Does US remain the productivity leader?

The article "Hard times, lean firms" in The Economist here states:

"Far less attention has been paid to the flip side of the jobless recovery: the remarkable improvement in American productivity. How long can this continue? “I see no limit,” says William Hickey, the boss of Sealed Air, a packaging-maker. Is he right to be so optimistic?"

At a high level labor productivity is defined as the output per hour.  But this productivity during the economically difficult times have come as a result of "First, workers are terrified of losing their jobs. This makes it easier to persuade them to put in extra hours or shoulder new tasks. Even in unionised firms, there have been reports of greater flexibility. Workers have been staying on the job longer rather than “featherbedding” their hours by, for example, queuing up early to clock off as soon as the shift ends."

It is difficult to find a global company today where the stress is not high all the way down to the lowest levels.

Interestingly, the CEO of the corporations may find it lonely at the top, but according to Jennifer Lerner on the research team at Harvard which studied middle to high level officials from government, the military, business and nonprofits, states that the executive levels don't feel stressed or much less so than middle management. Read details here.

The Economist article gives a second reason, "... tough times are forcing firms to strain every brain cell to become more efficient."

Can this be sustained,specifically in light of a global push to compete among the emerging countries for the same opportunity? "But all such advantages are temporary. As Mr Hickey points out, a factory that Sealed Air opened in Mexico was expected to be far less productive than one in America, but within four years had caught up."

World's tiniest capacitor

One of my very first jobs out of college was at Murata, a Japanese electronics company I had never heard of.  And then I discovered that its products were in just about every electronics device.

Murata manufactures "Capacitors, which store electricity, are used in just about every type of gadget -- smartphones, laptops, parts for hybrid cars, medical equipment and digital cameras. Smaller components allow for other innovations and improvements, from thinner devices to longer battery life."

"The latest capacitor, measuring 0.25 millimeter by 0.125 millimeter, is as tiny as the period at the end of this sentence."

Imagine the impact on miniaturization of existing consumer products. Right off I can imagine health and medical applications and monitoring embedding electronics solutions for the life of a patient.

Universities: China growing, Russia shrinking

Interesting news from the world of higher education in Asia:

From The China Daily here:  "Figures from the Ministry of Education show that over 290,000 overseas students studied in China in 2011, a 10.3 percent increase since 2010. Among the students, 118,837 of them are studying for a degree, accounting for 40.6 percent of the overall international student population, which has increased 10.62 percent from 2010."




From The Moscow Times here:  "The bill aims to cut the number of higher educational institutions, leaving a smaller cadre of better-funded universities that pack a more powerful punch in international rankings."

Innovation's purpose; to deliver agility and flexibility

Let's assume I am leading a product development effort of an automobile for the US market and it is 2007. My product assumptions are based on data that is probably 12 to 72 months old, one assumption being that oil prices will remain low within the US market. Finally, let's say I am half-way through the development of the product.

How do I now change course when the oil prices have sky rocketed resulting in the fact that the consumer and large corporate customer base I had planned to sell to have decreased by 75% overnight?  See one of my previous blog's showcasing innovation in automotive manufacturing here.

Christensen's Innovator's Dilemma implies that I will do all in my power to keep the project going, to make sure it ends one way or another, and that it looks like a success. Such is the conundrum of 20th century based product development, which is anchored in detailed analysis of the past, and an inability to comprehend the future. Such product development's focus is efficiency and effectiveness. And there are quite a few examples in the market place in the last ten years to prove this consideration that has led to various companies demise or bankruptcy.

The question is how do I become flexible and agile, where my company can make quick turns ahead of the market, and does not make commitments that cause it to be rigid and unable to respond to the customer need.  Further, how do I become such that I show the customer what they need versus the customer asking me?

The solution to this enigma is the definition of innovation for a Global Fortune 1000.  Where in contrast the perfected approaches of product development deliver continuous improvement embedded in efficiency (cheaper, faster, better) and effectiveness (the customer receives the promise of the product).

