JimPinto.com - Connections for Growth & Success™
No. 274 : 27 October 2009

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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ISA iceberg continues to melt down

In the face of 30% declining revenues The International Society of Automation (ISA) announced several major cutbacks during the recent Houston Expo in the first week of October:
  1. The annual Expo (long been forecasted to decline) has now been canceled. Next year there will be Automation Week, which is primarily a Conference, and an adjunct table-top show (equivalent to a local Houston-section regional show). Entry-fee will be $950; I predict it will be a flop (less than 100 paying attendees).
  2. The staff of about 75 at ISA HQ in N. Carolina has been cut by 30% - several valuable long-term employees were let go.
  3. The flagship InTech monthly magazine is reduced to 6 issues a year. It remains unclear how the content will be generated and where it will be produced and published.
  4. The thrice-weekly InTech eNews, a good money-maker, is now outsourced to Automation.com, based in Minnesota; they got the valuable ISA email list of 75,000 names.
I refer you to articles I've been writing over the past several years - tolling the ISA bell (web links below).

After the layoffs and cutbacks were announced, Jerry Cockrell, current Society President, an academic from Indiana State University, wrote a long letter to all volunteer leaders praising their efforts. It starts, "Today is the first day of the rest of our lives." Huh? I read and re-read the letter. Frankly, beyond stroking everyone, all he said was mush - purely political praise and panegyric from an outgoing, symbolic figurehead.

ISA needs a revolution. The problem is: Any radical change would need the approval by all-volunteer voting board members. They simply engage in endless discussions and eventually, too late, come up with a compromise extension of past ineffectiveness.

During the past several days, I've has too-long discussions with many ISA members, office-holders, past-presidents - all colleagues and long-time friends - which left me conflicted. I also received an email from Glen Harvey, former ISA Executive Director for more than 20 years. I've published his comments as eFeedback (below).

I never criticize without offering solutions. I have offered several solutions in the past (see web links below) but they were criticized as adversarial and analyzed into oblivion.

My column in the November 2009 issue of Automation World represents my latest, friendly suggestions and recommendations. After it has been published (mid-November) I'll provide a summary and a web-link in the next eNews.

As an ISA member for 40 years, and a Fellow since 1992, I have done my best for the Society to succeed, and wish it well.

Click Gary Mintchell blog - ISA Expo Run Ends

Click ISA - Melting Iceberg continues to melt (July 2006)

Click ISA - only incremental progress (June 2006)

Click Antique governance plagues cash-fat ISA (Sept. 2005)

Click ISA at the crossroads (Aug. 2005)

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Emerson's new DeltaV S-Series I/O revolution

About 35 years ago, Distributed Control Systems (DCS) replaced large central control-room main-frame computers. In a traditional slow-growth business, DCS was the fastest growing new segment, generating about $100M worth of TDC 2000 revenue for Honeywell in the first year.

DCS was "distributed" only when compared with the complex systems which dominated control rooms at the time. But these were still fairly large clumps of mini-computers, with multiple marshalling racks of wiring to field-based I/O.

With the arrival of personal computers, Ethernet and Fieldbus, everything started to get smaller and was networked. Wireless networking was supposed to get rid of the I/O racks. But how could anyone get away from wiring up hundreds and thousands of I/O points?

Emerson's Delta V was the first small PC-based DCS, introduced in 1996. The new DeltaV S-series, just introduced (Sept. 2009) includes major enhancements to all I/O processing, operator displays, asset management, batch capability and system security. But it's major achievement is a fundamental, innovative rethink of I/O wiring called "I/O on Demand".

Innovative Electronic Marshalling essentially eliminates the need for a physical path from signal-source to controller. Instead, new single channel CHARacterization ModuleS (CHARMS - cute name) relay I/O info via the Ethernet backbone to any controller, providing single channel integrity and flexibility down to the channel level.

The human-centered design approach, and the resulting "I/O on demand" architecture, is like applying the principles of lean manufacturing to the work processes around an automation project. The enthusiastic Emerson team proclaims, "After 35 years, DCS has gotten fat, and it's now time for lean. This puts the real D in DCS!"

On a typical project with say 16,000 hardwired points, I/O-on-demand alone can cut the number of cabinets by 50% and their footprint by 40%, while eliminating as much as 90% of intra-cabinet wiring. This reduces engineering time dramatically and ensures that changes to the original design can be readily accommodated without rewiring - a BIG problem with legacy DCS.

Getting rid of wires eliminates most activities associated with wiring design and installation. Cabinets, wire, terminations, cable tray design, fusing, installation drawings and a host of other activities are gone. The S-series incorporates a major enhancement for WirelessHART networks, cutting wireless network design time by about 20%.

By putting usability and productivity at the heart of product design, Emerson meets two vital needs of today's global environment: a/ Skills shortages in emerging markets; and b/ an aging experienced workforce in the developed world.

DeltaV S-Series is no ivory-tower re-think. Emerson insiders tell me that they worked the design every step of the way with a large petrochemical customer.

Bravo, Emerson team, for yet another engineering and market coup!

