Archive for the ‘Future’ Category

“Companies in the rich world are confronted with a rapidly aging workforce. Nearly one in three American workers will be over 50 by 2012, and America is a young country compared with Japan and Germany. China is also aging rapidly, thanks to its one-child policy. This means that companies will have to learn how to manage older workers better. It also means that they will be confronted with a wave of retirements as the baby-boomers leave work in droves.” (Source The Economist)

So what does this mean for decision makers like you? Two issues. First, in terms of rising up the management ladder, great opportunities are available for innovative thinkers who continually self-educate and build upon their leadership strengths. Are you armed with the right and best mental tools, processes, education, skills, etc. to be able to go beyond the basics of leading and managing others? The winners of tomorrow are building their management ‘tools kits’ today, because they know that in tomorrow’s world even more so than in today’s, they’ll be forced to CREATE opportunities, not just capitalize on existing ones.

Second, in terms of succession planning and building current leadership teams within today’s organizations, the aging workforce means that you’ll have fewer qualified candidates from which to fill open leadership positions, so you need to start  building the leaders of tomorrow now rather than expect to pull these candidates from the currently fast-evaporating pool.  What systems and processes do you have in place to hire the highest-potential candidates, empower others to work independently, achieve results through others, and most importantly, to attract prospective leaders who THINK in ways that capitalize on and create new opportunities?

This issue of the aging workforce–and specifically, the aging leadership force–doesn’t have to be a negative challenge. In fact, taking steps now can give you great advantages over two kinds of competitors: individuals who are vying for the same job positions as you are, and organizations that your organization competes with in the marketplace. In a nutshell, begin with acquiring mental management tools for yourself and then teaching them to others. Here are three examples to get you started:

1. CPM and Ghantt charts that help leaders organize projects, inform and direct the activities within projects on a time line and according to budget, and keep projects on target for completion as planned.

2. New product and service development tools which help you in the selection of best product/service ideas and pull together cross-functional groups to provide input and support throughout the development of the product and service to outpace competitors.

3. Strategic planning processes that structure the ways in which you and your leadership team(s) strategize to move your organization forward not only today, but into the future.

Of course, you probably already have some ideas floating around in your head about other options, too. The key is to formulate a plan and act on it now. Don’t wait, the opportunities arising from the aging-workforce issue are here for the taking.

United Breaks Guitar video goes viral on YouTube with 3.5 million hits.

The issue with this video is more complex than just damaged guitars; it’s that the industry is still in the Stone Age when it comes to operating everything but the planes.

First, the airline industry could easily borrow technologies from other industries to cut the handing of baggage in half by employees. The problem is very much tied to baggage handlers being unionized. There is very little incentive to replace people with equipment and yet if UPS and FedEx worked in the same manner as the airlines do, you’d get your packages a week later.

The solution is baggage that is tagged at the gate and then transferred via RFID (or some other technology) to the plane and then in some situations directly into the hull. This would require sophisticated technologies and cooperation between manufacturers and firms that manufacture robotics and conveyor systems.

The benefits would be huge. FOD (foreign object debris) would be drastically reduced for airlines. Payroll would decrease and so would Workers Comp expenses from bag-related injuries. Passengers would get their baggage to the plane without damage, as well as receive the baggage at the other end. Tracking and total weight can be accessed at any time for CG, the weighting of a plane. The list is endless.

One may argue that the airlines are not doing well, and I’d argue that the airlines are in this position due to poor investment in technology, poor contracts with unions, and poor orientation to the future. Some of this tied to, in the US, the government’s handing of the industry including air traffic control systems that should have been updated long ago.

The good news is that if innovation curves are any indication of the future, the airline industry will be forced over the course of the next 50 years, to either make significant technological changes to keep pace or find itself prey to industries that will,  such as improvements in holographic and digital meetings that eliminate the need for business travel. In other words, business travel, which provides a huge source of income for airlines, will be reduced and/or other modes of transportation will gain traction.

A bullet train from Boston to Washington DC or from San Francisco to San Diego and many other traffic lanes could reduce air passengers.

It’s a shame, because I love to fly.

Get this.  The APTA wants donations to help promote scholarships in the industry.

