US elections are over- both parties need to work for business growth and jobs

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The US elections are over and the message from US voters is clear. Republicans will control the house while Democrats should hold on to the Senate as predicted by different polls.

From this blog's point of view-both parties need to work together for business growth and jobs. For examples, on healthcare reform both parties need to move together to decide the further course of action and make sure that implementation moves forward in whatever form. If it does, then there will be more certainty,investment and jobs in the healthcare business including the delivery side of doctors and hospitals, insurance companies,employers. Just arguing back and forth is going to delay stability and jobs in the entire healthcare value chain.

Stable,pedictable Government policy  are things that businesses value a great deal which helps business investment and jobs.  Perhaps  members of both houses should consider providing that kind stability and predictability to US businesses going forward.

 

Where is the market ? Try India for infrastructure and consumer market

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Soon after the elections President Obama will be on the biggest ever India visit by a US President.

India is a market that is growing by 8.8% in contrast to the  US growing at 2.0%. So just by being in the India market you can grow at  6.8%!

The Indian consumer has upped the ante, they are no longer in need of food, clothing and shelter! They are in need of electricity, water and housing, they have shifted paradigms and they are looking for companies that can provide them sustainable growth- they are looking for you.

In a joint venture, both parties provide an expertise. You will provide your business model and strategy, your Indian partner will provide the customer.  Many of you are involved in the infrastructure renewal effort with the stimulus spending  in the US. Try to find a partner in the India market and get the market moving there.

The President understands the value in partnering with India, it is time for you to as well. Get started and email now.

BP Oil spill and cement quality – is it only a Halliburton contractor problem?

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Halliburton is being blamed that out of the four cement quality tests only one passed and one news report suggests that BP did not know. If you read the report in detail you find that two of the February tests failed and one of the two April tests succeeded. In other words the April tests were after some modifactions in the cement formulation based on the February tests.

Here is the problem: as soon as a contractor or supplier is involved who depends on business from the industry it supplies to, there is a power differential. The supplier (Halliburton) is dependant on the oil industry (BP) and i t's easy to establish that the supplier should have checked- after all the contracts are pretty water-tight.

Let's say that BP was doing the cement in-house and not through Halliburton – could this have happened? Sure but then it would be a BP problem entirely.

With organizations depending so much on B2B to stay competitive and focus on their core competence, it's time to figure out how to make B2B relationships work. For example, if Halliburton  did tell BP of the cement problems- would they have got a "we own this problem too" response from BP ? Not likely because its the suppliers problem to figure out a solution….. Let's watch as more details emerge. In the meanwhile the Halliburton stock has plunged 15% as a sort of supplier's  jeopardy.

Ahead of President Obama India visit- India signs IAEA treaty to limit nuclear accident liability to operators

The Indian nuclear power equipment market is estimated (October 2010) at 175 Billion $ and both GE and Westinghouse are very interested in supplying nuclear  power equipment. Worrying potential US suppliers, Indian lawmakers in August had passed a law that might have made equipment suppliers liable for 80 years in case there was an accident and faulty equipment was to blame. Obviously the memories of Bhopal don’t fade and a nuclear leak like Chernobyl would be catastrophic in densely populated India.

[Note: This post is from October 27, 2010 and was edited for formatting on May 22, 2021]

Luckily for US business, ahead of President Obama’s visit to India next week, India has signed the IAEA treaty and primary accident liability will be of the nuclear power plant operators. The Indian laws are likely to be adjusted to align them with the IAEA treaty.

Going forward both US and European nuclear power equipment suppliers would  need to build in enough training, spares and service  into their project bids so that maintenance and upkeep is as per equipment requirements.Cutting corners on service,spares and maintenance  is naturally extremely  dangerous in the nuclear power business. Perhaps the Indian bid terms should allow for fixed and ample funding for the operational support from suppliers of equipment and not make post-sale support and services an area of price negotiation at the overall project award stage.

As these projects get underway there will be employment in the US and huge benefit with clean power for electricity short India.

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Holiday Online Shopping to increase at least 25% -shoppers will like free shipping

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According to the National Retail Federation's online arm Shop.org – the holiday season in the US is likely to start off just after Halloween from November 1 and majority of online retailers expect a 25-49% increase in sales. In fact, you might observe that many brick and mortar retailers already have holiday merchandise on the shelves. Clearly no one in retail is actually waiting till November end and Thanksgiving to start of the holiday season. More time is good and consumer confidence is slightly up and that should help.

In this holiday season, shoppers are likely to do more online comparison shopping and are expected to  respond to free shipping offers. Online retailers are also in turn likely to offer free shipping for some part of the holiday season. Interestingly the NRF study indicates that compared to social media like Facebook and Twitter consumers are more likely to follow and act upon consumer reviews on retail websites. 

An early start to the holiday retail season will create the physical "pull" in the retail supply chain, more traffic in the malls and better consumer confidence to allow businesses to spend a little more freely.

Selling loans as a product: US Mortgage market and India Microfinance

If you are not a banker it’s difficult to visualize loans as a product that everyone is pressured to sell on the banking side of the transaction. This insight came up during a discussion with some  friends involved in pioneering  microfinance in India.

[Note: This post from October 25, 2010 was updated on May 31, 2021 for formatting issues.]

Apparently private equity has got involved in microfinance in India and huge money is being pumped in. Except that microfinance is about the poorest folks who really are not able to access regular banks. Now the pressure to sell loans is high and more and more loans are being made that should not be made. Alongwith loans is the pressure of recovery leading to huge stresses in rural society in India.

