Category: Management

Don Park has an idea which combines a bit of social networking and selling:

A sales person, no matter how carefully you choose them, will be cluess about most of the product he is assigned to sell. The first problem is that they lack the motivation to learn. The second problem is that they are not excited about the product. They are just clueless people who just wants to sell it and don’t care whether the buyer is making the right purchase or not.

The core idea is to let customers sell to each other in return for discount coupons.

The chance of me making a sales is arguably higher than a sales person because a) I am well informed about the products, b) I am highly enthusiastic about the products, and c) I am a peer.

This model is similar to the way BitTorrent works. While I am downloading something via BitTorrent, I am sharing what I downloaded so far with other downloaders in return for faster downloading speed. While I am making a purchase, I am sharing my knowledge and energy with other potential purchasers in return for discounts.

Something to ponder about in how we sell Pragatee…?

Rich Karlgaard (Forbes) writes:

In business the future is real-time supply chains. This development is made possible by a new wave of technology: radio-frequency ID chips the size of pepper grains, broadband wireless and Web-based “dashboards” enabling monitoring and management. Because smart supply chains can be done, they will be done. In fact, they are being done. Manufacturers and retailers now deploying smart supply chains will jump the learning curve and become the Wal-Marts and Dells of the 21st century. Don’t imagine that you can withdraw from this arms race. Smart supply chains are becoming the sine qua non of modern business.

Yet for all the recent progress in supply chains, a weak link remains–the link between product development and manufacturing. You see, it’s not enough to manufacture quickly and cheaply and get your products into the stores just as the big ad campaign is breaking. Your products have to be desired by buyers. You want hits, not dogs.

Affluent, informed people want more than mere adequacy in the products they buy. They want products that satisfy deep desires and make emotional connections. To get this response from customers, you must generate a flow of hit products.

Supply-chain technology also will march in the direction of standards and ubiquity. (Think of personal computers.) At that point, decisive advantage will go to companies that use their supply chains to boost their rate of hit products.

Business Week recently had a story on Cisco’s rejuvenation, with a quote from CEO John Chambers that shows its dominance: “We’ve executed to the point that we have 100% of the industry’s profits, 100% of the cash, and about 70% of the market cap.” More quotes:

[Once Cisco began to understand the breadth and depth of the downturn], we thought it would be the hundred-year flood and that it would last longer than people anticipated. I did not want to make the mistakes that I saw made by other companies during a downturn. The rule I followed was to make the changes one time, make them deeper than you think, articulate the changes in a way that explains your longer-term vision, explain why the changes have to be made, and outline what employees need to stay focused on. And then position for the upturn.

The consensus [when I spoke to big companies] was that you have to deal with the world the way it is, not the way you wish it was. Do not fall into denial. Second, you need to determine whether you did this to yourself or whether there were larger market forces at play. Third, you need to determine how long you think the downturn will last and how challenging it will be, because your strategy will change depending on the depth and severity of the situation.

Jack Welch [former General Electric (GE ) CEO] said it best. He said, “John, you’ll never have a great company until you go through the really tough times. What builds a company is not just how you handle the successes, but it’s the way you handle the real challenges.”

Continue reading Cisco’s Comeback

HBS Working Knowledge writes on managing our most proecious asset:

First Things First defines the four quadrants in such a matrix as:

1. Urgent and important tasks (Quadrant I). For example, dealing with a product recall or completing due diligence before an acquisition can be approved.

2. Not urgent but important tasks (Quadrant II). Examples here include developing key business relationships and drafting a plan for how your company will respond to the changes you foresee taking place in your industry 18 months down the road.

3. Urgent but not important tasks (Quadrant III). Examples of these tasks are taking impromptu phone calls from sales reps or fielding a request from a subordinate to help make arrangements for next week’s unit party.

4. Not urgent and not important tasks (Quadrant IV). For instance, surfing the Internet or gossiping around the water cooler.

