“If it ain’t broke, don’t fix it ” does not apply to Infrastructure renewal policy for gas pipes, bridges

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We are all careful checking our car's tires and brakes and replacing them well in time. So what is with the replacement of infrastructure like gas pipes and bridges? "If it ain't broke, don't fix it" seems to be the mantra here.

The shocking gas pipeline burst  in San Bruno,California  is being attributed to overdue replacement of high pressure gas pipelines. Today there was a caller on radio from the North East US who was anxiously wanting to know if there was any way to find out the layout of high pressure lines just to be vigilant  for any smell of leaking gas. In fact, San Bruno residents did  report leaking gas – but probably not soon enough.

And then we had the Mississippi bridge that collapsed and thankfully lot's of other unsafe  bridges are now being banned from use.

Engineering and technical folks concerned with infrastructure are great in the US  and do report the need for replacement and renewal on time. The B2B organizational decision system  (or "catchers" of the technical advise) is not very effective on preventive maintenance- more so when the implementer is a budget strapped local,state or federal government.

In addition, there is really no focussed sales pressure on policy makers to renew infrastructure in the same manner as your local tire and brake shop who puts out all kinds of leaflets,deals and re-inforces the need for safety just as large auto service and tire companies keep up the message of tires and brakes on TV.

Maybe infrastructure companies should advertise to the general public so that awareness  and pressure builds on timely renewal of at least safety infrastructure. An associated benefit will be more jobs in the infrastructure renewal projects.

Best Buy has 60% earnings jump, retail grows for second month- is the economy picking up?

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Best Buy has done great and that's not because of no competition from Circuit City.Instead, it is  because of booming cell phone  and accessory sales. Similarly overall  retail sales is up 0.4% – the highest in five months. This number goes up to 0.6% if we exclude the slow auto sales. These two bits of news are encouraging and things should pick up in the supply chain that feeds the Best Buy phones apart from the chains that supply overall retail products.

Since cell phones come with plans we can expect many more calls,text messages and Internet browsing on mobile. in fact, the Google Voice  iPhone app should give a further boost to cell phone usage. More cell phone usage and communication should result in more economic activity and innovation.

While a boom like recovery is being ruled out- we can start feeling relieved that a double dip recession is very unlikely and a more measured recovery with slow job growth might be just round the corner.

Do more with less for your business-Segment your customers and suppliers for Internet “self service”

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To do more with less for your business you need to segment customers and suppliers into different categories or segments of Internet adoption and then encourage different levels of "self service."

One way of segmenting Internet users is to divide them simply into non-users,users and online buyers as in this paper. Recognize that people move along from Internet-non users to users and online buyers over time and as Internet diffusion increases. There could be finer distinctions in your business like some people might do transactions online but still like to receive paper statements at certain times. Be flexible and go along with customers who still want some paper statement or just do not want any Internet but want to talk on the phone. A few questions when they call next time can help categorize them into a "self service" category where they may be able to do certain things online. These tasks will increase over time and as you offer more easy options for self service.

Just by understanding and acting on the different Internet adoption behavior of your external stake holders like distributors, customers and suppliers can help you do more with less. You improve loyalty,satisfaction,accuracy,reduce costs and increase efficiency. However, by taking an "all or nothing" approach like convert entirely to online statements or pay 2-5$ per paper statement or  pay a $5-20 fee  for a phone payment  is just counterproductive.

Internet diffusion theory suggests that you can never have all customers,suppliers or for that matter employees who will become identical in their use of Internet applications. So it's best to recognize, identify (segment) and deal with the different segments appropriately.

Aligning human and financial resources, overcoming politics big challenges to innovation says McKinsey study

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As organizations gear up to change,innovate and recover from the worldwide recession 84% of  over 2000 executives surveyed online by McKinsey say that innovation is a key to their growth strategy.

