Royal Wedding to give boost to several industries in the US – including US Post!

You really can’t avoid following the royal wedding with every US TV channel having positioned their top reporters in London who are reporting live for the last several days. The fascination of  Americans with the royal wedding is amazing with the air routes busy to London as travellers spend thousands of dollars on travel,stay,souvenirs and so on. The US market for several industries should see a business spike. Some of these  include:

  • Hats: Look around and see the unusual number of hats on the street. And not just Fascinator hats.
  • Wedding and Wedding Dresses: Do you remember all those weddings that got cancelled in Louisiana with the BP oil spill? You can be sure that there will be a spike in weddings and the resulting economic benefits that hotels, dressmakers,florists get from such business.
  • English Tea: Tea will certainly see more sales in the US but I am not sure that cucumbers for sandwiches will sell more in the US as in the UK these days.
  • Local restaurant celebrations: This  is becoming comparable to watching the Super Bowl, just see  what restaurants  in Austin,Texas   are up to.

Just the fact that a Government organization like US Post has got its offering out in an  alliance with another public sector organization British Royal Mail is hugely interesting from this blog’s point of view!

About StratoServe.

Homeowners face double dip decline- why are two markets doing better?

The US home prices are at their lowest level since April 2009 when they were at the last dip. Nineteen of the twenty markets in  S&P Case-Shiller Index. There is only one market that is doing better and that on a year to year basis is the Washington DC market while Detroit did better for the month of February.

That the Washington DC market is doing better is not a huge surprise, given federal opportunities. However, the Detroit market had tanked at 30% lows ever since the decline of US auto since 2000. Now that GM is doing well there is news that GM,Ford and Chrysler will hire 36,000 by 2015, mostly in Michigan so the real estate market should do better.

Until there is definitive solidity in employment and  income prospects,  it is unlikely that we'll see improvement in the real estate values. Meanwhile affordable rentals will continue to be in demand as younger  folks are unable to commit to mortgages and buy real estate.

The connection between gas prices and innovation – share what you learn for every trip

The current US pain at the pump in the form of high gas prices impacts innovation. Let me explain how.

Even with all the social media and Internet that last bit of crucial understanding and "feel" for something does happen by being there. This has a lot  to do with the "sticky" nature of knowledge. Just think of the number of times you actually see something or do something and change your earlier assumptions. This change of assumptions happens when you are "there" and gain a completely new insight, a new lead, a new way of looking at something which opens completely new and exciting vistas.

When you have high gas prices, you cut business trips and  tend to miss events and meetings that don't seem worth the expense, you can always talk on the phone or email- you rationalise. The latter can have a huge downside because you loose out on the picking up of sticky knowledge that leads to innovation. My favorite example of this kind of sticky knowledge is from the book Knowledge Creating Company by Nonaka and Takeuchi who recount the development of a bread making machine  by Matsushita where they have a difficult time in getting the bread to come out soft from the prototype machine. Tanaka the engineer, becomes an apprentice with the head baker at Osaka hotel and observes that during kneading of the dough the baker seems to twist and pull the dough. Tanaka tries to program the baking machine to replicate the baker's kneading technique and the baked bread comes out great ! The baker had provided all the information about ingredients,temperatures,process,recipe  but had  not realized that the "secret" was the kneading style he used. Since Tanaka was already struggling to solve this "hard" bread problem she was able to pick up the baker's technique being "ready" to "see" what she had been missing working on the software of the machine.  And it is this "seeing" freely that is hugely impaired when travelling costs soar. You simply cut out "non essential" travel and that tends to become all kinds of travel.

Today companies have cut travel budgets that involve  air travel and attending a meeting and claiming frequent personal reimbursements is not considered a smart practice  for an employee  who is reluctant to come across as "expensive".  Companies must  continue to encourage employees to travel by road to customers,suppliers and professional meetings to keep up the  capture of elusive sticky knowledge in their field.

To appear "productive" the employee can try and  share "one insight" he/she picks up from such travel by a simple email/ social media update  to colleagues and the boss. This way the company paying for gas will find it  less painful and driving for meetings will seem less like a crime! Innovation will get a chance…..

What do you know about Rakesh Kapoor of Reckitt Benckiser?

I am surprised at the the approach of Bloomberg who seem to somehow underestimate Rakesh Kapoor as a CEO succeeding Bart Becht at Reckitt Benckiser.

Normally this blog stays with stuff in the public domain  out  of respect for privacy.  But I  guess CEO's  of major companies are public figures and this being a time of celebration, let me tell you a story about  classmate Rakesh Kapoor  from BITS Pilani .We were trying during 1976-77, to deal with the banning of student unions in India in the wake of Prime Minister Indira Gandhi having declared a state of emergency. In an extremely volatile political climate four members of the fledgling BITS Skit club sat together to devise a skit to depict the electoral situation. Within 15 minutes, Rakesh (then 17-18 years old) came up with the "Phantipu" concept. We produced a skit to hilarious results about Phantipu, our version of the grandson of the legendary Tipu Sultan   based on   Phantom  the ghost who walks, who was infact contesting an election with the then dictatorial prime minister Indira Gandhi.