The US mortgage  mess is rooted in the same kind of thinking, ie “sell sell” loans to anyone to meet sales targets. As a result of this kind of  high pressure “selling” of loans to unqualified borrowers there is untold misery for defaulters, those who bought the debt instruments and now the foreclosure mess.

Probably whenever we try to sell anything – defined as something that consumers have to pay immediately or later- we need to reflect. Reflect on whether the consumer is able to pay and capture the value of the product.  This goes for all kinds of services like loans,education,healthcare etc. A loan for a house should get the homeowner  the home, education should help the student earn and pay back the loan, health insurance should deliver healthcare and its benefit to the patient. In hindsight,sacrificing some dubious home loans in the US might have made the world a different place.

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Amazon sales up 40% as Kindle and e-book sales soar -implications for business

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Amazon sales are up by 40% and analysts believe that this is mainly due to Kindle and e-book sales. What does this mean for business ?

Plenty- if you think about it. Just in the last week one retired older baby boomer person mentioned to me about how much he was using Kindle. So it is not the young/millenials but also the retired older market that finds electronic readers wonderful and the e-book prices attractive. Again just this week a younger baby boomer working person mentioned a classic book he re-read on Kindle since it came free with the reader. Both these people mentioned the iPad as an option going forward.

You can be sure that the Gen X and particularly  Gen Y is really not even thinking of paper based reading materials.

Once you get a hang of it electronic reading is just great. The biggest advantages are being able to carry/access  enormous materials  without the physical load, keeping things organized and the ability to search within electronic text.

This news is a big message to all types of businesses. If your manuals, collateral ar anything is meant to be shared make sure that you have a digital version prepared at the same time that you have the print version developed. If you don't have a digital version you will be spending more on print and may not be reaching many of your audiences.

And take the effort to explain to stake holders how they can access a digital copy of whatever document is relevant to them. While printed paper will not disappear the Amazon sales indicate a tipping point.

 

 

Robo-signing foreclosure mess – applying auto assembly Taylor logic to services?

Fredrick Taylor famously did “time and motion” studies to improve productivity in the automobile industry. The American auto worker, pressured to produce more –  did always honestly give a bolt the number of turns required. We seem to not understand how or if  Taylor’s principles apply to the service economy.

It now turns out that unqualified- temprary-hourly wage  people were “robo -signing” 500 foreclosure documents a day. Stating that they “personally knew ” the details of the case. Some defaulting home owners  got less than a month to leave their homes. Some of those who bought these distress properties because of  bargain prices, with their own money,  did not buy the annoying title insurance you are required to buy if you take out a mortgage.  It turns out that this might be one time where a foreclosed home  buyer might really need that title insurance.

We don’t fully understand the nature of services and the extent to which you can apply ‘time and motion” concepts of the Taylor auto assembly line to service encounters be they foreclosure papers, a doctor visit or just a hair salon trip.Our tendency to consider every service provider as a replacable cog in the auto assembly line is at the root of this kind of mess. In the old days the banker had to personally know the individual seeking the loan and really make sure about the income as well as the local reputation of the individual if it was a business loan. Today, even grocery store bank branches, open on weekends and swearing by “local customer relationships” seem to have personnel that keep getting moved around. The new person is evaluated on “productivity” and signing 500 sheets a day does sound productive !

One feels bad for everyone involved in this mess including the bank managers who had been just trying to do all the “legal” paperwork at the fastest,lowest cost possible . Hopefully more light will shine on this difficult situation when the house panel of representatives hear the matter after the elections on November 18.

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For jobs we need to innovate and expand the pie says Jack Welch

Jack Welch joined Donald Trump this morning outside the New York NBC studio at the plaza, they talked about Jack Welch’s appearance on The Apprentice. Towards the end of the video Jack Welch was asked about how jobs can be created.

Innovation and expanding the pie is the way to get jobs according to Welch. “Squeezing the lemon” is not going to help he says. Jack should know from GE because you can only increase productivity so much and then there is no where else to go with productivity and improved performance. You can no longer “squeeze ” the lemon!

You have to think of a bigger pie and expansion. The latter requires boldness and an expansive outlook among business leaders  apart from a climate of growth and risk taking from government.

Chilean miners rescue unifies the world

Where is Chile – exactly? I knew that  Chile is a Spanish speaking country in South America known for Chilean wine and well regarded for football (soccer in the US) but the non-stop media coverage  of the miners’ rescue on TV in  US,Europe and Asia convinced me that we all need to know a little bit more about Chile. The interesting part is that Chile is  that long western strip in South America you would recall from Geography class- home of the Andes mountain range.

[ Note: This post from October 13, 2010 is updated on June 4, 2021 for formatting and a flashback video from NBC]

And then there was this Polish guy celebrating in Poland saying ” we all feel Chilean” as the last of the miners were pulled out ! With a  real time live positive story the world went into rapture just watching the miners come out. CNN and BBC  apart from every major and minor world media outfit provided live coverage.

The miners came out looking fresh and shaved after two months underground. The announcer helpfully explained that  the Chilean Government realized that over a billion people in the world was watching and minor things like shaving, dark glasses and “how to answer media questions” went on as part of the training and briefing of the about to be rescued miners.

The more impressive performance of the Chilean Government was to actually have three alternative plans A,B and C to reach the miners through three different ways of drilling  the half mile distance. A NASA specialist, who had done space station rescues, was roped in and provided advise on diet, exercise so that all the miners did remarkably well in the 90 degree F, 90% humidity atmosphere of the mine.

The Chilean miner rescue brought the world together in a very unusual, positive and cheerful sort of way. The Chilean Government leaders seemed organized,engaged and not there just for the “photo op.”  The world was certainly impressed with Chile.

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