The American Public Transportation Foundation
Please “champion” the effort to ensure the future of our industry!
Dear Colleague:

We face a critical shortage of skilled and seasoned employees as thousands of workers from the “Baby boom” generation near retirement. We need to provide incentives to attract the  best of the best of our emerging talent. Your 2009 Champion gift will help achieve that goal, which in turn will helpus plan for a healthy, vibrant workforce. As you know, The American Public Transportation  Foundation provides scholarships for young professionals pursuing careers in public transportation. Your support will make our industry stand out from all the others. Our goal this month is to raise $5000.

….and yet when it comes to making our public transportation system stronger, they have been lacking in leadership.  Industry leaders are no closer to improving the transportation system then they were years ago.

Here is a sampling of what I recommended to the industry at a keynote to APTA’s executives.

US public transportation needs four factors to achieve 10+ % ridership:

1. Universal payment system. (You should be able to use your card in NYC, San Francisco and Atlanta and your own community as a universal pass.) This little switch would enable users to keep only one card in their pocket and most likely try another service around the country.

2. Connectivity of community public transportation systems with other communities (County roads, bridges and infrastructures, link to the next infrastructure. The same is necessary in order to increase ridership. Currently the systems do not connect.) Currently you can’t travel from Seattle to San Diego or Atlanta to Boston without jumping to an Amtrak or another service. It’s like building a bridge only half way and then stopping in the middle of the gorge.

3. Singular transportation guides throughout the system. (There needs to be one universal travel guide so that like airline travel, no one needs to relearn how to use a system.) I know I personally dread trying to figure out the maps in each city. Airlines have one system and so should the public transportation sector.

4. Transportation authorities need to be established. (Today, road and mass transit are at odds over how to use funding. With a transit authority the objective of the organization is to serve the public transportation needs in the best manner possible.) Right now the road and highway industry is 10x more powerful than all the other services so when it comes to funding. They get 90% of the pie even if it’s not the best use of the money to move people in that region.

5. Lastly, the future of public transportation will never improve until the industry moves from viewing that there are two types of users to three. Currently there exists the lingo that there are people with CHOICE and those Without Choice. With choice means they can use alternative forms of transportation, however, if gas goes up $1 per gallon, they might move into the Without Choice category. Obviously these users have only one method to get to work, shopping, visiting the doctor, etc. The group I suggested the industry see in the future is the group with MEANS. These are the people who earn $1 million per year and use the NYC Metro to get to work in the morning. These are the people with political clout and financial capital who would insure that NYC never closes the metro system.

What this means to the industry is “density” must be defined differently. They may get 50 people on the train in a low-income neighborhood and 17 people from the high-income community. The difference is the high-income travelers will make sure that there is a system at all for two reasons. They will be aware of the product AND it’s self serving. Their kids use it every day. (For those that don’t know, the industry looks for density of population to determine service development.)

Wow…I love technology that pushes us to think bigger. If this…then what’s next….!!!! Blood flow to the brain…who would have thought!

In the post-internet boom, the world witnessed a transformation of working arrangements.  Foreign employees of firms such as IBM were laid off only to find themselves returning back to their home counties to live once again.  When business volume increased, employees who were still working knew that they had a friend who used to be in the business who now lived overseas.  Given the cost of living difference, the past employee said, I’ll do the work in my home country and charge you a different rate.  Due to the connective digital lines under the ocean, the work could be easily completed.

We’re now seeing a similar condition, only the employees who are either being asked to work from home or are being laid off live down the street.  Just picture a similar scenario happening all over again, however slightly differently.  Firms such as Nissan Motors are asking employees to work from home because their physical building is too costly to operate.  With advancements in video, audio and virtual private networks, the same individual no longer will have a tangible office to return to.  They are now part of the virtual workforce.

Those laid off will face a similar scenario to the post-internet boom. “Carol has been laid off and already knows our business.  No need to re-hire her.  Let’s see if she will do this job as a part-time, outsourced employee?”  With the rise in unemployment rates and the likelihood that many people will be out of work for a long stretch of time, employees like Carol might jump at the chance to earn income once again, even as a part-timer home-based employee, forever changing working relationships and conditions.