So, what is the definition of innovation for a global corporation? To solve the Innovator's Dilemma, perhaps Confucious had the answer:

"When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps."

Thiel Fellows - Attempting Breakthroughs

"[The Thiel Fellowship] rewards smart young people for not going to college and, instead, diving into the real world of science, technology and business."

"Since 2010, he has been bankrolling people under the age of 20 who want to find the next big thing — provided that they don’t look for it in a college classroom. His offer is this: $50,000 a year for two years, few questions asked. Just no college, unless a class is helpful for their Thiel projects."

"A cool hundred grand, no strings attached? You won’t be shocked to learn that it is harder to get a Thiel Fellowship than it is to get into Princeton."

I previously wrote about the Milner Prize here which challenges the ethos of the Nobel prize to some extent. Above is an example of the Thiel Fellowship that asks the creative and young to do what they love, if they qualify.  Read further here at New York Times.

Below is a counter point, do you agree?

"Anthony Carnevale, director of the Center on Education and the Workforce at Georgetown University, says that the fellowships themselves are nice, but that the message is destructive. “These very unusual and talented kids are in a very high-powered learning environment,” Mr. Carnevale says. “They’re enormously privileged people who’ve been allowed to develop all their horsepower with no constraints. I think it makes you an odd duck.”"

Creativity and Misfits

"Speaking of internet firms founded in the past decade, Peter Thiel, an early Facebook investor, told the New Yorker that: “The people who run them are sort of autistic.” Yishan Wong, an ex-Facebooker, wrote that Mark Zuckerberg, the founder, has “a touch of Asperger's”, in that “he does not provide much active feedback or confirmation that he is listening to you.” Craig Newmark, the founder of Craigslist, says he finds the symptoms of Asperger's “uncomfortably familiar” when he hears them listed."

Schumpeter's article "In praise of the misfits" in The Economist discusses how the most creative minds in the technology driven sector have shown signs of Asperger's, or dyslexia, or ADD, or etc.  Read details here.

"Entrepreneurs also display a striking number of mental oddities. Julie Login of Cass Business School surveyed a group of entrepreneurs and found that 35% of them said that they suffered from dyslexia, compared with 10% of the population as a whole and 1% of professional managers. Prominent dyslexics include the founders of Ford, General Electric, IBM and IKEA, not to mention more recent successes such as Charles Schwab (the founder of a stockbroker), Richard Branson (the Virgin Group), John Chambers (Cisco) and Steve Jobs (Apple)."

P&G - Higher Accuracy in Decisions Through Analytics

While reading old colleague Franz Dill's blog here, who served as P&G's Chief Scientist of Business Intelligence, I was prompted to collect few of Franz's blog posts to highlight Procter & Gamble's leadership in leveraging analytics to drive accuracy in decisions.

Here is the link to P&G's Business Sphere, "... a visually immersive data environment that transforms decision-making at P&G by harnessing real-time business information from around the globe."

Franz also points to an interview with P&G's CIO Filippo Passerini in Information Week.  Some insightful snippets from the article are:

"The decision cockpit is focused on forward-looking projections rather than historical reporting, with three-month, six-month and 12-month projected trend lines for market share, cost of goods, and margins. All of the data is drillable, meaning you drop down from the companywide views to study performance by country, region, brand, and product."

"With the success of the decision cockpit, P&G has been able to do away with more than 80% of the company's standardized business intelligence reports, according to Passerini. Most users embraced the new approach as more attractive and usable than spreadsheet-based reports sent by email, but in some cases users had to be "forced over the hump" of reliance on the old reports, he said."

"But there's isn't any one significant component of the decision cockpit or Business Sphere environment that came out of a box. It's a first-class, highly customized, and purpose-built system based on P&G's ambitious vision."

I am confident that if P&G is showcasing the Business Sphere this broadly, then it must be onto the next competitive advantage in analytics already.

Read the rest of the details here.

