! Updated 29 March 2009 !>
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Automation Business RetreatIn the current financial downturn, the falling tide has lowered all boats, and the stock of all the automation majors had declined to less than 50% of recent levels. Lasting effects are hard to predict, but clearly there will be some fallout.
As revenues continue to decline, consider what happens: The bean-counters' cutback formulas result from simple spread-sheet calculations. Managers are told, "Your budget must be cut by X%." Few managers eliminate themselves, and so the next level in the hierarchy reviews and implements the cuts.
It takes a decisive marketing-orientated business leader to stop a steady decline. Accountants (bean counters) cannot do it. They simply track the decline with spreadsheets and matching cutbacks. Read the JimPinto.com automation weblogs to note the troops' despair, plus the deadening silence from top levels.
Meantime, what's happening at the top? The Honeywell weblog reports (not directly confirmed, but not denied) that CEO Dave Cote's 2008 compensation was $5 million, "up nearly 55% from 2007". Someone then started an informal poll: "Will Dave Cote forego a pay increase in 2009?"
The Honeywell weblog compared David Cote as CEO of a $35 billion company to David Farr as CEO of a $25 billion company, and quoted a press release, saying, "How's this for leadership?":
When the recovery comes, as it inevitably will, expect significant changes in the automation business. Many major players will not weather the storm. There will be no bailouts, just buyouts. Acquired companies will provide acquirers with opportunities for consolidations (and cost-cutting eliminations) with an expanded customer base.
My old prediction will be finally fulfilled: The ranks of the automation Big-10 will shrink to just 5.
Strategies for the downturnNo one really knows whether or when the current economic slide will turn around. My own view is that this is an inflection point, a serious break from the past, a wake-up call from old illusions.
For well-managed companies, this downturn offers the chance to re-examine fundamental value propositions and develop new strategies. Here are seven key strategies not just to survive, but to thrive, in the current business environment:
For positive individuals at levels below top management, I have simple advice: Don't wait to be riffed, laid-off or whatever the expression. Look for good, complementary partners, and start your own company. This is a GOOD time to DO something different.
Software as a Service - Cloud ComputingOver a decade ago "The Network is the Computer" was Sun Microsystems' slogan. Now the concept is emerging with a new wave of explosive growth.
Cloud Computing is the metaphor for the complex infrastructure available as a service via the Internet. Software as a Service (SaaS, pronounced "sass") typically delivers applications through the browser. This could be just one application (Salesforce.com is by far the best-known example among enterprise applications) but that is being extended to several desktop applications, and SaaS is also becoming common for HR and ERP and others.
Utility computing is a form of cloud computing, already available from Amazon.com, Sun, IBM, Google, Yahoo and others. The original offerings were storage and virtual servers on demand. But now, they are replacing complete datacenters, enabling users to stitch together memory, I/O, storage, and computational capacity as virtualized resource pools available over the Internet.
In the "old" days, huge hunks of software were installed on individual computers as though they were isolated lumps of hardware. "End User License Agreements" (EULA) required users to have a fully paid license per computer. Installation processes, plus regular updates and bug-fixes, were a pain. How many terabytes of packaged software remain dormant on how many computers?
SaaS applications are licensed for use on demand, removing the cost and burden of installed software on every computer. This greatly reduces the ongoing maintenance required for conventional "full" installations, and facilitates central control of all updates and upgrades.
SaaS shifts the burden of installation and keeping an application up-and-running from the user to the supplier. Users can leverage rapid with very little support. Customers benefit from the vendor's latest technological features, without the disruptions and costs associated with software updates and upgrades.
SaaS-delivered software enables end-users to deploy more quickly at a much lower cost - typically 2 to 4 times better than fully installed EULA alternatives.
SaaS and cloud-computing are being adopted by many small and large enterprises, including General Electric, and Procter & Gamble. SaaS is here, and it's the wave of the future.
Biotech Tsunami - growing new energyI am enthralled with some of the latest videos announced by TED (Technology-Entertainment-Design - 18 minutes talks with significant people.)
You MUST watch Juan Enriquez - his conversational style and lucid descriptions will make you understand and believe the future he predicts. He insists that the current financial turbulence will be dwarfed by the Biotech 'tsunami' that is coming.
Juan Enriquez was founding director of the Harvard Business School Life Sciences Project, and has published widely on technological and sociological topics. He played a role in reforming Mexico's domestic policy and is now a Managing Director at Excel Medical Ventures, a life sciences venture capital firm, and the chair and CEO of Biotechnology, a research and investment firm helping to fund new genomics firms.
Juan Enriquez is a broad thinker who studies the intersection of science, business and society. He thinks and writes about the profound changes that genomics and other life sciences will cause in business, technology, politics and society. He has a talent for bridging disciplines and deliver a coherent look ahead.
Living in the Present Moment - Here & NowAfter a hectic working life, when I retired (which to me means, doing what I wish to do) I thought I'd learn to meditate - you know, sit down and discover stillness. Turn off the TV and any distractions; just sit and still your mind.