The outsourced and virtual company is no more than a decade away.  Add some holographic meeting space, and we’re going to see this type of dispersed work structure as more common, because of the recession…depression.

As the global recession spreads, so, too, will more decision makers  move employees from physical offices into virtual work-at-home offices.  The trend will mimic that of the post-internet boom in the early 2000′s.

July 15, 2008
TODAY IN MANUFACTURING.NET
“GM ANNOUNCES MAJOR SHAKEUP — Automaker will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.”

That was last year, and what I had to say about it then–see below – written July 2008–is even more relevant today.

To me, while Honda and Toyota appear to be selling cars, GM, Chrysler and Ford continually make announcements about restructuring, slow sales volume, economic challenges. In all these reports I fail to see anyone taking responsibility for being globally blind.

Or should I say American Blind. Blind to the truth that while the Detroit Three were ramping up large truck sales the rest of the world sees a much different picture. China and India with over 2+ billion people are on the verge of the transportation age where individuals could purchase cars as a middle class. Gas in all countries except the US, even prior to the rise in fuel costs, was significantly higher than the US. And while Americans were doing well, there should be a transition in the next decade to smaller vehicles just because those having children will be empty nesters along with a very large senior population. Mind you small is relative as American most likely will opt for a “larger” smaller vehicle.

All these signs, as powerful as they are to everyone today, should have been seen by those in management of the automakers.

Toyota saw the writing on the wall when they, over 10 years ago, committed to producing fuel efficient cars. Toyota, understood this as they announced one of the cheapest cars on the planet realizing that even though India and China are growing, the vast majority of the people who live on this planet still don’t own cars AND that the cars they will be able to afford will be smaller.  TATA, an Indian firm, has been working on the introduction of a $2000 vehicle to target this market along with other developing markets.

Think Africa, think Malaysia, think Pakistan….

Even the poorest WORKING Americans earn more than 90% of the world’s population. I’ve heard numbers that if you earn over $20,000 US you are in the top 3% of the world so now picture car purchases in the near future.

The point to all this is that we’ve been a global world for a long time, not just in recent years. The ability to see beyond the four walls of the US should be on the minds of everyone who is Paid to Think™  in the US. Thinking about how in the near future, the inter-connectivity will exacerbate economic decisions. That those who still believe that by sticking one’s head in the ground or those who’s perceptions of others with different color skin and different beliefs are beneath themselves, so much so that their ignorance or lack of vision, will ultimately cause create bad decisions and eventually create other Big Threes.

There is a land of opportunity, just don’t be blind to the global possibilities.

A Director at Siemens, one of the few windmill manufacturers in the world that supplies those huge 144-foot fins unused on large-scale wind farms, recently told me that just as the finishing touches on a manufacturing plant were completed, their sales blew through the roof  so much so that they already had overgrown the facility.

My first thought was is this connected to the problems related with India’s Suzion Energy’s troubles with stress fractures.  One of Suzion’s several customers,  Edison Mission Energy, has had stress fractures.  In Edison’s case, over 1251 blades were recalled.  If consider how the blades are 144 feet long and must be hoisted over two hundred feet in the air to be installed or removed, you can imagine that this is a costly problem for both manufacturer and customer.

The end result would be, since this is public news, that other prospects would most likely choose another vendor and contracts for production would be canceled.  Add to this the down time associated with such a fiasco since no energy is being produced.

So I asked, “Was this related to the blade recalls from the Indian company?”  He hadn’t heard anything about the troubled firm.

My thoughts are simple on this. Part of the role of management is to be aware of key issues related to your industry, markets or future.

In this case, this Director was not responsible for marketing, sales, or engineering, but he was responsible for Asset Management.  His role is to search for or build new facilities to meet corporate initiatives. As part of his portfolio he might have 200 real estate assets he’s managing besides building new facilities. So it would be easy to say, he’s only responsible for the physical asset.  And if he does this right, he’s done his job.

People who are Enterprise Thinkers and are Paid to Think, think beyond the normal and realize they must at least be aware of any happenings that pertain to their job and beyond, as well as what might impact their future.  They see the 50,000 foot view and realize they are not hired to just build a plant but to build a plant that takes advantage of today’s business and the firm’s future.

