustainable cheap deals of that had been financed by foolishly by bundling cross subsidies in the past.

 

At the time I recall estimating that if the downturn stabilized we could also see our operating capability would be viable. But that was not the end of it as the market was still falling relentlessly as we had to fight even harder to keep it all a float. For this we set about a program of cost minimization and efficiency programs aimed at more streamlined product delivery.  An improved customer service plan made a huge difference and new business efforts were also doubled to protect erosion of market share on our existing customer base.

 

For our planning and analysis needs the mainframe services available were too slow to setup for what we needed and we knew proper analysis of our business information, albeit by hand, was the only way to make our decisions and avoid and otherwise certain failure.

 

Being accountable to our Public Company Board on this high profile effort also required decision transparency. Thankfully we also understood well that using seat of the pants cowboy management that could work in good times would mean certain failure now.

 

Around that time we were very fortunate that the personal computer had just became available; As did the spreadsheet. A quick one day how to use it lesson gave us vital and timely end user power we needed. I even bought for home and hooked up a modem for my first online sortie to collect our bureau services information.

 

What followed over the next year was a tug of war on resources and priorities as we stuck with our plan. For control we were still in the dark ages on the information highway as it was not yet invented, as we know it today. But we still managed to set up an efficient and transparent reporting with crude business intelligence systems for effective decision support and planning activity. We did this across the country using mostly decentralized paper based processes. In the branches we had key performance data rung through and compiled centrally each week with detail collated and analyzed on daily basis and sent in via Telex and FAX. General ledgers and payrolls were run on bureau services making possible only a few days after the month close this to make the crucial confirmation that our weekly results and operating decisions were on track.

 

With everyone involved as a team, we become highly motivated to get in early each day fight the commercial hard times of business then. We had to suffer the deprivation of long hours for less reward, but with a plan and feedback system it made it so much easier.  At times, I admit, we did feel like it could have been easier to take the hit and just close it down, when it got worse before it got better.  At least then everyone would have a redundancy package to ride it all out.  But looking back now it did not seem that bad and it was worth it.

 

The initial 6 month mandate and window we worked to for pending recovery did not come for over a year as we cycled our strategy again by merging business to and from other organic brands.

 

In the end the strategy proved successful as the turnaround began more than a year later. But we had retained our capability and could to take up the slack with a highly efficient operation and network, as business growth returned.

 

As an aside I am proud to be able to say in that time as we moved things around to stay vital we managed to retain all our key resources and facilities with one exception, being one of our best sales guys who took a package and went on to become Captain and Coach of the Brisbane Lions Football club.

 

Business is now more investment driven with risk and core captivity of business operations and supply chains much flatter and customer centric. Non-core services too, are already cut to the bone and delivered on shared services or outsource models.  Labour markets too are quite different to 1980’s. But regardless of how the business is organized and controlled, knowledge skills, relationships and culture are still the imperatives that bind to create a business delivery capability. And that takes significant investment get and keep.

 

In downturn strategies and no less or even today with fluid business and ease of global shifts, a lifeline philosophy for survival is needed. Identifying and taking hard decisions to protect mission critical ongoing capability to deliver should really thought through well to find a way. Conversely short sighted expediency will mostly likely see difficulties instead of helping to achieve a goal and business will cease.

 

In over 35 years in business with plenty of scars from downturns and recession, I have noted that “when capacity goes out of the supply chain, general recovery gets longer as this deepens”. The 2008 tumble is shaping as one of the worst we have seen.  So it may be take some time to come out of this. Best practice is preserving as much capacity as you can and ride it out to put money back in the bank when turns.

What we read in Jan 2009.

Happy Chinese New Year

With the new year underway on January 1 this month we also heralded in the Year of the OX and Chinese New Year, which began on 26th of January. In China, where it is also called “Spring Festival”,  it celebrates the beginning of the spring planting season. The changing date each year is dependant on the Chinese calendar invented in 2637 B.C.by Emperor Huangdi. For at least a week ahead of the celebrations that last another two weeks, people clean up their houses to sweep away bad luck of the previous year.  It is usually a good time to ask for any money owed.