The skit went on to win the first prize among over 50 contesting teams at the time and no student got arrested.  That was remarkable because 90% of every category at the cultural festival  (western music,indian music,theatre or whatever) would get heckled and booed within the first 30 seconds. It's just an exuberant teenager thing, I now understand.The point is that at 17 years of age Rakesh could navigate sensitive political toes with  an extremely sensitive topic at a volatile political time with outstanding  success.

Over the years Rakesh has grown and developed from an extraordinary 17 year old undergrad. Being India born should serve to Rakesh's advantage as global emerging markets develop. I am sure there would be similar  fun "achievements" from school days  of Turkish origin Muhtar Kent of Coke or India born  Indra Nooyi of Pepsi and Rakesh Kapoor  should compare well with both Muhtar and Indrya as he takes Reckitt  Benckiser to new heights.

Best of luck Rakesh!

Air traffic controller “fam” trips with pilots a great idea- pilots should also spend time at the control room

This has been a tough spring for air traffic controllers and the FAA who have been literally caught napping,  getting the First Lady's plane too close to another and watching DVD's on night duty and letting alarmed pilots hear the sound of the movie "Cleaner" for three minutes. So the re -institution of"fam" or  "familiarity" trips for air controllers accompanying pilots is a great move.

The fam trips were suspended for security reasons since 911 and will help the air traffic controller "make sense"of the pilot situation in the cockpit as a plane comes in for landing."Sense making" in organizations is a great insight from Karl Weick.

In 1993, Karl Weick and Karlene Roberts published a very influential article as to why on aircraft carriers  decks that are slippery,oily, tilting and dangerous in bad weather there are almost no aircraft  "fender benders" . This despite hundreds of aircraft that are being controlled by only the hand movements of 20 year old air traffic controllers on the flight deck with no radios,mikes or electronics. The many pilots intuitively understood what the controller meant by a particular hand movement and the young controllers seem to have a great intuitive sense of how pilots operate  and "make sense" as they land  on the aircraft carrier deck.

Compared to the challenges of landing on an aircraft carrier, on land airports in good weather are easy.It is likely that all the sleepy air traffic controllers fell asleep because there were no traffic or weather challenges on those days. Getting air traffic controllers to watch pilots landing from the cockpit will create the same kind of "Collective Mind in Organizations: Heedful Interrelating on Flight Decks,"

However, to really get benefit from the fam exercise FAA should also get  night pilots to spend some time at night, at slow airports ,in good weather just to understand how dull and boring the air traffic controller's job can be, at times.

In other words, on an aircraft carrier as in the Weick and Roberts (1993) study the pilots and controllers were  metaphorically  and physically on "the same boat," and thus hugely successful. The fam exercise should also try to achieve  a similar  effect between pilots and controllers on land.

One year anniversary of BP oil spill: Was it the Blow Out Preventer (BOP)?

Today is the one year anniversary of the Deepwater Horizon oil spill that had devastated the Gulf. Things look much better today but the mystery of the Blow Out Preventer (BOP) is not resolved as BP sues Cameron for the BOP failure.

Cameron the BOP supplier claims that  “Hydrocarbons had entered the riser well before the crew attempted to activate the BOP, and even a perfectly functioning BOP could not have prevented the explosions.”  Government forensic investigations indicated  that the BOP pincers could not seal off  the slightly off center drill pipe. That there was something wrong in the pipes that caused the BOP to malfunction is also indicated in a Norwegian test report says Reuter. BP's position is that the BOP did not do what it was supposed to do, ie prevent a blow out!

The Senate hearing that this blog reported seems a long time ago but brings us back to some fundamental B2B and supply chain questions as illustrated by the Cameron/BP/Transocean tangle:

  1. Suppliers like Cameron supply a product according to the order specifications. If the buyer does not  explicitly consider the thick pipes very deep underwater use situation, should the supplier bring this up?
  2. Do the engineering folks at  the off-shore user end  of Transocean/BP clearly articulate the uncertainties of very deep drilling to their onshore supply chain people so that  a better BOP product specification is developed?
  3. Should both buyer and seller think about the "product in use" challenge ?  For example, thick pipes that could possibly get misaligned,deep under the sea and  cause the BOP to malfunction.

Too often in the B2B and Supply Chain world everyone involved is just happy to develop order specifications on the buy side and meet specifications and get paid on the sell side. Without really considering the installation,use and use conditions.

Meanwhile the answer to "Was it the Blow Out Preventer"? will continue to  elude us.

What can you learn at a McDonald’s job or McJob ? Plenty…

With 50,000 jobs on National Hiring Day there were long lines of applicants today at McDonald's what with high persisting unemployment.  The McJob is mocked in popular culture  because it is seen as "flipping burgers"  or saying  hackneyed cross-selling lines like "Do you want fries with that?" Given that McDonald's have come forward with jobs that are much needed it's time to  re-look at the much maligned "McJob."