In this case, when a major supplier has a recall, you’ve got to bet that other customers could be canceling orders and shifting suppliers, which is exactly what happened.

Here are a few ways he could be “Aware.”

Set up a Google Alert for the industry key words.  I for example have the words “Paid to Think,” “Enterprise Thinking” and a host of other topics or phrases I’d like to get reports on regularly.

Another source is to subscribe to industry publications that would highlight such issues.  In this case, this was a multi-million dollar facility that casts fins with fiberglass, balsa wood, and a binder.  Yes, I too was surprised to find the balsa wood is in the fins.

Lastly, for a few dollars a month, he could hire researchers to keep him posted on any topics related to this project.  There are PhDs in India, China, Ukraine, and Argentina that will work for very little as a resource.

Just being aware of what’s happening could easily have changed the future of Siemens’ project plants; even if they made the decision not to do anything, this would have been a result of being informed.

Sources Siemens Windmills and WSJ  India Windmill Empire Begins to Show Cracks

US Republican Senator Charles Grassley said that he would feel better if AIG’s top managers were to take a page from Japan’s corporate management book.  In Japan, failed execs apologize, step down, and oftentimes commit suicide.  The suicide part of the equation hit a raw nerve with many.  Grassley, unfortunately, misdirected his anger. The employees of AIG, who were to receive $165 million in bonuses, are receiving contractual bonuses, good or bad, like it or not, using funds supplied to the firm by congressmen (in the house and senate) who did not do their homework, or worse yet, ignored facts that were public knowledge back in May of 2008. This is the US Congress’ problem, not AIG’s.  But our government is so used to spinning everything, that they can’t give us straight talk.

Now today, members of our US Congress, in a backlash for their own errors, want to tax individual bonuses for those working in firms that received $5 billion or more. This leadership back peddling does not exemplify leaders who are forward thinking and accurate in their execution, but leaders who believe that they know it all and then play politics when the house of cards falls. If mismanagement of taxpayer funds is the crime deserving punishment, then we should tell congressmen that they, too, should say they are sorry, give back their income, and then fall on their swords. Whether we’re talking about an annual income of one hundred thousand dollars or one million, the rationale should apply to everyone in America if the congressmen are as “American” as they espouse to be in the media.

Here’s the history. On May 8, 2008, AIG disclosed in an SEC filing their plan to pay bonuses.  This information was available while congress deliberated about saving AIG. No smoke and mirrors. On Sept 16^th, $85B was approved as a two-year loan to the institution. In doing so, congressmen made the assumption and the case that AIG needed the support to cover insurance obligations, without completely understanding the complexity of AIG as a corporation, and how some of the funds had to pay payables such as START. Congressmen did not do their homework; if they had, they would have realized that AIG had to continue repaying any obligations it had on its books, not only the programs that congressmen wanted supported.

Mirror this with TARP funding. In haste, congress approved the TARP package to help ailing firms to shore up the economy. In the end, the financial firms that received the funding have given out bonuses in the billions such as Goldman Sachs Group, Morgan Stanley and Merrill Lynch’s distribution of over $36B in bonuses. That’s 173,000 employees without including JP Morgan Chase Citi Group and Bank of America. Don’t forget there are other bonuses that have not made the news.

The reason this unfolded as it did, is that the funding came from congress with no detailed plan as to how the funds should be spent, only the inference that the funds should be allocated to shoring up the housing market. This was a congressional error in leadership as both in the understanding that if you give a firm money it’s tough to ascertain what money goes where and how. Some funds go to operations, some to sales and marketing, some to conferences, some to salaries. Most Americans knew this, so why didn’t those in congress?

What’s even more ironic is the same congressmen also passed, along with President Obama, another trillion dollars worth of spending with 8700 earmarks. In many cases, the earmarks are far worse than the million-dollar bonuses. The only difference here is that theft, and there will be theft, will happen in small amounts all across the country as friends give out deals to friends, quotes are elevated and policy is changed to fit who ever the legislature favors. In my home town of Syracuse New York, our city council just witnessed a NO-BID $8+ million-dollar renovation project for Syracuse’s Hancock International Airport. To allow this to happen, the council also voted to change limits on other policies so that the vendor could take the project. They changed the law to fit the funding?!?!

