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Amazing Discovery - Innovation Is Not A Strategy
Steve Hannaford Tells Us Why Chrysler is Dead
IBM Rumored to be Planning Unprecedented Offshoring Switch for 2007
Steve Hannaford Tells Us Why Chrysler is Dead
IBM Rumored to be Planning Unprecedented Offshoring Switch for 2007
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Thursday, May 17, 2007
Amazing Discovery - Innovation Is Not A Strategy
The cover story for the May 3 issue of BusinessWeek was "World's Most Innovative Companies" The big point was that the idea of running around as a multi-millionaire CEO chanting the word innovation as if it would magically alter your organization has now been recognized as another in the long line of stupid management fads.[...] At the behest of an "ideation" consultant, he donned a blue superhero costume—cape, tights, and all—to put a little extra oomph behind the company's innovation-boosting campaign. "I guess the thinking was that if you free people from the norm, you'll unleash a torrent of creativity," says Scott Anthony, president of Innosight, a consulting firm co-founded by Harvard Business School professor Clayton Christensen. Anthony refused to name the company because it was a client. "Innovation Man led to a lot of laughs," he quips, "but it didn't lead to a lot of innovation."According to the article many CEOs, having failed at turning their billion-dollar behemoths into innovation engines, are experiencing "innovation fatigue." I am shocked! Shocked, I say. Shocked to learn that innovation is not a commodity that can be ordered up like Papa John's Pizza. Shocked to learn that innovation doesn't exist on its own like, say, cotton.
The same might be said for many gimmicks that companies have tried over the past few years in their attempts to boost growth. Suddenly trendy, innovation took on the flavor of an elixir, as companies raced to hire "chief innovation officers" and build innovation centers complete with purple-painted walls and conference rooms with funny names. Ford Motor Co. (F) boasted in a press release about its new Innovation Acceleration Center in Dearborn, Mich.: "It's amazing what a room filled with radio-controlled cars, a 3-ft. Statue of Liberty made of Legos, and some comfy couches can do to stir the imagination." [...]
It turns out that innovation is actually a result - something that happens after you change every aspect of your stodgy, corrupt, inefficient, overbearing, outsourced, badly managed global corporation where everyone spends 80 percent of their time in meetings, 20 percent of their time doing reports, 10 percent of their time fixing stuff someone else did wrong, and 5 percent of their time doing something valuable that a customer will actually pay for. (I know, that's 115%. That's called increasing productivity. Guess which 15% gets dropped when your average, everyday human realizes they can only give 100% today.)
And this turns out to be very, very hard.
But there are a few innovative companies. And they're innovative because, well, because they just are. Because they actually do the hard things most companies can't, or won't, do. Because they focus on things far more tangible than "being innovative." Things like finding and hiring talented employees and then not stomping on them or burning them out. Things like actually listening to employees with good ideas. And things like not letting the accountants and lawyers decide about what does and does not get done.
Mostly, innovators just seem to understand that innovation is a fundamental result, that comes from getting the fundamentals of running a business right. What a shocker.
Posted by: 
Terry Frazier at 4:34 PM
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Categories: Business & Finance, Strategy
Terry Frazier at 4:34 PM
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Tuesday, May 15, 2007
Steve Hannaford Tells Us Why Chrysler is Dead
The US auto industry is in turmoil - rising gas prices, changing buyer
tastes, stiffer environmental laws, and massive labor costs, among
other things - have cost US automakers tens of billions in losses in
recent years. And now the pompous jackasses at Daimler-Benz have killed
Chrysler. It's bad enough that my beloved IBM ThinkPads have been sold
to Lenovo - I can't even imagine buying a Chinese-made Jeep! Chrysler
was in trouble when Daimler bought them in 1998, but the Germans were
supposed to make it better, not spend $40 billion to make it worse.
[More...]
Posted by: Terry Frazier at 9:00 AM
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Categories: Business & Finance, Globalization
Terry Frazier at 9:00 AM
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Thursday, May 10, 2007
IBM Rumored to be Planning Unprecedented Offshoring Switch for 2007
I worked for IBM from 1995 to 1998. During that time I met some great people and had the privilege of working on more than one world-class project. As part of the benefits package I was allowed to buy IBM stock at a discount, and I did so. A few years ago I sold the stock off, as it had stagnated for a while and my general fondness for the company had dwindled. I still have friends there, many of them working for IBM Global Services. Now Robert Cringely reports that Big Blue is planning to axe more than 100,000 people from IGS, moving all the work offshore:
I, Cringely:The Pulpit - Lean and Mean
[...]
The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week's 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week's "job action," as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow, each dribbled out until some reporter (that would be me) notices the growing trend, then dumped en masse when the jig is up, but no later than the end of this year.[...]
This cannot be good. As Cringely notes, offshoring of this scale creates massive communication and support problems - at least if the customer is in the US. My experience with BellSouth's lame, dysfunctional, globalized tech support has been a disaster. Dell, same story. In fact, if you have ever had a good experience with offshore tech support I'd like to hear about it. But more importantly, if Cringely is right IBM management is going to axe 100,000 jobs knowing full well that it may cripple the company. I don't care if the stock price rockets upward for some brief period. I'm glad I no longer have any financial stake in Big Blue.
Posted by: Terry Frazier at 10:17 PM
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Categories: Business & Finance, Globalization, Productivity
Terry Frazier at 10:17 PM
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