Strategy & Operational Performance Management Survey

21 07 2011

If you have a moment, take a few seconds to fill out a survey.  I’ll post some of the more relevant survey results here over time. Basically 7 questions and a place to fill in your answer if you want to share more.

Link to survey





The enemy of my enemy is my friend

19 07 2011

Strange what a few years means to the technology sector.  Google, once champion of the little guy, the individual, the anti-Mircosoft, now becomes the problem.  The Michigan – Ohio State rivalry of the tech industry was supposed to be Apple and Microsoft.  They have spanned great battles over the years – and better commercials…

Yet, all of a sudden Google is the evil invader in the space.  What else could make Apple and Microsoft consortium partners?

WHAT!!  Wait a second…

Nortel Networks, one of the great patent holders, is watching its power, influence, and ultimately its profits dwindle away.  Up for auction were a sizable number of its patents.  While Google was the early favorite, Apple and Microsoft teamed up with Ericsson, EMC, RIM, and Sony teamed up with each other to outspend Google.

While we get to wait and see what this means for Google, we can wonder what our competition might be willing to do to us given the opportunity?

  • How do external opportunities trigger discussions within the organization?
  • Who monitors the external market for us?
  • How do we leverage information to make timely decisions?
  • How well do we gamemanship our competition?  Are they better at it than us?

 





Obesity in the US

29 04 2011

This is again perhaps a little off topic for me, but it does pose some really interesting strategic points for consideration…

The cigarette of today’s generation is fast food, sodas, and poor eating habits in general.  Obesity in the US is projected to be about 20% of our annual health spending – or roughly $350 billion (USA Today) by 2018.  This means the number will double from 10% of the spending to 20% by 2018.  Food related deaths account for more than half of our causes of death (CDC) and we focus very little attention to it.  And for the first time in decades the US life expectancy is projected to decline by 5 years (National Institute of Health) with this generation.

So from the viewpoint of Strategy, this poses a wild number of potentials.  Depending upon your industry this either opens you to a tremendous opportunity, or a concerning level of risk.

Opportunities:

  • Food industry – being an early mover to healthier versions of your food may attract more customers
  • Education – providing content for school, churches, communities, etc may open more doors for you
  • Healthcare – with increasing costs, providers that can target care to show health gains with children, or keep their clients healthier may see improved demand for their products while at the same time controller their costs.
  • Marketing – Branding your self as a healthy alternative
  • HR – being seen as a healthier employer may improve your retainment and attraction to new employees.  You may also see a reduction in your health care costs over time.

Risks:

  • Fast food – This entire industry may be about to come under ever increasing levels of attack.  The attacks will likely be on menu, ingredients, nutritional labeling, and potentially lawsuits.
  • Sports drinks – As parents become more aware of the level of sugar in these drinks, demand is certainly at risk.  As one of their core segments is children, it is also possible that even the marketing placement will be called into question.
  • Education – As Jamie Oliver’s Food Revolution has clearly pointed out, he is certainly targeting the school system menu.  Once the parents get involved school district lunch menus will likely need to change dramatically.
  • Healthcare – spiraling costs will force most healthcare companies to make very difficult decisions to remain profitable.

Here is Jamie Oliver’s presentation on TED.

Here you can see the growing obesity problem in the us (CDC).





Changing Market Place

7 04 2011

Yesterday in the NYTimes was a story about the speed of the changing U.S. race demographic.  As our demographic changes, so will tastes and demand.  Many companies have sat atop their markets feeling they are invincible, yet with these changes many of the companies will find out much too late that they were not as solid as they once felt.

Have you asked yourself any of the following:

  • What percent of our clients come from the majority?
  • Do we have products that meet demands from all sectors?
  • Are we at risk if the legislature, or governing boards, can their ethnicity over time?
  • Where are our biggest threats in this new market?
  • Where are our greatest advantages?
  • What else can we do to capture more in this changing market?
  • Where might new competitors come after our market?

If you are not strategically discussing questions like these, then you elevate your risk of something happening to undermine your position within your market.

 





Pink Bat

9 03 2011

I know I have not published much here lately, but I have been writing a fair bit.  Some of these I have just been a little timid about sharing as they are a little inconsistent with the goal of this blog.

Anyway, while I was doing a little research about my current project I stumbled across this and thought the video was well worth sharing. In a nutshell, train yourself to see solutions to problems.  Train your business to be more aware, to take risks, but more importantly to always be thinking about solutions.

The following video is from Michael McMillian and while the book does not get the wildest of reviews, the concept is and short video is worthwhile.

 

pinkbatmovie.com





Remember When…Google was the Anti-Microsoft

15 11 2010

Today, Facebook launched a new email service.  It has long been in the works as Project Titan.  While perhaps not a direct threat against Google, it is certainly an attack on Gmail.