Check out what we read in Jan 2009

A Guiding Hand Over My Shoulder

Someone this week send me a link to an end user authoring software tool. This seems to have caught attention of many as a very useful training and support tool that shadows live workflow driven and other applications.

The tool produces support media to give over shoulder help that users often need. What seems good is the tool is  designed to be interactive and follow user’s steps to get the job done all while users are working in their application.

On the video the first 2 minutes gives an overview about the the company then it differentiates the software’s process concepts and its approach to embedded learning.

The heart of the message starts at the 4:21 minutes mark and runs for about 7 minutes Iy is worth listening through. But you also get the point well after a minute or so. This live demo uses a Microsoft CRM user in a case example to shows how the media helps users to get their job done.  The remaining 10 minutes (22 in total) present detail authoring set-up steps. After a minute or so some may find this segannt  less interesting and bookmark it for later.

It bears closer look as one of those “well done software tools” that developers, trainers, help desk support functions and users themselves should have.I can imagine this embedded learning functionality will soon start appearing as an embedded feature in many workflow driven applications.

The tool is called “SHO Guide “. Check it out  http://www.transcensus.com/pages/tour/guide/

Google Searches Impact Environment

Google Searches Impact Environment

It seems Google is to blame for all our climate wows. On Monday, January 12, 2009 a Fox News report Google operates huge data centers around the world that consume a great deal of power according to Alex Wissner-Gross, a Harvard University physicist.

Read News Article >>

Don’t upset your computer

Did you know your computer can hear you. Like most image_thumb3of us it functions better in a calm environment and underperforms if you upset it.

In an interesting video post Timo Elliot show us what happens when you yell at your computer

View Video Post and check out Timo’s BI questions Blog >>

What happened to the money?

This is a useful post and ongoing debate spawned by image_thumb1Jack M. Guttentag The Mortgage Professor post. In it he describes how the overcooked home mortgage market failures from 2006 triggered financial system collapsed in late 2008 and how the bail out money was relevant to trying to stem the tide of the full blown recession we now face.

Read article >>

BI Predictions for 2009

In Timo’s Elliott January post The definitive list of business intelligence predictions, makes interesting read.

In this he asserts “Cloud Computing” will cause a shift in the Business Intelligence balance of power from IT to business users, as Software as a Service  picks up in the mid-market and BI moves into the cloud  The IT industry’s expansion to “the cloud” will accelerate and by 2010, 20% of organizations will have an industry-specific analytic application delivered via Software as a Service  as a standard component of their BI portfolio with Cloud computing will impact decision management.

Read Full Post >>

Gauging the Gauge

image3Shaun Rogers in a “B-eye netwok blog added a twitter poll to gage expectations on Business Intelligence technology. It interesting he separates “Cloud” and “Software as as Service” in his poll.  You can add you vote:

Interesting too is the tool he used, a freely available widget that I can imagine will proliferate to web sites like ours and company intranets seeking to survey and get feedback on issues. Check it out, it includes the embedding code example which I used to post to the html in this blog. and believe me is is easy once you grab the idea and I am no Techo.

Check out Shaun’s blog>>

Solving Energy Problems

Do you get the feeling you have seen it all before.  Steam and Electric energy or transport. Nuclear solutions for industry and solar for domestic are all options.  All are proven as choices but none has ever succeeded to solve the issues.

Michael North, professor of organic chemistry at image_thumb16Newcastle University, says people don’t seem to realize that a large percent of everything that comes out of an oil well also drives the chemical industry He adds “Not only are we facing a fuel crisis, but the entire chemical industry is likely to cease to exist.”

But now for the first time it seems we may have a breakthrough as the very heart of the issue in C02.

I was interesting I found this find this when I researched uses stored C02. I read the US government had made a $300 Million Loan in January for a carbon storage project to limit C02 release into atmosphere.

Believe it or not hydrocarbon regeneration as viable option is not new. What is is finding a n efficient process to recycle and make renewable captured coal fired energy emissions to turn C02 in them into fuel.

Read How Startup Turns CO2 Into Fuel >>

“Vista” for those who love to hate it.

An article in the New York times, Published by DAVID POGUE on January 21, 2009 say what may others mutter daily. Me included, But it seems there is hope ..

