October 2006 Archives

Eric E. Olsen, Frank Plaschke, Daniel Stelter have written an excellent paper which is posted on the Boston Consulting Group web site entitled "Spotlight on Growth: The Role of Growth in Achieving Superior Value Creation".

The paper starts with several questions:

1. "How much revenue growth does a company need in order to achieve its aspirations for shareholder value?
2. What is the right tradeoff between that growth and other priorities - for example, improving returns on capital or increasing payout to investors?
3. Does the source of growth matter? Should a company focus on organic growth, acquisitive growth, or both?
4. How does growth affect a company's valuation multiple?
5. What is the right tradeoff between sort-term and long=term growth?
6. How should a company's growth strategy be positioned with its current investors?"

As one would expect from a BCG study, these questions are explored in depth. The articles appendix includes an analysis of companies that have created value via growth.  The answers are surprising.  It is worth a look.

This is a striking assertion.  In the Financial Times today, Francesco Guerrera in New York, Richard Waters in San Francisco and Rebecca Knight in Boston, quote the chairman of Wipro, Azim Premji,as saying:

"...the US faces a more acute skills shortage in information technology than India, blaming failings in America’s education system and restrictive immigration policies."

“There is a scarcity of IT professionals in the US,” Mr Premji told the Financial Times. “Engineering is not growing talent, and that is a cause of concern.”

He said Indian groups would confound expectations of a looming skills shortage in the country and continue to draw on lower-cost, highly trained graduates to retain their technological edge.

Recently the news has been that India would face a shortage of talent, but, India is investing in its educational infrastructure and graduating many more engineers than in the US.  This imbalance will cost the US dearly.

"Bill Gates, Microsoft’s founder, has been warning about the evaporation of interest in computer science at US universities for more than two years.

Jeffrey Immelt, GE’s chief, told a Washington audience in January that the US was on its way to becoming “the massage capital of the world”, with more students graduating in sports sciences than electrical engineering. "

After reading Bob Woodward's "State of Denial" this week, James Baker's proposal seems brilliant.

It looks like the US might be considering a new policy towards Iraq. Separating the country into three separate regions might actually be a step in the right direction:

The Iraq Study Group, co-chaired by James Baker, the former US secretary of state, is preparing to report after next month’s congressional elections amid signs that sectarian violence and attacks on coalition forces are spiralling out of control. The conflict is claiming the lives of 100 civilians a day and bombings have reached record levels.

This shows potential. First. The study is headed by James Baker for whom I have a lot of respect. Second. The Republicans are clearly failing here. Their current strategy seems to be "stay and die" and at least with with this new strategy we have hope.

The commission is considered to represent a last chance for fresh thinking on Iraq, where mass kidnappings are increasing and even the police are suspected of being responsible for a growing number of atrocities.

The invasion of Iraq was a huge political disaster. Bush should be held accountable but at the end of the day we can't leave the region in chaos. Leaving Iraq to fight a civil war would be more evil an act than the Bush administration's fabrication of evidence to justify the invasion in the first place.

At least this way we could give the Kurds, Sunnis, and Shias a fighting chance.

[Kevin Burton's Feed Blog]

Knowledge Management suggests that the knowledge and skills of retiring workers need to be captured and managed.  Now it seems that companies are beginning to
take notice

An aging workforce and an emerging "baby boom" retirement wave are driving more companies toward "strategic workforce planning," The Conference Board reports today in a new study.

"Strategic workforce planning" involves analyzing and forecasting the talent that companies need to execute their business strategy.

This relatively new management process is being used increasingly to help control labor costs, assess talent needs, make informed business decisions such as where to open new facilities or whether it's more cost effective to add full-time employees or contractors, and to assess human-capital needs and risks as part of overall enterprise risk management. Strategic workforce planning is aimed at helping companies make sure they have the right people in the right place at the right time and at the right price.

The new study from The Conference Board, Strategic Workforce Planning: Forecasting Human Capital Needs to Execute Business Strategy, also reports that these other forces are driving strategic workforce planning: current movement and projected labor shortages; globalization; the growing use of contingent, flexible workers; the need to leverage human capital to enhance return; mergers and acquisitions; and the evolution of workplace technology and tools. The study includes detailed case studies of nine organizations. It was conducted on behalf of The Conference Board Strategic Workforce Planning Research Working Group-senior executives in 23 companies.

See full Press Release.

Jonathan Schwarz is the chief executive officer and president of Sun Microsystems.  He writes a weblog that is worth reading: Jonathan's Blog, and in fact, he contributes to his blog much more frequently than other CEOs. 

On September 12, he wrote a comment in the Financial Times entitled "The five founding principles that drive innovation".  Here is a brief summary.  Needless to say, the article is worth reading.

1. Hire the best and let them lead you. Build and encourage a culture of leadership regardless of title or department and ensure there is communication and interaction between leaders of different departments and product groups.
2. Share. Create communities with partners, customers and business groups that allow collaboration and open innovation. After all, this is the “participation age”.
3. Create small groups and give them autonomy. Steering committees do not work. Create task forces with the ability to identify and create projects that matter. Bring in different voices in the brainstorming phase.
4. Allow public debate. Transparency of ideas and debate is always healthy but you have to know when the debate should end. Then move quickly to focus resources towards achieving the goals.
5. Have the courage to make hard decisions. At Sun, this was to invest when others were cutting and to drive increased focus in our engineering operations.

This is absolutely essential advice.  I have found that if you set goals, plan to achieve them, and do the actual work to achieve your goal;  you may not get exactly where you originally intended, but you will have achieved a huge amount.

If you’re not striving for something, you may be stagnating. It’s important to always be setting objectives for yourself, in both your personal and working lives.

Goal setting and planning are not just one shot deals. Just because you’ve set some goals and formulated an action plan to achieve those goals, does not mean it ends there.

Here are some ideas to keep the excitement of constant challenge in your life:

• Once you’ve accomplished all the goals you’ve set, set some more! Don’t just sit there patting yourself on the back; remember the feeling of excitement and fulfillment you received when you achieved your goals and then, start setting some more.

How exciting and interesting can your life possibly be if you allow yourself to run out of challenges?

• Periodically update your plan. The beauty of your plan is that it is written in pen or typed out on your word processor; it is not chiseled into a block of stone, which means one thing: IT CAN CHANGE!!

I recommend reviewing your plan every 3 to 6 months and ask yourself such questions as, “Am I still happy with this?” Or, “Is this goal still important to me? Is it a priority in my life?” If the answer is, “No,” get rid of it! Don’t feel obligated to work toward something just because, at one time, it was important to you. That goal is stopping you from going after what you really want.

People change, our lives and our priorities change. What might have been important a year or two ago, might not be anymore.

Remember, the fun is not just in accomplishing a goal; the real fun is in the journey. What keeps our lives fresh and exciting is to always be going after new challenges. Just keep asking yourself, “What do I really want to accomplish?”

[Greshes Sales Advice]

Stephen Downes describes the differences between groups and networks in this video on google.  I found this on elearnspace.org:

http://www.elearnspace.org/blog/archives/002628.html

Stephen nails it perfectly: "Groups require unity, networks require diversity. Groups require coherence, networks require autonomy. Groups require privacy or segregation, networks require openness. Groups require focus of voice, networks require interaction."

This discussion has significance to knowledge management since groups and networks share information in very different ways.