Remember back to the good old days…when we walked uphill to school in the snow both ways, when children actually played baseball (and not the video game version), when information was delivered with ink and paper, when cell phones were the size of our heads…

…err I digress, remember when Google was the white knight against Microsoft.  We wanted to use Netscape just to make Microsoft mad, but IE was just better.  Ah, yes the good old days and the turn of the century.  Was it really just in 2000 when they signed the pact with Yahoo to make them the default search engine?  A mere decade it took them to go from White Knight to feared Big Brother.  It took Apple 26 years to go from 1984 to being mocked by Futurama with its Eyephone or from having their great anti-Microsoft ad campaign spoofed by TMobile in Piggyback.

Has Google really done this in less than 10 years?  We will soon see.  Earlier this month Google found itself in a little hot water over their StreetView cars that were driving around picking geographically based personal information.  I understand that personal privacy may be dead, but I would venture a bet that if there is a backlash it will be aimed squarely at Google (and ironically in this case Facebook).

Clearly not all markets move at breakneck speed, but it does tell a story of thinking about tomorrow in a more methodology approach.





Flakes…not just for breakfast anymore

5 10 2010

Carbon Flakes (aka graphene) just earned a pair of University of Manchester students $1.4 million, oh and the Nobel prize.  Think nanometer material that is unbelievably strong (Wikipedia).

While we might be a few years off, there is certainly some potential to see new paradigm shifts in certain markets:

  • What could a light weight, strong coating do to the car market where weight and MPG are inversely related?
  • What could it mean to the military in terms of personnel and vehicle armor?
  • What could it do to clothing?
  • How about kitchen materials?
  • How about computer components?
  • Plastics?

If you believe this could impact your products, your market, what would you do?  When would you need to start thinking about it?  How do you discuss items that might change your space?





Recession is OVER!!!

27 09 2010

Perhaps not all signs agree with the National Bureau of Economic Research that the recession ended in June 2009. It is pretty clear that the economy is still not as healthy as everyone would like.  Our unemployment rate is still hovering around 10%, and Mass Layoffs is trending in the right direction, but still high.  Looking at the chart below, it is clear that Mass Layoff events are declining (though there could be some other explanations as well) and getting closer to the roughly 1250 average during better times.

Housing starts are on the rise again, yet the DJIA has only recovered a little of the value from the losses from 2008 and early 2009.  While we may still may be feeling the effects of the recession, it is clear that most indications are moving in the right direction.





The end of Blockbusters…

23 09 2010

OK, well it is potentially the end of Blockbuster Inc.  This morning Blockbuster filed for chapter 11 protection.  It is a great example of the Risk of being the market leader.  They owned the market, they were on top of the world.  I am sure during their heyday money was being thrown all over the place.

I would love to hear these questions answered:

The trap of leadership is that you often have to wait and see the result.  You are often not allowed to change your business model until it is too late.  If you change it when you probably need to and a loss occurs, then everyone loses their jobs.  The analysts would quickly call out leadership saying that they lost market share because of the business model shift.  Even it is was a great move that would ultimately save the company, our short term focus is entirely too great.

It is also difficult to understand the nature of the perceived threat.  I am sure there were a couple of times when Management said “what do we do about NetFlix and the changes in the market?”  I would guess that 10% market share did not scare anyone, nor 20%.  Yet, at this point there was too much momentum.

As leaders, when do we act?

If we react too soon, we risk looking prone to panic.  We can always explain it easier after the fact.  Our egos, politics in general, and concern about saving face probably drive more decisions than anyone would ever want to admit.

All to often we push harder on marketing and sales to cover shortfalls in market share.  I would be willing to bet that the company spent more time creating sales spiffs and getting creative in terms of finances, than investing in new business models.  What this leads to is a further entrenchment into the business model, a “we can weather this storm” mentality.

I wonder what would have happened if they would have set hard targets in terms of driving action.  What if they would have said “once our market share slips by 10%, I want a meeting where we come up with 5 new business models”.  We are just not trained to think about creating very specific action.

We ponder and delay (then get out and let someone else handle the mess).





Mass Layoffs Jan 2010

1 03 2010

Sorry I have been a little short on blogs the last few weeks…

The US Department of Labor – Bureau of Statistics released the January Mass Layoff Events data for January.  I have been watching the Mass Layoff events for a while now for a couple of reasons, but primarily as a leading indicator of the economy.  I spoke last year a great deal how the number had exceeded 2000 events for 12 straight months and how this was most likely a sign of a protracted recovery period.   The January number was 1,761 which was roughly the same for the last three months.  While the move under 2,000 was at least a step in the right direction it appears as if we continue at an elevated rate.

Job creation is one of the primary keys to economic recovery and it seems as if we are still shedding above normal levels of jobs.   Continuing at 1,700+ events (which in Jan actually meant 180,000 claimants – or an annualized number of over 2 mil initial claimants.  The point is that I feel the economic climate is still contracting, though perhaps at now slower rates.

