Month: March 2014

Why restructuring often fails.

The PPT guys advice plans to manage volatility through layers and reviewers i.e. countering complexity with complexity…more inspectors, multiple reviewers. The result is a “higher cost structure, an artificial sense of risk management, and insulating people(employees) from the heat of the market.

In 80% of cases, one common solution by Suit Guys will be “Cost Cutting” and firing people. Companies often end up cutting R&D as it occupies lot of resources or shifting R&D to low cost locations.That is the worst mistake to make. R&D is brain of any organization and helps in survival in toughest of times. The return on good mind is far far far higher than any other function in the company.

One area often ignored is big marketing spend. Often the expenses are disguised as brand building . I have been repeatedly saying that marketing cash can only make “Sand Castles” and not “Brand Castles”.

For Big Companies, the opposite has to be done i.e.simplification strategy, a goal of cutting overheads and increasing efficiency across the board.

If a company has high percentage of people doing the job of Postman without value add (which often is the case with bloated organizations), its demise is certain.

Companies who fail to learn from history are bound to repeat it .

Cost of Business

 

BusinessRnD Spending PercentageSpend on RnD

 

~~Inspiration from Jeff Immelt and Others..!

Some thoughts on Population and World. From A. Andros

Japan’s predicament stems from belief that demography is a private matter. Abortion and birth-control are easily available in Japan, as with most industrialized societies, and Japanese society is in a slow-motion collapse. The top-heavy gray population will be a terrible burden to the smaller young cohort and it, in turn, will burden its own (smaller) succeeding generation.

Household formation must plummet. There is little to reason to invest in industry because (the export market excepted) future demand will drop. Revenues will drop as the tax-paying population dwindles. Each private decision (e.g. abortion) in isolation harms no one (but the unborn baby.) Collectively, the social results are devastating.
I always wonder at remarks such as “There are too many people in the world” or “Over-population is the greater danger.” On what are these assertions founded?

 

Image

In business, some years ago, I traveled extensively in the Plains States and Mississippi Valley and was in one dying prairie town after the next. The mantra, heard over and over, was “We have to find a way to keep our young from leaving — our town is dying.” A reduced population did not bring back the passenger pigeons or the buffalo herds. It certain did not bring back prosperity. The results were boarded up stores, scant Main Street traffic, shuttered schools and an aging housing stock. In short– despair.

Some of these same towns are now encouraging what they first shunned: immigrants. I have seen town after town on the Plains renewed by Hispanics who relocate and take minimum wage positions at meat-packing or other industries. These same Latino(a)s buy and fix-up houses, send their children to the schools, pay property taxes to support the schools and shop in the Ma and Pa stores where one parks inward toward the curb and not alongside it (the real marker of small town America.) In some Midwestern states, I believe MN is one, an “exotic” Somali population is fueling economic revival.

But, it is not just the small towns. The mayor of Detroit now wishes to “import” 750,000 immigrants to fuel that town’s prosperity. He could hardly do better. Manhattan is full to bursting — one has to walk sideways down some sidewalks in the evening — but property values are sky-high and the cultural life of the City is phenomenal.
In short, people equal prosperity. A dearth of population equals poverty. This is so widely proven by the experience of municipalities from East Horsecollar, Nebraska to the Upper West Side that one must conclude that only environmentalists, with their decadent romanticism, believe otherwise. Or, do the merchants in the town where the reader lives say each day, “Gosh, I wish I had fewer customers!”

Japan is on its way out. Greece and Italy are next. Demography is clearly not just a personal matter. It concerns all of society. Feminism is a slogan — it is not a practical philosophy for economic prosperity.

Japan Pension:

Japan Pension System 2

From a personal standpoint, I do not really care. I am elderly and grew up in the booming baby boom world (although I predate the Boomers) and so did well from a thriving, people-filled economy. For those who come after me — well, just ask the Japanese.

– See more at: http://www.economist.com/blogs/banyan/2014/03/japans-demography#comments

The value of Foreign Language

While travelling in Sofea he sees this riduculously beautiful girl at a bar. He walks up, says hello. She turns, nods and smiles.

“How are you?”

“Es tut mir leid. Ich spreche kein Englisch.”

“Ach so. Aber ein bischen Deutsch, ich spreche…”

The next morning, he looks over to the other side of the bed and decides the ROI on German is indeed, as Mastercard says, priceless. 🙂

 

Mobile OEMs hitting a high wall..!

Android_OEMs

 

One doesn’t have to be an Einstein to know what is happening in Mobile Industry. It is in many respects similar to what PC industry went through.

Today, Everyone has access to same HW + OS, thanks to democratization by Qualcomm,Bcom,MTK and Google. More than Basic App package is part of OS which satisfies 70% of customer needs. Rest are available as “free downloads” from market places. In Nutshell, It is a very level playing field for everyone small or big, new or old.

With Operator’s relevance going down, entry for new player is relatively easier. OPEN Market share is increasing every year against OPERATOR closed markets.

Absolute ZERO innovation from Network Operators have made them redundant in today’s  device (or Ecosystem’s ?) discussions. They are sitting on sidelines and chewing bandwidth revenues. Some half cooked attempts failed miserably (e.g. Joyn). Their say in product is decreasing day by day. Still it is not late for Operators to realize that they have no business to be in Device Business. They should focus on services on their networks.

Back to OEMs, their fate will be no different if they fail to innovate here. The one with best value offering will eat other’s lunch over time. Those basking in false glory of brand will have unpleasant shocks. I seriously doubt there is much brand loyalty in this market except “High End” bracket. Everything under the “High End” is OPEN market which only values “VALUE”.

But, how can OEM’s differentiate (Innovate) ?? I wish I knew the answer..But, here are few things i will try aggressively.

1) Appcessories == Application + Accessory. Opportunities are endless. Practically every electrical/electronic small device can be converted to Appcessory with nice interface Mobile App. Imagine Security Cameras, Small Health devices, Sensors gadgets etc.

2) Enterprise Services. Samsung Knox is good example. This is open space..If OEMs dont move fast and partner with existing players, those geeks in startup colonies will very soon eat this lunch as well.

3) Productivity Increase: Anything else which increases Productivity: A very good example in early days is Dual Sim phones. Another good example i think is Note series of Samsung with Spen.

4) B2C Services:  No one has done it better than Apple. Apple has used the devices as digital agents in customer’s hands which are used to deliver all kinds of services. This is a fantastic and sustainable business model.  No other OEM is even close.

5) Design:  Apple has shown in the past that even in mature products, if design limits are pushed, it can create a whole new product. I think this is another area where we should see lot of action in coming days.  Imagine a phone which with material/color/shape customized for each customer.

In Tech product or service category, it is very important to do things right and fast. Work-In-Progress quality is brand destroyer and leaves market with bad tastes.

It will be very interesting to see the reshuffle in Top5/Top10 by value and volume next year.

Comments welcome ..!