Click Emerson introduces the DeltaV S-series platform

Click Youtube video - DeltaV S Series I/O On Demand

Click DeltaV on Twitter

Click Read more in Andrew Bond's Automation Insider

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Corporate Communism

In recent issues of JimPinto.com eNews, I've been discussing "Crony Capitalism", the resulting huge CEO salaries and golden handshakes, the insidious evil of corporate lobbyists and various and sundry evidence of the continuous corruption of Capitalism.

Dylan Ratigan, Host of MSNBC's Morning Meeting, has been using the phrase "Corporate Communism" on his TV show. He thinks it's an especially fitting term when applied to today's banking and health care systems.

Says Dylan:

    "Weak, outdated players take control of the government and change the rules so that they are protected from the natural competition and reward systems that have created so many innovations in our country. They steal from the citizens and also doom them by trapping the capital that would be used to generate new innovation and, most tangibly in our current situation, jobs."
America is being corrupted by Corporate Communism. We are losing our ability to innovate because the powerful rich have commandeered our government unfairly, to sustain their own wealth and power. They use our wealth and our laws to benefit themselves and their failed companies, and by lobbying and favor-trading with politicians so that the government continues to protect them.

The massive spike in unemployment, the utter destruction of retirement wealth, the collapse in the value of our homes, the worst recession since the Great Depression - have all resulted directly from the abdication of proper government, from "Corporate Communism".

Click Corporate Communism Is Killing Us

Click Youtube video - Corporate Communism

Click Corruption of Capitalism

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Big companies have serious disadvantages

Getting bigger has not helped most big companies. Indeed, size inhibits growth. In the new economy, some of the biggest companies are ailing and failing.

Bigger doesn't make a company better at serving customers. Bigger isn't more rewarding to work for. Bigger doesn't attract investment.

Big companies are hierarchical, self-reinforcing and organized to minimize new threats to the existing order. Big-company management is focused inward, and resources are directed towards preserving past successes, rather than future opportunities.

Evidence shows that there are significant limitations to sheer size. High-performance businesses are very rarely the biggest. With today's technology acceleration, information is the basis of competitive advantage. Strategy and execution must be organized around information, using it to gain unique market insight that can rapidly be turned into products and services. In the new information economy, the relationship between strategy and agility attains great importance; most big companies just cannot be agile.

New products and services can obsolete the old frighteningly fast. High-performance companies can achieve success by focus on the rapid development of innovative new products and services for global markets. Today, that kind of high performance usually comes from relatively small companies.

Click Automation World (Oct. 09) - The demise of size

Click Wired - More Startups, Fewer Giants, Infinite Opportunity

Click Beyond Detroit - On the Road to Recovery, Let the Little Guys Drive

Click Schumacher's 1973 book - Small is Beautiful

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CK Prahalad: The New Age of Innovation

Last week at a TiE Meeting in San Diego, we had a "fireside chat" with C.K.Prahalad. Business Week said of him: "A brilliant professor at the University of Michigan, he may well be the most influential thinker on business strategy today." As is my wont, I sat close up, just a few feet away, to absorb the feelings underlying the philosophy. Years ago, I sat like this with Peter Drucker.

Prof. CK Prahalad has been named in every major survey for over ten years as one of the top ten management thinkers in the world. He is the author of several bestselling management books. His new book is "The New Age of Innovation" (weblink below).

To paraphrase CK: We must understand the past, but not be constrained by it. You cannot start with where we are, and yet that's what most strategy does. When you start with the current situation you can only extrapolate. Strategy is not about extrapolation. Our job is to imagine the future first and fold it in.

CK gave me a key, new insight with one of his examples: Value is embedded in the customer experience.

I took my 5-year-old grand-daughter to buy a Teddy Bear this weekend. We could have gone to ToysRus to choose one which would have cost about $25. We went instead to the "Build-a-Bear Workshop". There the little girl picked the shape and color of the bear, stuffed it herself, picked out its heart and put it in place (with a promise to be always kind and gentle), selected the voice (to giggle when squeezed), gave the bear a name, picked out a cute costume and shoes for it, and received a birth certificate after supplying an email address and phone number. The toy cost me $50 (and I estimated the store profit-margins to be a lot higher than typical). We could have bought several accessories, including a crib or cradle, but didn't. I looked up Build-a-Bear Workshop - 346 retail stores worldwide, revenue $500M, with strong growth.

CK Prahalad proceeded to apply this "what does the customer really need?" thinking to truck tires, and pace-makers, as further examples. He made us recognize that legacy business constrains, while new-tech makes new magic possible, and levels the playing-field.

iPhone is not just a phone - it's an interactive viewer for thousands of personal "apps". My grand-daughter did not buy a toy - she bought a friend into her family. Customer experience is what sells.

Says CK: We cannot create this new world unless we can imagine it. Go read his book on Innovation.

Click Top 10 CK Prahalad Insights - World Innovation Forum

Click Youtube video - Presentation by Prof. C.K.Prahalad

Click CK Prahalad remains the world's most influential management thinker

Click Amazon.com - CK Prahalad, The New Age of Innovation

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Glenn Harvey [glennharvey@charter.net], formerly Executive Director of ISA (1977-99), writes about the current ISA situation:
    "In the ten years since my ISA retirement, I have tried my best to stay out of the way. Now that ISA has shrunk to its early 1980s level in most respects, even smaller in membership numbers, I feel compelled to comment.