From a street level assessment I am starting to hear of more projects starting, consulting firms seems to be a little more optimistic outlook for the year, and less people concerned about their current state.





Mass Layoffs Nov 2009

23 12 2009

Yesterday, the Department of Labor Bureau of Labor Statistics released the November Mass Layoff Report.  The news was upbeat in that the trend continues to get better (meaning fewer mass layoff events) with only 1,797 events.  We have spoken about 2,000 events as being extremely high and November was the first time in the last 14 months that the number dropped below 2,000.  The bad news is this is still higher than 80% of the monthly numbers since 1999 so the numbers are again not positive, just less negative.

One bit of interesting news is that the number of layoffs (officially claimants) per event was at one of its lowest levels since the beginning of 1999.  This means that while the number of layoff events is still high, there were fewer claimants per event (fewer people laid off or more found something else), or that instead of 200,000 claimants, we saw only 165,346.  This number is a healthier indicator than the number of events (see the dotted red lines in the chart below and compare the crimson line and the blue line from the chart above).





Consumer Price Index Nov 2009

16 12 2009

Today the BLS released the Consumer Price Index (CPI).  The news is a little upbeat, but again it is based on energy prices driving the index.  The rest of the field is a little flat.  Overall the CPI rose .4% with Energy jumping 4.1%.

What is more interesting in news around this is that housing starts are on the rise and the stock market is up this morning on the announcement of the CPI data.

Stocks rise ahead of Fed decision





Employment Situation November 2009

7 12 2009

On Friday, the BLS released the Employment Situation report.  Everyone jumped on the news that the unemployment rate actually dropped for the first time in months.  While this is a great indicator, the basis for the jump was an increase in temporary help and healthcare jobs.  With Christmas looming,  I fear this is an artificial indicator as this is temporary help for a season that requires more than normal levels of help.  We need a number of industries adding jobs for this report to be positive, until then it is just a little less negative.

We lost 11,000 jobs compared to the 130,000 that Wall Street expected.  Or perhaps we have cut so many jobs the last few months, that we could not find a place to cut anymore.  I am also curious if this isn’t a little manipulated either in timing or impact as the President has been calling for job creation.

What I would really like to see out of Congress and the White House are very specific plans around job creation.  Just like a company saying we want to see 20% growth, yet not laying out the specific marketing, sales, and operational plans to get there it is all just hope.  And hope is not strategy.





Consumer Price Index – October 2009

20 11 2009

Yesterday the US Department of Labor – Bureau of Labor Statistics released the October report on the US Consumer Price Index (CPI).  Not all that surprisingly, the number rose .27% following last months .17% growth.  This marks the six straight month of growth in the CPI and that the Index is returning to the trend line prior to the October disruption.

In the chart below are two parallel lines marking a rough trend of the CPI.  It appears as if the steady growth rate is returning.  This is at least an indication that the economy is stabilizing.





Mass Layoff Events October 2009

20 11 2009

Today the US Department of Labor – Bureau of Labor Statistics reported the October Mass Layoff Events (here are the Sept and Aug blogs).  We have watched this since late last year when the number of events crossed the 2,000 mark.  This marks our 14 month in a row where we have exceeded that level.  While this is still an alarming rate of Layoff Events at least we can say that the trend could be moving in the direction of dropping below the 2,000 next month.

I still have concerns about the state of the US Economy as we approach the end of the year.  If I were to guess, I think we will see this number drop below 2,000 for November, but return to greater than 2,000 in December and/or January.





Producer Price Index October 2009

18 11 2009

Yesterday’s Bureau of Labor Statistics (BLS) release of the Produce Price Index (PPI) saw prices moving north again, this time a .3% gain compared to last months .6% loss.  The numbers seem to be stabilizing (one month a little up, on month a little down).  Looking into a little more depth we see that Energy and Food are the primary drivers.

If you are looking for more information relevant to your industry – check out www.bls.gov/ppi/.  They break out the information a number of different ways.

 

 





The Cost of Infrastructure – Environmental Scanning (Blockbuster vs. NetFlix)

12 11 2009

Last week in a workshop I was asked the question about Environmental Scans and Strategy Management.  The challenge was probably long overdue.  When I was first drawing up my framework on Performance Management, I specifically wanted to call out questions about how we look at the market.  I felt I had seen too much insular thinking within companies with the risk being much too high.  We need to be looking at the market on a regular basis, perhaps not with high frequency.

