deal architect

From White Collar to Cyber-Physical

Transitions are painful. Look around the globe and some agrarian economy or another is being industrialized. Some blue collar town is moving to a services focus. Robots, drones and machine learning are transforming every industry in the Western economy.

And the naysayers are out in force ruing the transition, painting doomsday scenarios.

They forget humans are very flexible. We adapt and evolve. And the “old” economies do not disappear. See all the innovation happening around agriculture and food in this New Florence category. See manufacturing bounce back in the US. Not the old kind. More IP in components, more automated, cleaner from a pollution and other waste POV.

And look at the challenges that still await our scientists and engineers – climate change, personalized medicine, efficient desalination, asteroid mining, Arctic harvesting etc. Yes, also gridlock in DC :)

I heard Jeff Immelt of GE once summarize his career. He said he has worked on over 100,000 business problems in his varied career. He can talk aircraft engines, blowout preventers, MRI scanners, locomotives. He has met most country leaders and discussed their opportunities. As he said that I thought I saw him twirl an invisible Rubik’s Cube with his hands.

I advise every young person to think like Jeff. Lord knows we have so many problems still left to solve. It will be a long, long time before we run out of opportunities for every human being who is willing to work on something which moves the planet forward in big and small ways.

Welcoming a new sponsor: Plex Systems

It is an honor to welcome Plex to the past and present gallery of innovators and disruptors who sponsor the Deal Architect and the New Florence. New Renaissance. blogs.

Plex is the Manufacturing Cloud, delivering industry-leading ERP and manufacturing automation across industries including aerospace and defense, food and beverage and motor vehicles with customers like Aerospace Technologies Group, Green Flash Brewing Co., JD Norman Industries’ and Sanders & Morley Candy Makers.

The timing is impeccable as manufacturing is enjoying a renaissance particularly in the US. In the new book, The Digital Enterprise we wrote 

“The United States has offshored manufacturing for years. Now, the country is poised for a stunning turnaround, for multiple reasons. Differences in labor rates compared to developing countries like China are rapidly shrinking. Industrial strife and intellectual property theft in certain regions and cultures have become major business impediments. Shipping costs from overseas plants have been rising. Finally, the U.S. energy outlook
is increasingly bright, at least in terms of carbon-based fuel reserves, due to new shale explorations. These factors are combining to create a much healthier manufacturing environment in the United States.”

Confirming that momentum, Plex announced yesterday it had a record year in 2013, growing to nearly 400 customers representing more than 1100 manufacturing production lines. “They represent a wide range from craft beer and ice cream makers to diesel engine plants,” said Jason Prater, vice president of development at Plex. “Cloud has the potential to transform manufacturing, reducing costs while giving operations access to continuous innovation – from the shop floor to the top floor — and 2014 is shaping up to be our best year yet.”

Look forward to exciting new products and thinking from Plex. Welcome aboard!

The Innovation Dream Team

Apple has been sliced and diced in countless books and blogs to find its “secret sauce”. To me, Steve Jobs created a petri dish and threw in all kinds of rare elements – Tim Cook’s operational excellence, Jony Ive’s design aesthetic, Ron Johnson’s retail experience, Scott Forstall’s ecosystem vision, Phil Schiller’s marketing chops, and many others including Terry Gou, CEO of Foxconn, the contract manufacturer. It took a  while to gell, and likely required all kinds of ego and conflict management, but his enduring legacy is having created and managed that dream team which even with a few changes continues to do well.

I am starting to see that comprehensive “build to last” thinking show up in at least a few companies. It is nice to see Keurig with its success with single serve coffee look to apply their tech and other disciplines to other categories. Fortune:  "The question is, How do you do five, six, seven more of those in the next 10 years?"

In contrast, though I see way too many people look for the silver bullet, the plastic surgery. After I wrote The New Polymath, people suggested I write more about how to. So in The New Technology Elite I structured the book around 12 innovation traits from design elegance to paranoia, and gave plenty of examples of each in innovation settings. The new book, The Digital Enterprise is structured around business processes – product creation, manufacturing, human resources etc. Each has world class examples.

Now I am hearing some grumbles. It’s too much work – it’s P90X. Is there no simple diet for this? Is there no app for this? Can we not buy versus build slowly?

Sure there is. But that’s called process tweaking. In fact there is very good payback from that. Just take 1-2 chapters from  my book and optimize those areas.