The more time you devote to important but not urgent work, the more control you have over your schedule. In particular, the less likely it is that your time will be consumed by putting out fires. This comes as no big surpriseso why is it, then, that people have so much difficulty reducing the time they spend on urgent but unimportant tasks? Stephan Rechtschaffen, author of Timeshifting (Broadway Books, 1996), believes the answer has to do with a process known as entrainment, in which a person becomes almost psychologically addicted to the rhythm of the particular task he’s performing.

When you get to tasks that are not urgent and not important, something really interesting happens,” Rechtschaffen observes. “The ambient rhythm in modern life is so fast that even in our leisure time, instead of relaxing, we tend to take on activities that keep us in this fast rhythm.” Thus, typical Quadrant IV recreational activities tend to be things like watching television (with its fast cuts and high-energy commercials) or playing video games (in which the action moves very rapidly).

“Once you’re in a rhythm, the tendency is to stay in synchronization with that rhythm,” says Rechtschaffen. The result is that “in modern life, Quadrant I, III, and IV activities are all happening at high frequencies. Even though the way to reduce the number of Quadrant I crises in your life is to spend more time in Quadrant II, people resist going there because its rhythm is so different.”

To be able to concentrate on work that is important but not urgent, you have to learn how to gear down. Rechtschaffen recommends scheduling specific times for such tasks. “I set aside time for doing my writing. The ground rule is that although I don’t actually have to be writing during this time, I can’t do anything else. What I’ve found, as I’m sitting there not writing, is that guilt feelings or feelings of inadequacy as a writer come up.

Exceprts from a News.com interview:

Our strategy for development is different than Microsoft’s or Intel’s. Those are ingredient companies. We’re a computer systems company. We have a higher return on R&D than any other computer systems company, about five times the profit for every R&D dollar spent…We only do the kind (of R&D) that benefits the customer. We don’t try to reinvent things that other companies have (invented).

If you look at innovation, it doesn’t just occur in the lab. Comdex is the place you go to show things that nobody knows what to do with, because they haven’t found a market yet. We don’t develop things nobody knows what to do with. We develop things people want to buy and buy in volume. Innovation can occur in supply chain and logistics, manufacturing and distribution, and sales and service. We’ve made computing products far more affordable. If you look at the cost of computers 20 years ago versus now, we’ve caused the whole industry to get more efficient.

Increasingly they’re the same companies in both categories. In the digital home, people want to hook things together. I’ll give an example: If you look at digital cameras two years ago, most had proprietary methods to connect with the PC–special cables, special interfaces. The user said, “Forget that, I want USB.” What’s really winning here is the PC. It continues to be the major point of influence in the use of this information in the home, whether it’s music or pictures. I think you’ll see the same thing happen with video. I’m not suggesting that consumer electronics companies will go away. I’m just suggesting that all companies in this digital home are going to be forced to fit into this framework where consumers want things to hook together.

When you talk to users, you continue to hear the focus move away from memory-processor into other things–video, media, networking. We as an industry have to make our products more reliable, safer, more productive, more entertaining. If we don’t they won’t buy it.

Continue reading Michael Dell Interview

[via Abhay Bhagat] Excerpts from a lively Reveries interview with the “Permission Marketing” man:

The problem for most people who have a good job in a big company is that their main goal is not to lose their jobs. What big companies do is reward people for not screwing up. That is exactly the wrong thing to do, because if they don’t screw up then the company will certainly fail. The whole “safe is risky, risky is safe” paradox kicks in here.

If there are [common] threads [in my books], number one is that treating people with respect always works better than not treating them with respect.

Then number two, I believe as a corollary of that, smart individuals always do things better than dumb organizations. And so if we can empower the smart individuals and organizations to move things forward — especially if they can do it in a way that respects all the constituencies without kowtowing to them, but just respect them — then everything works better. Our jobs are better, our companies are more productive, the products that get made are the products that should be made, and everything just turns out for the best.