    "When an entity loses its way in the marketplace, rides its major assets into the ground, fails to update itself in either the dotcom world or the global marketplace, deals with financial downturns by cutting rather than by investing in enlightened new initiatives, there is only one conclusion to draw. Whether that entity is GM, AIG or ISA - the underlying cause is failed management and failed leadership.

    "In short, ISA's governance and political structure assure lack of clearly-defined lines of responsibility and accountability. The officers and directors are good people who want the best for ISA, but they lack a clear understanding of their role and they are not provided with the essential information they need to make informed decisions.

    "The staff executive defers to the volunteer leaders, who have limited time for ISA and change chairs annually. Volunteers, in turn, are dependent upon the staff for information and must draw on their own experiences (which often do not include enterprise management or board-of-directors experience) when trying to decide what is best for ISA. It is a seat-of-the-pants, circular decision-making process. When the arrows start flying, the leaders 'circle the wagons' and defend each other. Messengers get marginalized by being labeled as out of touch. If the message is too harsh, the messenger is beheaded.

    "The hard cold reality of 2009 is that ISA no longer leads in any facet of its activities - with the possible exceptions of standards and training. But even those areas have been seriously compromised in recent years. The best automation conference is not ISA's, the best control magazine is not ISA's, the best automation exhibit is not ISA's; ISA is not leading technology development, and is not growing globally.

    "Obviously, ISA is on its deathbed. The $20+ million reserves may keep the body on life-support for 6-10 years (based on the current rate of losing $1-4 million each year) but it will barely fog a mirror.

    "I suggest three ways to possibly divert the inevitable:

    1. ISA leaders must spend the time and ISA must invest moderate funds on high-quality training for current and incoming directors on the role of the Board and directors.
    2. ISA must invest significant funds, in the best possible resources to provide the Board with guidance and all the information available to make informed decisions.
    3. The organizational structure must be totally redesigned to enable nimbleness in governance, to clarify lines of responsibility and accountability and to implement any bold new plans that might result from 1 and 2.

    "Can ISA pull itself off its deathbed and get out in front of the curves of change instead of reacting? Who knows, but if large numbers of members do not call for change, ISA will keep doing what it has been doing and the results will be the same."

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Tom Beebe [tbeebe6535@yahoo.com] suggests some cures for the current brand of "Crony Capitalism":
    "This old Reagan Neanderthal still believes 'government is not the solution, government is the problem'. Here's what I believe are the solutions:

    1. Campaign reform: We the people should know who 'our' representatives really represent. I believe the most essential reform has been overlooked. Contributions should come from individuals ONLY (and, of course, be public). Cash, or any other support for candidates must not come from an organization of ANY type. Yes, unions and all. Any contribution from an organization is but a means to conceal the identities of individuals. This also gets the government out of the business of judging who is a charity, and a lot of other powers.
    2. Tax reform: Again far more sweeping. Complexity conceals the interests that "our" representatives truly do represent. It must reward production of wealth; it must treat all equally, taxing disposable income equally. It must act like a sales tax, to discourage the excesses of lifestyle you mention.
    3. The value created by a corporation is the product of purchases, labor, management contribution which is another form of labor, and return to sources of capital for risking that capital. Here's where your beliefs and mine begin to merge. Employee ownership is OK, if the employees share the risk. Cronyism should be purged, by holding management responsible for loss.

    Above all else, I believe in the Supreme Court Inscription 'Equal Justice For All Under Law'. As to your favorite subject-du-jour, greed, I see it as simply a matter of lack of accountability to stockholders. Boards must not be selected by the good-old-boy network. I'd be open to such wild ideas as abolition of boards, election of operating officers directly by stockholders (with term limits?)

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Thomas Blaney [onesky11@cox.net] thinks that we need a major transformation to people-values. He writes:
    "Everything has a subsidy. It only works if the other markets are also 'free'. Companies are so big because they have to compete with other companies that have been nationalized, or are heavily subsidized by other governments. They always say they want 'free' trade, but not fair trade: Free to trade to force Americans to compete against slave labor, no environmental laws, no human rights laws, no accountability. Nothing that has anything to do with what makes us 'great'.

    "Corporations are based on the same top-down organizational structure as communism. Employees can't see the finances or shape decisions, but are expected to be loyal and sacrifice personal privacy. Money and speech were declared to be the same thing. When is someone who got laid off going to sue their employer for denying them speech? How much political lobbying power could have been bought with all the money employees lost?

    "The experiment with small government was a catastrophe. When people who believe the government is the enemy and can't do anything right are elected, they make sure the people appointed to run it fail. We need people in government who understand that government represents all the people. Corporations must be made accountable to the people.

    "Americans are not all that different from other people around the world. Get over it. We need a major transformation from corporate values, to people values. We finally have an administration that believes in good governance, so get busy and earn it."

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