What do your customers hate about doing business with you?

May 1, 2012 by · Comments Off 

Last summer on the highway near my home, there was a program called the Fast 14 that rebuilt 14 bridges in 8 weekends. The idea was this: instead of taking the traditional route of a 3-4 year construction project, the Fast14 used extensive planning and staging so that the actual work of replacing the bridges occurred between 8 PM on Friday and 5 AM on the following Monday.  The approach, called accelerated bridge construction* saves direct costs through efficiencies and significantly eliminates indirect costs in the form of lost time in traffic snarls and the cost of ensuring work zone safety.

I’ve been fascinated by this because it’s a great example of how the shift to the knowledge era has provided the tools to fundamentally change any business. Read more

Thanksgiving Thoughts on Agriculture and the Knowledge Era

November 22, 2011 by · Comments Off 

Thanksgiving celebrates a story that unites Americans around the idea of sharing (and being thankful) for the food and many blessings we enjoy. It harkens to an agricultural era that pre-dated the industrial era that marked much of our country’s history. So I thought this would be a good week to share a few thoughts on how agriculture has changed over the years—and how it will undergo many more changes as we shift to the knowledge era.

The systemization of agriculture made the industrial age possible, freeing workers from subsistence to production of goods.

And then the industrial age brought increased automation and “industrialization” to the sector. Today, agriculture is a perfect reflection of the design constraints and practices of the industrial era including large scale production and distribution as well as heavy use of machinery and chemicals. The underlying assumption was/is that mechanization should be used to replace human labor. In the industrial era, fuel consumption, greenhouse gases and other forms of pollution were not as important as they are becoming today.

Every day I read about exciting new developments in agriculture that reflect the new design constraints of our times and the new possibilities of the knowledge era. Here are a couple. Read more

Clay Christensen on National Innovation—and Intangible Capital

September 30, 2011 by · Comments Off 

I tweeted the other day that I was going to see Clay Christensen but hadn’t shared my thoughts about the presentation.

Over the years, I have read Christensen’s Innovator’s Dilemma, Innovator’s Solution and Disrupting Class (and have Innovator’s Prescription on my reading pile).

His ideas about disruption are very powerful. In his talk in Boston the other day, he took an issue that he said he had never addressed before: the lessons of disruption for the U.S. economy and jobs.

He made an incredibly compelling case why managers across the U.S. have continued to cede ground to lower-cost competitors (disrupting their markets) on the logic that they should focus on their highest-margin products. He pointed out several times that these decisions are totally valid within the doctrine taught at business schools today. Profits are king.

The only problem is that the disruptors end up taking these higher margin products away too and leaving the former market leaders with nothing. He used the example of AsusTek and Dell. How Dell kept outsourcing more and more of their business to Asustek until Asustek has basically moved into direct competition with Dell. You can now buy Asus branded product in Best Buy. Dell launched the business that now competes with it. Read more

Making things and the future of the U.S. economy, A Reading List

April 23, 2011 by · Comments Off 

I have been very absorbed in what (finally) seems to be an accelerating conversation in the media about the future of the U.S. economy. The catalyst is the budget story in Congress but even more, the fact that the recovery doesn’t feel that strong. And the fundamentals are still pretty scary.

U.S. policy and business practice have not focused on the role of manufacturing in our economy. I think there is a lot here we need to understand. Here’s my recent reading list on this subject: Read more

Book Review – The New Capitalist Manifesto

April 19, 2011 by · 2 Comments 

I’m a big fan of Umair Haque’s blog (and have always gotten a kick out of the fact that the blog is on the Harvard Business Review site—they aren’t usually this radical…)

Anyway, I had been dying to read his new book The New Capitalist Manifesto. There were some great ideas here…Like his explanation of the societal cost of things like burgers (a $3 burger includes $10 in health and environmental costs) and $10 of subsidies of water, land and jobs) and oil (hidden costs add $4/gallon the price). Read more

Competition vs. Collaboration – A warning for us all

March 23, 2011 by · Comments Off 

I heard this interview of Diane Ravitch on NPR in the car the other day about why she went from being an advocate in the Bush administration of No Child Left Behind to being a strong critic. Her logic:

“There should not be an education marketplace, there should not be competition,” Ravitch says. “Schools operate fundamentally — or should operate — like families. The fundamental principle by which education proceeds is collaboration. Teachers are supposed to share what works; schools are supposed to get together and talk about what’s [been successful] for them. They’re not supposed to hide their trade secrets and have a survival of the fittest competition with the school down the block.”