You can fire up Outlook Express and have an e-mail relationship with hundreds of your customers before the hour is up. So why don’t you do that? Why don’t you send an e-mail to a hundred people who do business with your company and ask them a question and see what they write back?

Then, have a dialogue with a hundred people for a week and see what you learn. Why don’t you get your staff together for lunch and tell them that the last person who comes up with a crazy idea is fired and see what happens? There are lots of things you can do that don’t cost anything, that aren’t particularly frightening, that can start this process unfolding in a bunch of different directions.

But if you just keep reading about it, nothing’s going to happen.

Fast Company writes: “Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don’t change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.”

WSJ writes about Intel’s change of strategy – from faster chips to chips that fit the new ways people actually use their computers:

That bet is beginning to pay off, helping Intel become one of the biggest winners to emerge from the long tech slump. In the new world of digital wireless gadgets, computer users care about other things besides speed — such as long battery life and small size. Intel has reorganized the company to deliver chips that offer just that.

Intel got a big boost from one of the first fruits of its new strategy: the Pentium M, a specially designed microprocessor for laptop computers. It’s no speed demon, but it gobbles a lot less power than typical chips, giving portable computers a couple extra hours of battery life, and its small size makes it inexpensive to manufacture. Aided by the new product, Intel’s gross profit on chips for notebook systems is about 75% of sales, 10 points higher than its margins on desktop PCs, estimates UBS Securities analyst Thomas Thornhill.

Intel is whipping up demand with a huge advertising blitz for a combination of chips called Centrino, which includes the Pentium M plus wireless networking and other accessory chips.

Intel’s strategies go beyond portable computers. Power-saving features such as those on the Pentium M, for example, could help reduce electrical bills for companies that buy hundreds of servers that use Intel chips. “We are as obsessed now about power consumption as we are about performance,” says Sean Maloney, an Intel executive vice president and general manager of its communications group.

Intel also is looking for other places to use Centrino-style chip combinations, says Mr. Otellini. For example, Intel may incorporate Wi-Fi and data-compression technology into chips for PCs and other home gadgets, to make it easier to beam digitized music, photos and videos to stereos and televisions.

Intel has other big weapons. The massive factories that a year ago looked like costly mistakes are close to ready, just as PC demand is rebounding. Early next year, Intel will start churning out chips with transistors that are just 90 nanometers across — about one-thousandth the width of a human hair — while most rivals are still gearing up 130-nanometer production. The new technology will turn out chips that are faster, less expensive and use less power.

Continue reading Intel’s Strategic Shift

Optimize has an article by Thomas Davenport and H. James Wilson on ensuring that innovative ideas get implemented. The article discusses:
– Idea identification
– Packaging the idea
– Advocating the idea
– Make it happen
– Take the idea outside

Business Week offers a story that one does not get to read often – how a company was turned around, in an industry dominated by Dell. The company at the centre is eMachines.

After eMachines Chairman John Hui took the company private in a $161 million buyout, Wayne Inouye delivered a turnaround that’s just short of miraculous. In the midst of the tech industry’s worst-ever slump, he overhauled everything from PC design to demand forecasting. He cut expenses by outsourcing manufacturing and relying on retail partners to market his products. The payoff: The company is on track to pull in $1 billion in sales this year, up 33% from last year, and has been profitable for eight quarters, Inouye says. This summer, eMachines elbowed aside Gateway to take the No. 3 position in IDC’s rankings of desktop PC makers, behind Dell and Hewlett-Packard.

Inouye stands a good chance of keeping eMachines’ momentum going. Analysts say anything he achieves with higher-priced PCs will be gravy on top of his successful, fast-growing core business. Large PC players will struggle to sell machines so cheaply. “They offer something you can’t get anyplace else: a low-cost entry-level machine that provides a lot of value,” says analyst Stephen Baker of market researcher NDP Group Inc.

Just goes to show that good management can make a difference in any industry.