Pogue says

“For an operating system that took five years to create, Windows Vista’s reputation went down in flames amazingly quickly. Not since Microsoft Bob has anything from the software giant drawn so much contempt and derision. Not every company lives to see the day when its customers beg, plead and sign petitions to bring back the previous version of its flagship product.

In his New Your Times piece headed “Hate Vista? You May Like the Fix”Pogue foes on to talk about Window 7 which is now in beta will overcome much of the pain.

David also has a video this too. It is an easy way to get the message and quite entertaining too.

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It is down the page a bit from this great cartoon

Check it out>>

Cargo Cult Provides Jobs

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A question posted in a network blog this week by Charles Caro, Founder – Community Commerce Centers Initiative , asks: 

How would you compare the job search process with a cargo cult?

I looked it up and a “cargo” cult it seems is focused on obtaining the material wealth from more advanced cultures through magical thinking.

Caro’s cargo cult explanation. summarized here, sets up his question:

Cargo cult” activity during World War II occurred when Japanese then later Allied air forces used Islands scattered across the Pacific Ocean. The local populations had little knowledge of the outside world, and saw the arrivals and their equipment as magical. After they had gone the local populations used a form of sympathetic magic in an attempt to bring more cargo to the islands.

The Islanders felt that replicating the planes and moving pieces of paper around, in a special way on a table, would cause more cargo to arrive from the sky.

Caro, then parallels this to the job seeking market and then asks those involved in the business of “helping” people with their “job search”, “What makes your brand of sympathetic magic work?”.Caro’s cynicism is supported well by David Marshall, a Singapore freelance and now semi retired Legal consultant and regular insightful respondent. His follow up was this great one liner:  “The idea of valuable employees falling from the sky at random is delightful”.

Both authors are well worth a read

 Post Script: For those further interested in anthropology, and the evolutionally studies of mankind. I found this interesting video. It  suggests that a strong practicing cargo cult culture still exists in the mountains near Port Moresby in New Guinea.

Maybe they run a Job Search agency too Charles?

Can Dashboards see hidden Icebergs?

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Climate change is an accepted fact, as are measured temperature increases over the last 50 years that are causing it. And C02 emission is well understood to be causing the planet overheating, with potential to destroy life as we know it. Energy depletion is a issue too, so cutting C02 by reducing energy is clearly a good thing if only for that reason.

As facts the understanding seems irrefutable. But is it possible there are flaws in the information intelligence that drives them?

This graphic oddly is against popular expectations telling us polar ice has actually increased so surely this must be a fake.

I am not saying one way or the other but if you are sailing you should watch your dashboard to be careful not to also hit an iceberg.

Understanding what put measures on the board in the first place, is important. But also is being alert to question and challenge is what good Business intelligence is about. So we need to be open to the unusual.

So when you get some information that challenges conventional thinking. It may be flawed. but don’t just ignore it.

Climate Management Reporting Award

Today I was delighted to see Anthony Watt’s post on receiving Best Science Blog in the 2008 Weblog awards for his blog at  Wattsupwiththat.com.

 

Like so many (millions per day now) I follow this blog with great interest. Aside from the great information it provides on science, weather, climate change and related technology,  I am constantly inspired by the fact based rigor of his succinct analytical writings and many of the contributing discussion debaters.

 

His transparent informed approach augers so well for balancing opinion and decision making, which to be sure is why his site is so popular.  His approach to deliver it so successfully, in this highly visible and challenging world of blogging, is a lesson for us all on how to communicate to make decisions by using information well.

I also suspect his resource now supports many changes to improve climate based management processes in the world. And it is almost certainly used for related environment decisions in business the political arenas.

In reading some of the congratulatory comments on his post today I noted this light hearted contribution from Aussie John who wrote:

It was April and the Aboriginals in a remote part of Northern Australia asked their new elder if the coming winter was going to be cold or mild. Since he was an elder in a modern community he had never been taught the old secrets.

‘How can you be so sure?’ the elder asked. The weatherman replied, ‘Our satellites have reported that the Aboriginals in the north are collecting firewood like crazy, and that’s always a sure sign.’