Let’s roll back the clock on the movie rental business to 1990.  In almost every suburban strip mall was a mom and pop, or small chain movie rental store.  We were able to rent a movies and watch them in the comfort of our on home.  There was no DVR (though if we could figure out the VCR we could have taped movies), there were not 427 premium movie channels, and cable was still in its infancy.  Over the next decade, Blockbuster moved in and wiped out almost everyone else in the industry – “opening one store every seventeen hours” (Wikipedia – no reference).  We loved the new model, and the fact that our membership card worked even when we were on vacation.  If we went back and looked at the analyst reviews, I am sure they had glowing views of how this was the model for the future.  Viacom jumped in and bought the business for $8.4 billion in 1994.

Oh, how internet time flies.  NetFlix with no brick and mortar costs jumps into the game (not to mention DVR, Pay-for-View, TiVO, etc) and what was once valued as a $8.4 billion dollar business was spun back off for a fraction of its original purchase price.  Today Blockbusters market cap is ~$160 million (compared to NetFlix $3.2 billion) and it continues to loose money.

What happened…you can spin this a number of ways:

  • They were too tied to their infrastructure
  • They were slow to react, or never really understood the threat before it was too late
  • They thought they were too big to fail

They were a great business model, let’s take a cottage industry and scale it.  And it worked great for a decade.  How do you think they would answer the question about the relevance to a more rigorous environmental scanning process?

Just think, perhaps even one conversation about “what would happen if someone figures out how to deliver movies via the internet” might have saved Blockbuster.  I know, I know, this could never happen to you as this was an isolated incident.  Think of the travel industry, General Motors, Enron, Compaq, CompUSA, TWA – and I am sure you could add 20 more…

Companies, like the products they often make, have shelf lives.  If we are not thinking of new ways to reinvent ourselves, it is highly likely someday we will become a “where are they now” business case.

  • What do you specifically do to challenge status quo?
  • When was the last time you had your best minds come up with the next generation business models?
  • When was the last time you identified the 3 largest threats to your business?
  • When was the last time you had a 3rd party provide a critique of the market you are in?




Defining the Customer – Brandwagon

9 11 2009

One of my favorite strategy quotes is Michael Porter’s – “The essence of strategy is choosing what not to do.”

It is easy to jump on what we perceive as good deals, or trends.  Take for example my old story about Patagonia after Sarah Palin stated Patagonia as one of her favorite brands.  Instead of jumping on the bandwagon of seemingly a guaranteed increase in sales, they choose to distance themselves from Sarah Palin with the following quote:

“Patagonia’s environmental mission greatly differs from Sarah Palin’s,” Patagonia rep Jen Rapp told the WSJ. “Just wearing the clothing of an environmental company does not necessarily make someone an environmentalist.”

Or when Pepsi comes knocking with a “great deal”…

  • How well do we know our customers?
  • Can we use this to our advantage and draw more people in by being selective in what we offer?
  • When Wal~Mart moves into town…do you change what you do, or let them eat up your profits?
  • How unique are you and what value does that create?




Price of Oil

27 10 2009

One of the biggest impacts to the US economy is the cost of oil.  We are still the leading consumers, though our lead is being taken over by China.  It is no surprise that the price of oil/gas can either fuel US economic growth, or bring it to a crawl.  I remember (somewhat fuzzy) as a kid waiting in line for gas, and I sold my Ford Expedition in fear that gas was going to see $5/gallon last year. While perhaps I sold the car a little prematurely, the basic fundamental truth about the control of the price of oil is well beyond me. And in someways beyond any of us.

OPEC mostly gets away with what it wants in terms of prices, and China is clearly working to leverage its relations with OPEC countries to improve its position.  While this isn’t necessarily bad for the US, we do lose some of our bargaining power.  And as China continues to increase demand, it drives up market prices.

I am going to try to add the Price of Oil to the Baumohl Indicator series on a bi-weekly basis.  My goal is to continue to explore some of the indicators of US Economic Performance and how they impact business cycles.





Mass Layoffs Sept 2009

22 10 2009

The Bureau of Labor Statistics today announced the Mass Layoffs from September.  The number of events (more than 50 people laid off) is down a little from August, but we are still seeing much larger levels than normal.  The September number of 2,561 layoff events is roughly 2x the normal average.

This is a slight sign the economy may be bottoming out.  What is still disturbing here is the consistency of the level of mass layoffs.  For the last 12 months (see blue box in chart) we have had over 2,000 events per month compared to a normal level of 1,250.  We are still adding too many people to the unemployed – and a system that is built to run on full employment.  Over the last 20 years we have only seen two other spikes, yet in both of those periods we only saw a brief period of spike.  And again in neither of those cases did we ever reach 2,500 events.  Over the last 12 months we have seen 5 months in excess of 2,500 events.  Not good news on any front.

Quite soon, we need to see a substantial drop in Mass Layoffs to give us a positive  indicator that the economy is turning around.  We see a good number of positive signs, but this one is still a big red flag.  Again, if we look at the post 9/11 trend you can tell this trend tapers back to normal.  Mass Layoff Events Sept 2009








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