This is a great reminder for us about strategic thinking in so many spheres. The power of knowledge in the intangible capital economy Read more

End of the industrial era for agriculture too

March 9, 2011 by · Comments Off 

The end of the industrial era isn’t about the end of industry. It’s about the end of the industrial model.

Here’s a great explanation of a new, knowledge-era approach to agriculture that’s more sustainable and healthy.

Sustainable agriculture actually addresses a lot of the 21st century design constraints:

2 – Leveraging local talent
3 – Creating local jobs
4 – Minimizing energy use
5 – Minimizing/eliminating waste
6 – Maximizing health and wellness

Pretty good scorecard. It will be a huge shift but it makes sense in our new world.

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Carbon labelling on food addresses design constraints 4 and even 6

March 9, 2011 by · Comments Off 

If you start carbon labelling food, you will help people understand the heavy load from fertilizers and transportation in the industrialized food system. This addresses the new design constraints for the American economy:

4 – Minimizing energy use

and, I would submit, 6 – Maximizing health and wellness (since foods like meats and processed foods generally have a higher carbon count than fresh foods)

Could Evergreen Solar keep its U.S. plants if it applied the new design constraints for American business?

January 15, 2011 by · 1 Comment 

A few days ago, I wrote about some new design constraints that I believe should shape corporate thinking about innovation. Today, my friend Ken Jarboe at the Athena Alliance sent me a link to this article about Evergreen Solar, a company located here in Massachusetts. This company built a manufacturing plant for solar panels in 2008, created 800 local jobs. Now, the company is closing down the plant and moving production to China. Ken asked me how this case fits into the standards I laid down. (It’s a hard question but I appreciate Ken asking it). So here goes.

First, I want to say that a big part of the story is the imbalance in the support that the Chinese government is willing to give to get the plant built there versus the support the government of Massachusetts and the U.S. is giving. I always get a kick out of this kind of argument because it demonstrates the hypocrisy we often see in American politics: taxes and government spending are bad. But if someone else’s government does it, we have no choice but to take the money. In this thinking, you get the short-term cost savings and worry about the long-term implications later.

In Evergreen’s defense, it is behaving consistent with the current mindset of the stock market and the still-dominant although highly discredited (see comments by Warren Buffett and Jack Welch) approach to maximizing shareholder value that we still accept as gospel–over the last thirty years, the concept of value somehow got to the point where short-term stock prices came to be a measure of how a company was husbanding its resources and building long-term value. Read more

Design Constraints for a New American Economy: Why Boeing and every other company has no choice but to change

January 13, 2011 by · 6 Comments 

If you follow me on this blog or on twitter, you know that I worry about jobs and the U.S. middle class. That’s why it may seem contradictory to take the position I did in my recent post on Boeing.

Boeing is in the midst of a grand experiment with its 787. It has “outsourced” a greater degree of design on a scale that is unprecedented. What they have essentially done is create a connected community where suppliers of parts and subcomponents of the jet can collaborate. The individual suppliers are empowered to come up with the best designs they can. Boeing’s job is as a convener and catalyst for the network. The approach reflects their belief that their core competency is in design coordination, assembly and marketing of planes. The belief is that each supplier is more expert in their field than Boeing and, therefore, better equipped to optimize and innovate its piece of the overall product.

But the experiment is not going too well. It hasn’t failed but it has had a lot of delays and problems. So there are lots of people critiquing the whole project. Of special note are the critics who fear that Boeing is letting loose the knowledge of how to build big airplanes and that they (and by extension the U.S.) will never get back. This is not that different than so many other U.S. industries that have outsourced and moved more and more of their production off shore.

Here’s my position. Read more

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