When he looked at the sky he couldn’t tell what the winter was going to be like. Nevertheless, to be on the safe side, he told his tribe that the winter was indeed going to be cold and that the members of the tribe should collect firewood to be prepared.

But being a practical leader, after several days he had an idea. He walked out to the telephone booth on the highway, called the Bureau of Meteorology and asked, ‘Is the coming winter in this area going to be cold?’

The meteorologist responded, ‘It looks like this winter is going to be quite cold.’ So the elder went back to his people and told them to collect even more wood in order to be prepared.

A week later he called the Bureau of Meteorology again. ‘Does it still look like it is going to be a very cold winter?’
The meteorologist again replied, ‘Yes, it’s going to be a very cold winter.’ The elder again went back to his community and ordered them to collect every scrap of firewood they could find.

Two weeks later the elder called the Bureau again. ‘Are you absolutely sure that the winter is going to be very cold?’ he asked.’ Absolutely,’ the man replied. ‘It’s looking more and more like it is going to be one of the coldest winters ever.’

Another comment followed Aussie John,  pointing out there is no winter in the north of Australia.

All jokes aside, this re-enforces the points we all  try to make about adding the “Intelligence Process” as the key for making information of value.

Congratulations Anthony.

 

What we read in Dec 08

Happy New Year for 2009.

This is my first post for 2009 year after a good break. My resolution this year is to do my bit for energy conservation by increasing my own. By just losing some kilograms and getting fit hopefully that will reduce some of my ware and tear on the planets resources and cut the need for at least one larger seat on planes.

In 2009 I also plan to discontinue reading newspapers for information. In 2008 I found it hard to get balanced view of what is happening.  Global warming debate and the exploding financial crisis topped the list for December and it looks like the fact based but unhelpful financial news will be ongoing in 2009. But cynical views aside I have great respect for journalist who try to sort out and report facts. The problem is they as they see smoke it usually means fire so I guess the papers must stay. But this year I do want to find some positive albeit small way to contribute to resolving these big issues.

Check out what we read in December 2008

Blog of the 2008 Year Awards.

clip_image002Technically the awards are being decided January but we have been reading the contributors pieces in 2008. In the category of Best Science Blog if you want a good read on climate change and related nature issues have a look at “Watts Up With That” site run by Anthony Watt a blogger and meteorologist. This fascinating conversation site that claims to be a commentary on puzzling things in life, nature, science, weather, climate change, technology, and recent news.

This site is a true discussion site that many can emulate with. In it Anthony Watt is modest and balanced with his communication style and now sometimes sees over 6 million hits a week and comments on each of his and his hosted daily blogs sometimes by the hundreds.

Check out all categories >>

Poznan Conference.

Of great interest we followed The United Nations Climate Change Conference in Pozna? Poland on 1-12 December 2008 This was aimed to cement the Kyoto Protocol’s and having definitive a carbon neutral objective with emission reduction agreement in Copenhagen in 2009 including reducing global emissions from deforestation and forest degradation and disaster management.

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Read full Article including list of Adopted Decisions >>

It was interesting that I again watched the 2005 Al Gore movie, ‘An Inconvenient Truth’  high listed on a plane movies in December 2008. (2 min Trailer) Regardless of subject conviction to the debate technically it superb learning exercise to see how to presnt to win a case for change. In this movie Al Gore uses his superb selling and debating skills backed up by excellent credible research to present the compelling case to clean up the planet. At the Poznan formum  he  continued this vigal and presented  the conference with more support for the case to enforcing tough new goals and with ideas for creating more momentum now and to achieve the critcal agreement on the tough emmsion and action objectives being discussed for Copehagen conference in late 20o9.

See video >>

On the flip side

Interesting that All gore presents over 50 years of trending, but this year scientific evidence is mounting that extremes of cold temperatures in the Northern hemisphere in 2009 winter ignpost opposite views. This evidence puts forward information to show  ice cover was actually increasing in some parts and is not in decline. Does this mean the Kyoto initiatives are working and we are seeing reveral of the trends.  Or is is the simply that the warmng hypothesisis is flswed?

If nothing else this highly cricial debate is highly emotional by nature.

Polar sea ice changes -net-coolingeffecton climate >>

Is it Global Cooling Now?