But then don’t think you will become Apple. That’s not building a dream team or a build-to-last innovation culture. That’s just a bit more work which needs working with 10-12-15 of my chapters. But when that comes together it is a sight to behold like the 1992 US basketball team in Barcelona.

The HR “Backwater”

Remember Dirty Harry’s reaction when he was told he was being grounded and assigned to the Personnel department?

Well, Personnel has a more sophisticated moniker these days but its image in the eyes of many executives, is not much better.

That’s a shame because HR has been, surprise, surprise a pioneer in adopting many emerging technologies.It has been a hot bed for cloud applications – Workday, Oracle Fusion, SuccessFactors, Cornerstone etc. We have known for a while social HR has been hot with LinkedIn and other social recruiting.

Fortune says recruiting is a hot mobile app

The sudden, widespread use of mobile devices for job hunting has blindsided most HR executives. About 82% of the 1,000 job seekers surveyed last fall by career site Glassdoor.com said they expected to use their phones to look for jobs in the next 12 months. 

And of course HR analytics is increasingly hot as I have written here and here. Finally, as I pointed out during the Workday Predict and Prepare videocast as robotics and machine learning influence more segments of business, the HR role there will be significant.  

Few other corporate back office functions – finance, procurement etc – have been such a hot bed of recent technology activity. It’s hot enough to merit a Larry Ellison keynote at their CloudWorld event today. Even Dirty Harry would be impressed!

Oracle’s HCM suite does not often get enough press but at OpenWorld I got a glimpse at their  use of  gamification, talent analytics and video share apps for team building, recruiting and training. I am looking forward to a bit of a deep dive at their HCM World next week.

Perfecting my Passion. Thanks for Asking.

apologies to 2 Chainz, but contributors to the Technology and my Passion series are providing New Florence readers an amazing range of science and regional perspectives in their columns

Classic Rock - David Deal

Museums  - Jeanne Achille

Music - Brad Callahan

Environmental Conservation - Mark Crofton

Birding – Margaret Newman

Ham Radio – Peter Coffee

Fitness – Jarret Pazahanick

Hockey – Eric dirst

Cycling – Nick Hortovanyi

Enjoy and please consider joining the gallery if you have an interesting hobby or interest

Manufacturing and regional sourcing

When the President talks this evening people will snicker when he mentions jobs… but the encouraging reality is the rebound of manufacturing in the US is bringing back regional sourcing and associated jobs

McKinsey

Regional demand looms large in sectors such as automobiles, machinery, food and beverages, and fabricated metals. In the United States, about 85 percent of the industrial rebound (half a million jobs since 2010) can be explained just by output growth in automobiles, machinery, and oil and gas—along with the linkages between these sectors and locally oriented suppliers of fabricated metals, rubber, and plastics … The automotive, machinery, and oil and gas industries consume nearly 80 percent of US metals output, for example.

Fortune

Like many U.S. companies, Kimray has to contend with a shortage of skilled machinists. Instead of offshoring, the company, which has $230 million in revenue, offers an extensive in-house training program emphasizing math and technology to get new hires up to speed, plus continuing education. It also helps fund college tuition for interested full-timers. "I'm willing to invest in them if they will invest in themselves," says Hill.

And finally, Inc has a very nice article on the backbone of Germany – its Mittelstand – small manufacturing shops and they never gave up on regional sourcing and provide US manufacturers even more of a model to emulate

More admiration for Marc Benioff

On Sunday as I was surfing the Grammys, I  saw a tweet from Marc Benioff and I said to myself – one of these years I should conspire to get a running commentary from him on the show. With his range of contacts in the industry and the range of genres which grace Dreamforce each year his insight would make for such a rich evening.

On Monday, I see he has jumped in into the debate about Silicon Valley’s charities. Our own view on charity is closer to home, more than on corporate giving  – my wife donates to homeless and is very generous to our handymen and families – but you have to admire him for taking a stand.

Not everyone is a fan of Marc’s diverse interests or style, but as I wrote at Dreamforce, I certainly am. As a fan of Polymaths, I like colorful executives – at work and at play. 