Apart from opportunities of rising in the company- which is the  official McDonalds' pitch, I think there are huge opportunities for learning business that is often missed by the student McDonald employee  that one encounters in the classroom.

We must appreciate that among  QSR chains McDonald's has the best franchising model and processes that work at the restaurant level worldwide, remarkable given that 90%  are franchised. From Australia,Europe to Asia, Africa and the Americas the customer  does  get a predictable,uniform  experience.  Wayne Lebrun in the video, must have  learnt early on the job before going on to own seven restaurants in Massachusetts. Learning opportunities include:

Customer Service : Ray Kroc the founder of McDonald's famously wanted front line employees to be always bending to keep counters shining and clean or serving customers. How is this achieved today with the use of technology as the order is transmitted to the kitchen from the counter is interesting. Also interesting is the drive through operation  and its execution,between rush and slow times,  right from the order taking point to the   preparation, payment and drive through layout.

Supply Chain and cooking process:  The supply chain is highly organized and just learning the processes of unloading supplies, refrigeration, handling and cooking standards  from the store's perspective is worthwhile.

Promotions and coupons:  Which promotions work best and how the coupon redemption works is another area which an observant employee  should pick up great insights.

Today's new McDonald's employees have a good opportunity to see and learn a great system from the inside.

How did Lowe’s at Raleigh NC save customers from the tornado? Store manager as ship captain

At a DIY store like Lowe's or Home Depot all customers  see  themselves and others as experts of some sort. So as the tornado is at the front door and Lowe's managers are trying to get everyone to the rear of the store and safety, a customer yells that "this is no tornado" and people start going forward again. Luckily, Lowe's employees prevail and get them back and out to safety with 5 seconds to spare as the roof is blown away. So how do store employees do such great stuff?

The Lowe's manager's name is Michael Hollowell and the assistant manager is Bobby Gibson interviewed here with customers Gary and his wife.  They ascribe the successful evacuation to the training that the employees had and the leadership of Michael Hollowell. If you think about it , the store manager and his team acted as a captain and crew of a ship that is in danger and helped customers in an extraordinary manner under extreme time pressure.

The team building and training at this store is truly inspiring.

Antibiotic resistance across the food supply chain differs between developed and developing countries

A new study reports that over half the meat on US grocery shelves have high levels of bacteria and these bacteria are drug resistant. Seen with the  news that the World Health Organization's 2011 theme is   combating "Antimicrobial Resistance and its global spread," there are interesting food supply chain issues that are different in the developed and developing world.

In most parts of Asia,Africa and Latin America you will find subsistence farmers growing animals in one's and two's. Hardly able to feed the animals the farmer simply does not have the resources to pay for antibiotics as a sort of  vaccine before the animal is actually sick. Down the food chain from the farm,there is uneven refrigeration in transportation and distribution .As soon as any human being feels sick  doctors start antibiotics even as upstream food processing and infrastructure is being developed. For example,a throat infection might be viral  and go away without antibiotics doctors take no chances and prescribe stronger and stronger antibiotics as the bugs outsmart the original penicillin.

Just as the huge egg farms, western farms are very large and antibiotics are given as a sort of vaccine to prevent infections,it appears, from today's report . Doctors in the US normally hesitate to prescribe antibiotics to humans (hence "free antibiotics" with a prescription at some grocery stores) unless there is evidence of bacterial infection. The trouble off course is that the animals have antibiotic resistant bacteria.

An interesting though serious paradox with animals receiving high antibiotics in many countries and humans receiving high antibiotics in others.The bugs are outsmarting treatment at both ends of the supply chain as pharmaceutical research finds it harder to invent the next generation antibiotic.

Innovation research: why you don’t need a heart attack to qualify as a cardiologist

Today's Businessweek piece by Maddock and Louis Viton  on how education and professors might not do much for innovation made me smile. Because this is exactly how I thought before becoming an academic  from being a hands on manager. The logic is like going to a doctor whose qualification must include  having your illness. The MD is hardly relevant!  But I digress…

To be a college professor with tenure you need to be a proven expert by publications in your field. In other words, you should have first learnt and then extended knowledge in whatever field significantly before you are tenured after which you sort of continue extending the field out of well, habit. A bit like the cardiologist who goes through  years of residency under close supervision and keeps honing her/his skills with every patient and recent medical research.

There are literally thousands of pieces of research on the "fuzzy front end" of innovation that the authors talk about. The professor is able to bring the most relevant pieces to the table for a particular audience. If it involves culture change "on a template"  there is lots of research on how that is done. In fact there is a Harvard case on IDEO which explains why organizations outsource design because they are unable to change their cultures to accommodate designing just as organizations outsource advertising to advertising agencies and don't try to create ad copy in the marketing department.

Organizations is a key word here because you can't bring scale  to an innovation without an organization and organizations need people and processes to scale . Recent innovators like Facebook have expanding organizations  who are hiring. And you can be sure that the Facebook organization has processes and developing more as they go along.  Professors studying innovation and it's processes don't sound like "doing" much but it's like becoming the expert cardiologist who knows exactly which artery to unclog.

Full disclosure: This blogger is a college professor !