Of great interest also is a post named Four scientists: Global Warming Out, Global Cooling InThe author, Alan Lammey, Texas Energy Analyst, of Houston, cites noted William Gray an authoritative climate change speaker and Colorado State University’s, founder of the school’s famed hurricane research team. Gray spoke about multi-decade periods of warming and cooling and how global climate flux has been the norm for as long as there have been records.

Gray has taken quite a bit of political heat for insistence that global warming is not a man-made condition. Man-made carbon dioxide (CO2) is negligible, he said, compared to the amount of CO2 Mother Nature makes and disposes of each day or century.

My view is watch the share market and business reactions as this debate grows:

Read full Post >>

Yellow pages goes global.

The .COM .BIZ EDU, are all identifiers of types of domains, The advent of the .TEL could see a change in the way we see all these with an overarching web identity that could herald the joining of all addresses both physical and virtual in a giant yellow pages across the globe.

In clip_image006his December 3 piece blogger Aaron Brazell comments on the advent of this new identity carrier.  Read his Post >>

My view is to watch this space as we see more and more integrated connectivity in business.

Aaron is the founder and lead editor of Technosailor.com. He is a business and social media consultant and loves to see people reach their potential through the use of social media.

He says there overlap between useful social media and personal and corporate outreach and brand. I am not sure what all that means but he writes thought leading articles so I suggest you check him out at

Check out http://technosailor.com >>

Downturn Capacity Preservation.

In the downturns of 1983 in Australia with my colleagues in business we had some adamant advice that we should protect our capacity to do business. As others chose a path rationalize close and reduce maintaining idle capacity burden to preserve cash, our stand for an efficiency survival strategy proved highly successful as turnaround came a year or so later and we had ability for rapid business growth from that wisdom.

I believe redundancy a survival approach should really thought thruwellgiven it mostly adds difficulties instead of helping to achieve a goal  —

This is an excerpt for a January post by Gordon Wood.

Here is a useful article by Bay Jordan on this subject The author of “Lean Organisations Need Fat People” his posted can be found on Sue Massey’s blog businessmanagementabcs.com

This post debates well 5 solid questions on this subject:

  1. Do you really know who you are laying off?
  2. Have you really examined your commercial logic?
  3. Have you thought through the long-term implications?
  4. Have you really thought through the impact on morale?
  5. Have you thought about the wider economic implications?

In this article Bay also puts forward a proposition that provides:

  1. A means of valuing people as assets
  2. A method of creating employee ownership at virtually no cost to either the company or the individual.
  3. A new method of incentive remuneration that overcomes most of the inherent weaknesses of traditional performance related pay schemes.

Read Bay’s Full Article >>

Time Machines.

This is a time server vendor symmetricom.comhas some interring information about time. We received there flyer in our email this month and picked out these articles of interest.

Another Leap Second Is On The Way: Are You Ready? Since 1972 when the practice was first mandated by the International Earth Rotation and Reference System Service (IERS) 24 leap seconds have been added to the world’s official time.

Read Their Article>>

The Ingenious History of time keeping devices Keeping track of time across a 24-hour period as we do today has its roots going back more than 4,000 years. Since that time, mankind has employed many varied and clever devices to keep track of the time of day and the time of night.

The current system of time measurement dates all the way back to c. 2000 BC. That’s when the Egyptians divided the day into two 12-hour periods and used the shadows cast by large obelisks to track the movement of the Sun.

Today, atomic clocks are used to calibrate other clocks as well as to maintain the proper time on earth. When compared to the obelisks used to tell time in 2000 BC, we sure have come a long way.

More to come

During December we were reading a lot and learning how to leverage value and writing for our followers. We also updated our look and have plans for more to be better.

The is so much more we have read but time limits us. Doing the summaries is enriching but also costly in time as our effort is all gratus. But we still hope we can do better this year.

It is interesting last month as our pieces generally focused on business yet our reading log seems to be focused on life fundamentals rather than the way to manage them.

Our aim as always is for best practices management so work place and business performance improvements can makethe world a better place to live. Understanding life issues and markets and what drives them, we believe is key to achieving that.

Please feel free to comment on piece or overall as part of our objective for healthy debate.