Software will eat the world and other hogwash

I am a lifelong software guy – developer, analyst, blogger, author– and have marveled how the industry has grown around the world over the decades. The New Florence blog has number of software innovation categories, my books are chockfull of software executives and projects (the underpinnings of  many innovations in the case studies in the new book are software centric)

Honestly, though I cringe when I hear Marc Andreessen talk about software “eating the world” or now Forrester talking about corporate software assets as the crown jewels.

Software is necessary, but not sufficient, even in technology projects

People will often cite Apple’s (less publicized) software assets as its secret sauce. One word should dispel that: Foxconn. Apple would  be nowhere without the contract manufacturing that has churned out millions of devices at high quality, under tremendous time pressure, at unbelievable cost, and in impressive secrecy. Then there is its superb design team, its retail excellence, its standout marketing and on and on. Ditto with automobiles. Yes, cars today have millions of lines of code and better UX and mobile apps are making the experience much better. But improving design, innovations in material science, satellite support, many other STEM disciplines are just as important.

The world’s problems need a much broader set of disciplines

Large growth in the next few decades will come from the “grand challenges” that we face – related to climate, energy, food, water. Of course software will play a role in each – witness how even Monsanto picked up a Big Data play in Climate Corp. But we need organic chemists, marine  biologists, quantum physicists and many other skillsets besides software skills.

Software economics are concerning

While infrastructure costs – hardware, network – etc have been declining nicely, many components of enterprise software costs have remained stubbornly high. Look at IBM, SAP and other enterprise maintenance costs. Look at their partner costs. Indian outsourcers pursuing CMM Level 5 continuous improvement mandates would deliver steady productivity. That has disappeared in the last few years. Without the productivity that cloud and mobile software has delivered it has actually been a lost decade of software un-productivity.  We need much more automation,crowdsourcing, project  management discipline and Moore’s Law type price/performance improvements before we can rely too extensively on software assets.  

Here’s a thought – let’s all of us in software start thinking of feeding the world before we talk about eating it.

Three sides to every story

Dave Kellogg responds to a Bruce Cleveland post on Siebel and Salesforce and industry disruption. As he says there are three sides to each story so let me add my side to those of these very smart friends of mine:)

First of all, talking about three sides it would be fun to get the principals on a Charlie Rose show. By principals I mean Larry Ellison, Tom Siebel and Marc Benioff. It would be nice theater – for a Sunday night.

But if I was an MBA student, frankly, I would focus more on my Monday morning and focus on on-going CRM disruption. So, I would ask Bruce and Dave (both guest lecturers) to comment on

• How CRM enabled sales is evolving as customers get product info from web sources and recommendations from peers and not as much from salespeople?
• How CRM enabled customer service is evolving as Amazon Mayday and Apple Genius Bar have reshaped our expectations?
• How CRM enabled marketing is evolving as BMW and others introduce rich mobile apps which are part commercial, part game, part product brochure?
• Why TV advertising refuses to be disrupted and still manages to command $ 4 million for a 30 second SuperBowl spot?
• Do they agree with GoDaddy that the low end of SME market is still underserved by CRM vendors?
• Which digital agencies would they consider for summer or full time jobs?

and yes finally, what did they think of Larry and Tom and Marc on that Sunday night show :)

Digital 2.0

Last summer when I started to interview executives for the Karl-Heinz Streibich book, The Digital Enterprise, I presumed most would talk to me about how they are using social, mobile, analytical and cloud computing in their industries and countries.

That they did, but they kept going and going

• Daimler described robotics and M2M networks they are investing in
• Echo Entertainment described how their casinos in Australia are looking at facial recognition and other tech to better service their best customers
• GE talked “Industrial Internet” – how their wind turbines, aircraft engines, MRI scanners, locomotives and other brilliant machines are communicating with each other and with us
• Coca Cola Enterprises described a couple of extremely innovative crowdsourcing applications
• Mapfre, the Spanish auto insurer discussed how satellites have transformed their business
• BBVA’s investment bank described complex event processing and other technologies for their trading and other applications
• Deutsche Bahn described their use of 3D visualization tools
• Datev talked about how they are rolling out sophisticated digital security to their thousands of SME customers
• Nissan discussed how steering-by—wire – a concept from aviation – in their Infinitis

I could go on but I was blown away with the wide range of emerging technologies each described. Even more impressive was these are not Silicon Valley companies. They are Main Street brands that are taking “digital” to a whole new level – way, way beyond social, mobile, analytic and cloud computing.