Sugru - Breakthrough Innovation

I believe that breakthrough innovation is and always has been the domain of the entrepreneur and an incumbent has never delivered Schumpeter's Creative Destruction.

Here is an example of a product and its story to prove the point.

Infographic: Industries with Most Innovative Information Technology

This info-graphic was designed by Central Coast Agency.

Energy: Robots for Drilling

"Robotic Drilling Systems AS, a Norwegian company developing a drilling rig that can think for itself, signed an information-sharing agreement with NASA to discover what it might learn from the rover Curiosity."

Oil and gas industry requires a significant amount of human resources to preform a multitude of tasks. A significant number of them are dangerous in execution or are in hazardous environments. Robotics is slowly making its way into this sector.  Read further details at Bloomberg here.

"Apache, the third-largest U.S. independent oil and natural- gas producer by market value, is writing software that will essentially allow the drill bit to think for itself, communicating directly with equipment at the surface that controls speed and direction. Graham Brander, the company’s director of worldwide drilling, sees it working much like a plane on autopilot, flying on its own with a human on standby, ready to assume the controls if necessary. “That’s what I view very much as the automation model for the oil and gas business,” he says."

Here is a blog providing an extrapolation for the future of oil rigs, including 2,000 meter deep underwater cities.

Satellites with nuclear reactors have been functioning successfully in space for close on 40 years, to today a small multi-terrain vehicle of sorts is moving around on a distant planet, to applications of MEMS that quite honestly amaze me at times.  It is not too far off to see the future Apache is envisioning and creating.

US higher education: A bubble?

Since 2006, I have been engaged in US academia from developing and teaching courses to working on acquisition of government grants and private sector funding to creation and commercialization of university IP to improvements in engineering education.

Given my closeness to the subject, I know for a fact that the US higher education system has been the envy of the world.  Yet, a recent article in The Economist "The college-cost calamity" here, surprised me a bit with the extent of concern it documents regarding the state of the US universities.

"A crisis in higher education has been brewing for years. Universities have been spending like students in a bar who think a Rockefeller will pick up the tab."

"The average cost of college per student has risen by three times the rate of inflation since 1983. The cost of tuition alone has soared from 23% of median annual earnings in 2001 to 38% in 2010. Such increases plainly cannot continue."

There are schools that are approaching and attempting to change "education" for the 21st century, from simple automation to hopefully transformation.

"Some universities are addressing their financial problems. Cornell began in 2009: Kent Fuchs, the provost, offered to cut the costs of administration by $70m, if the faculty would concentrate on excelling at a limited number of important things, rather than trying to do everything. Mr Fuchs says that a university can become too broad; a financial squeeze is an opportunity to become more focused."

Though, when the customers (students) say they won't buy the goods (education and training) offered because the price is too high, then the shops (universities) will be forced into change they may not desire.

"Still, the doomsayers may be onto something. Four-year residential colleges cannot keep on forever raising their fees faster than the public’s capacity to pay them, especially when online degrees are so much cheaper. Universities that fail to prepare for the hurricane ahead are likely to be flattened by it."

China and India may want to prepare for Western students in the coming decades?

Social Networks and Ads

About eight years ago, my team and I at Procter & Gamble had the opportunity to take one of the largest media buy and deploy companies to task - we had been paying them, in seven figures, for bot clicks on online advertisements.  The worse part of it was, they had no clue themselves.

This occurred when we were building and rolling out the women's word-of-mouth marketing brand VocalPoint, see the site here.  Leveraging my personal global network across ISPs and internet based companies, we developed the hypothesis of the bot clicks, and then we proved it through data analysis.

It is fascinating to see that today it remains just as bad.

"On July 30th Limited Run, a New York platform for the online shops of record labels, artists and designers, said it would delete its Facebook page. It estimated that 80% of clicks came from “bots”—computers rather than people, but triggering payments to Facebook all the same."

See The Economist's article "Facebook: Work in Progress" here.