Among top challenges for commercializing innovation and building new businesses are:

  • Aligning human and financial resources (35% respondents)
  • Overcoming internal politics (30%)
  • Lack of formalized process (29)
  • Gaining leadership alignment (27%)
  • Having courage to make final decisions (25%)

Of the findings reported above to me we can really think of four of the italized ones  as "soft" type of organizational changes that seem to derail both innovation and change.

Even in organizations that have a stage gate type of innovation process, leadership does not engage in the early parts of the process. Near the commercialization stage there is lot of financial and emotional involvement of the team leaders and decision making seems hard. If the idea fails – it is the team leaders' idea and if it succeeds the leadership is happy to take credit. So what is the way out for the entrepreneurial,change and innovation oriented manager?

No easy answers here, but strong efforts to build buy in from top leaders in the early part of new projects is certainly a good way to go.

Let’s be fair to the BP report for recognizing B2B and Supply Chain control and oversight

The media coverage of the BP report highlights the blame game between BP and its subcontractors. But to be fair to the BP report there is a part in the full BP report (Section 6 Part 5 page 185 of 192) that spells out what BP and the offshore oil drilling industry might like to look at when it comes to subcontractors and their ongoing performance.

Thus, the BP report recognizes that the BP Supply Chain and B2B relationships could have been better managed. The question is whether industry in general and the offshore oil industry in particular, will put enough emphasis and resources on managing contractor  relationships going forward.

About StratoServe.

B2B contact and verification by patients may be the solution to Medicare Fraud

The 60 minutes story on Medicare fraud (September 2010) highlights a service verification problem that could be potentially tackled by B2B contact and verification.

Medicare fraudsters’ modus operandi is to  get a list of Medicare patients and just bill Medicare for fictitious supplies to patients. One preposterous example is of a retired Judge who was supposedly supplied artificial limbs (with the provider fraudulently billing Medicare ) for both his good arms in the same month !

It would be interesting to study how a medicare type operation can change its process of re-imbursement to reduce fraudulent claims to start with.  Here are three examples where the risk of fraudulent charges are much less due to personal contact and verification at the B2B level.

  • Credit Cards: Credit card companies have a two way channel. They have a deal with the merchant who has ther terminal and pays a comission for everything charged. In the rare cases of disputes consumers can dispute a particular charge fairly easily including via the Internet.Most merchants are very careful in the accuracy of charging and the control is that the credit card company can simply adjust in the next bill from the merchant.
  • Health Insurance: In health insurance there is a direct link between the doctor’s office and the insurance company regarding billing codes,rates and payments. The billing end of the provider’s organization and the claims end of the insurance company have constant contact and fairly frequent arguements ensuring that the provider does not disappear !
  • Auto Insurance: The auto claims business is also personal contact based. The claims adjuster and auto body shops know each other personally. Although autobody shops seem to bill more than original inspection estimates you can be pretty sure that because of this B2B contact between Insurance claims department,adjuster,policy holder and auto body shop- the work actually got done.

Similarly Medicare might consider a more intensive B2B contact and verification system at the provider enlistment stage. In addition,since Medicare receipients are retired with the time and willingness to verify provider supplies- why not involve them in the payment process?

About StratoServe.

Organizatinal change and innovation- understanding tribes in Afghanistan and thinning out

September, 2010 .Face it – innovation and change in organizations is really difficult but most business organizational change and innovation pale in comparison to what Gen Petraeus needs to deliver in Afghanistan. In Afghanistan, we have thousands of years of poor governance compared to the benchmark of the observers’ governance standard of the time.

But hey -something must have always worked in Afghanistan  and Gen Petraeus puts it brilliantly when  he says that the US needs to better understand how the tribes work both in terms of formal systems and informal ones.Once there is deeper understanding Gen Petreaus suggests that there be a thinning out of the US forces that would support structures that work rather than a wholescale sudden handover.

This deep appreciation of trying to understand what a social system  really is- is very applicable to the typical business organization. Questions like  these are useful:

  • What are the organizations’ formal and informal elements?
  • Who are the anti-change folks  and who are the more progressive movers and shakers?
  • How can you set the right direction for change and thin out your change efforts  eventually? 