Lastly, since Rep. Barney Frank is very vocal about most of these policies, then he, too, must fall prey to telling the world he’s sorry , returning of funds, etc. Rep. Frank had his hand in the development of the policy that directed Fanny and Freddy to purchase additional home loans that spurred the housing boom, that created housing wealth, that allowed individuals to pull out “equity” to buy pools, furniture,  vacations, and to invest in the market, that assisted in AIG’s growth and helped to allow Credit Default Swaps to work and CDO’s to be created. And even if some people argue that he didn’t have a hand in some of these problems, he played his part, and in doing so, accepted tax payer money as income and used tax payer money in an inappropriate manner. I don’t have to add, but I will, Rep. Frank pushed for TARP, the Stimulus package and the recently pork-filled “government continuation bill.”

Now add the new 90% SBA loan backing and the $300B in funding to stabilize the mortgage industry, and I believe Obama’s administration and congress are going to be condemning a lot of other executives and employees in years to come. Our own American three-ring circus.

The question is, will congress act in haste through the next 3 years and 9 months and in each judgment error they make will they act as irresponsibly as they are acting today? Congress might even want to have a conference outside of Washington at a 5-star resort to discuss the issues.

This is all just mismanagement, and if it’s to ever stop, we need to require that those in congress slow down, spend more time thinking and less time in front of the cameras, and figure out what the best strategies are to take, including the TACTICS on how the policies should be executed. Remember, these people are PAID TO THINK and they are doing a poor job on both sides of the aisle.

I expect more from our youth than I’m seeing from our public servants. I’m expecting an “I’m sorry” and a return of their paychecks!

I love all news coverage given to the, soon to be dolled out bonuses of $165 Million to AIG employees.  I love the coverage because this is actually old news.  AIG’s management knew that they’d be handing out bonuses to employees as far back as last year. The reason, the bonus contracts were already signed and the ink dried.  Besides, senior management had to use these numbers when creating projections as they when they requested TARP funds. (Bonuses may have been rolled into other expenses to defray comments or lending restrictions.)

Remember, they are financial institutions run by the very same people who were to be receiving the bonuses.  This required the management to be very clandestine in developing tactics so that their expected bonus income would not be in jeopardy.

It’s the same tactic Merrill Lynch & Co.  employees used when they issued $3.6 billion in bonuses.  Keep quiet, have secret meetings, sign the checks and then see what Cuomo or any other government official can do to rescind the payments. Their belief was, distribute the money and then see how the game plays out.

So far the tactic’s worked for Merrill’s former employees.  Bank of America won’t release the names of the recipients and the global public heard little about how or if the bonuses will be affected. AIG is using the same coaching handbook.

What’s even more disturbing is that Obama and Geithner only released this information today. Hours before payment, Before anything could be changed in the loan provisions for AIG. To believe that Obama or Geithner had no knowledge of the situation is the equivalent of a physician not knowing that the heart pumps blood.  It’s the mechanics of how B of A, Chase, Merrill, Bear Sterns, Goldman Sachs, Morgan Stanley and all the other firms hired and fired their staff. Obama and Geithner had to have known this information otherwise Geithner is useless in his position and Obama is not connecting the dots. Government and AIG all participated in the charade.

So the next time you hear about the mismanagement of funds in either the stimulus package or the TARP funding, ask yourself the following questions.  1. How long ago was the information being released actually known about and by whom? 2. What decisions, both strategic and tactical, did those managing the process make to allow this to happen?  3. What would it have taken for those that are PAID TO THINK to have stopped the wasteful spending of taxpayer money from happening in the first place?

It’s my belief that those in government are PAID TO THINK.  Their job is not to build the roads or work in the schools but to think things through all policy well enough so that the future is better than the present.  This is not what’s happening at least for everyone who sitting on the side lines watching not just the $165 million convert to paychecks for a few, but the billions that have already traded hands.

This will happen again!

NOTE: (Over 70% of the worlds largest public companies do not have this bonus structure!)

“There is not the slightest indication that [nuclear energy] will ever be obtainable. It would mean that the atom would have to be shattered at will.”

Albert Einstein