Well, that's not easy - have you tried it? Your "monkey mind" keeps jumping around, from the events of the past to the possibilities and problems of the future. Back and forth. Never settling in the present moment, the NOW.
I read lots of old books I had previously put on the shelf for just this time. I studied what the Dalai Lama had to say about meditation. I read about the different kinds of Indian Yoga. I started to practice "mindfulness" - living in the Now. I made this the topic of my speech at my local Toastmasters group. And they loved it!
My first Youtube video was also my first "guru" talk on this subject - how we can master our "monkey-minds" and start dwelling in the present moment - here and now.
Well, I made other videos - my poem "Bush Lied", written in March 2008, the fifth anniversary of the Iraq War, which was a minor hit (relatively speaking - over 1,000 views in the first few months).
Then I did a few video versions of my ISA InTech "Pinto's Points" - which were well received, though not too exciting. Heck, my guitar rendition of "Sioux City Sue" got more views. My videos of my grandson Siddhu doing magic, and learning to ride a bike, have become quite popular with our family, but not broadly viewed.
But, you know what? That first video, "Living in the Present Moment - Here and Now" continues to attract a much broader audience. It's view-count has exceeded all my other videos, and it continues to get several hits per day from all over the world. I suppose it might yet become a "viral spiral".
One feedback on the Youtube website says,
eFeedbackRodger Lovrenich [email@example.com] liked my column "Empty titles" on hierarchical labels:
"When I owned my own company, I was so appalled by the 'title game' that I carried two sets of business cards. One for trade shows, on which I gave myself the title 'Design Engineer'. The other was for banking and high level sales calls where I gave myself the title of 'President'. After all, those high level corporate officers would only deal seriously with people at their own level.
"The best grade of folks I met at trade shows were the ones who stayed to chat at our sales booth with our 'Design Engineer'. I am most proud of that title.
"While we are on the subject of hierarchical titles, I think it's really a symptom of a deeper emotion ingrained in the human psyche. Hierarchical titles and labels reflect an expectation of methodical advancement 'up the corporate ladder'. Of course this is to be awarded to the 'deserving' as compensation for outstanding performance in their existing positions.
"Many professions and skills are regrettably NOT in the path to the top and persons who choose these professions should recognize this early so as to avoid disappointment in later life when they find themselves 'stuck in a well paying dead end job' as one of your previous responders lamented.
"I reminisce regularly on the joy and satisfaction being an engineer gave me in my youth. Similar to your waking from a sleep story, I often awake from slumber in an agitated cold sweat thinking I must face another day as company president responsible for keeping jobs, covering payroll, meeting customer commitments, and endless meetings with well meaning people advising me on something they know nothing about except what they read in a trade journal written by a junior reporter.
"If you ever feel the need of a promotion, may I suggest you give yourself the title 'Imperial Supreme Commander'. After that only the three letter title 'GOD' is left. Thanks again for your words of wisdom."
Steve Ziker [firstname.lastname@example.org] waxes eloquent on his new Kindle-2 Amazon eBook:
"You did not mention that you can load the Kindle 2 with MP3 Files and use the Kindle as an MP3 Player for background music while reading. It appears to have about 1.5 GB of available memory and book downloads seem to average 500KB for a 350 page paperback.
"Compared to the original Kindle, the E-Paper Screen is much more readable with 16 grey shades; my only objection is the need for some illumination in dim or darkened areas. There is no backlight (saves on power consumption), but there's good low light readability. That said, the bright-light visibility is superb! No Glare or Washout issues like conventional LCD Displays. It's perfect for sitting outside and reading on nice sunny days. I think this is the device that will really bring E-Paper into the mainstream of handheld devices.
"With the Whispernet turned off, I get an estimated 12-13 days of 2 hours per day usage (based on battery charge left after 4 days). And with Whispernet on and occasionally downloading media content, I get 4 days off the battery easily. And I can recharge the Kindle off of my laptop PC through the USB connection once removed from the AC Charger. The AC Charger, by the way, is Universal Voltage so all I need is a travel plug adapter when overseas.
"There is one problem which has no immediate solution: Everyone around you will want to know what the Kindle 2 is and will want to borrow it to see how it looks, which tends to put a crimp on a spell of quiet reading!"
Hank Shaver [HShaver@amkdrives.com] writes regarding our discussion about the American automation skills enigma:
"We work with interns from the local university and while they are fairly intelligent, they seem to lack problem solving ability, a necessary asset in any engineering job. I will show them puzzles or give them a real world problem to solve and they will look at it for a few minutes and then ask what the answer is. They have all the requisite knowledge to solve the problem but seem to have trouble in systematically figuring it out. Or maybe they just get bored.
"Along with the facts, schools need to teach students to think and put the facts together (maybe dangerous). And this needs to start when they are young. Eighty percent of system design is determining how everything is going to work and if someone doesn't want to put the effort in, they'll go get a job as a policeman somewhere.
"Education is the key, and getting students interested in how things work should be a prime directive."
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