Most important is to understand that organizations work at the real local level. It is precisely this local nature of roadblocks that threaten innovation and change in large organizations.

About StratoServe.

Highest value of Merger and Acquision (M&A) deals in ten years: $275 B $ in August

What is the operative word in “M&A deals” you might wonder -in this slow economy? Well it is “deal” given the “give-up and get out”  mood of a whole bunch of selling businesses. The bright news is that there are a whole bunch of cash rich firms looking for deals in this slow economy and the volume of $275 B $  in August 2010 is the highest in 10 years,

[ Note: This post is from, September 1, 2010 and is updated on May 18, 2021 for formatting only]

Waiting for consumers to get jobs and  get more confident about spending  is what is happening at the consumer end of the market. Just see the slow auto sales in August 2010.

Cash rich,long term players are taking the opportunity to consolidate at the M&A level. Lawyers have been cancelling vacations in August to put together the deal papers in a hurry. This is great news because as consumers start spending many organizations would be in a stronger position to service the customer … provided the M&A pieces are made to work together.

M&A is the ultimate form of B2B with the trouble that the merged company has one owner  but whole bunches of duplication.I mean duplication in managers, in the supplier base,in the distribution channel and production facilities. Getting a great M&A deal is easy but getting the pieces to work together is a challenge that must be addressed very rapidly.

As consumer demand picks up – management attention must move to market development rather than trying to just sort out the M&A and the supply chain.

About StratoServe.

Retargeting of Advertising on the Internet- Now Ads follow you around as Google AdWords joins the fray

Recently (August 2010) I was a bit spooked when I found that a particular  ad seemed to pop up at several sites that I went to. I was thinking that there must be a real huge online advertising budget in play here. It turns out that there was no big budget but a cookie in my browser which just activated the ad wherever I went on the Google network.Retargeting is “in” and Google AdWords has opened up the feature to the general mass of advertisers after an initial trial.

When you visit a website and click on a product or service – a cookie attaches to your browser – so when you visit one of the network sites – the ad is activated and you see repeats.

This is quite amazing because the entire purpose of media planning in old media is to show ads where prospective customers go. A huge amount of data is collected and analyzed just to understand the differences between the demographic of say NBC evenong news and CBS evening news.Next you develop media plans and ads and hope (with  a less than 50% chance)  of getting your target audience to just see the ad.

Re-targeting on the Internet means that you repeat the ad to people who have shown definite interest or are “qualified leads”. Imagine if a mall shopkeeper could pass just a few leaflets  with a special deal to every  window-shopper as they were having a snack at the mall’s food court….Would a larger number of window shoppers return and enter the store – probably…more would buy – sure!

Can it be annoying and an intrusion on consumer privacy? Annoying yes but I suppose it will take more time and debate to answer whether this is an intrusion on privacy. Old media (like TV,Radio,Newspapers, Outdoor Billboards) have really no answer to this kind of retargeting.

About StratoServe.

How’s the Internet changing your business? USA Today sheds 9% workforce and Telecom shake-up with Google VOIP

The Internet is truly the global life changer.If you can answer just how the Internet is changing your business and act on it – you’ll do great. Consider two recent events:

  • USA Today has shed 9% of the workforce as it tries to go digital. A Communication Professor  once told me that Communication and Journalism is probably the second largest undergrad major in the US. And guess what –  as everybody publishes via social media what does a professional do?
  • Google VOIP via Gmail has had one million calls placed on the first day. VOIP call quality has improved drastically and Vonage offers 60 countries free. Any old world telecom wired provider like AT&T is in sure trouble. As soon as you can use VOIP via wireless and mobile – the game will change global calling.

Instead of fighting or ignoring the Internet – your businesses  must think  about using the Internet for all that is possible like customer service and CRM, supply chain and SRM apart from processes like billing payments etc. About StratoServe.