JimPinto.com - Connections for Growth & Success™
No. 269 : 15 July 2009

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Ulf hides while Invensys slides

Invensys CEO Ulf Henriksson seems gullible, at best. He backed Paulett Eberhart for 2 years in the direction of making Invensys a "pure software play", allowing her to move HQ to Dallas, TX. purely for her own convenience. Foxboro's core competence was gutted, and replaced with Paulett's ex-EDS buddies.

The software and services based strategy developed by Eberhart and enthusiastically endorsed by Ulf was in fact leading up a blind alley. Paulett was fired, with not a word of explanation. Strike #1.

Now Ulf has apparently been persuaded by Sudipta Bhattacharya (who arrived through Wonderware) to adopt a radical strategy change for the new entity created by the fusion of IPS, Eurotherm and Wonderware into IOM. Strike #2.

Sudipta reported to the world, via respected editors Gary Mintchell of Automation World and Walt Boyes of Control, that Invensys will make a complete U-turn, reversing the Paulett strategy. Hardware products (what he terms "plumbing") are now essential to the broader vision of the IOM "space".

According to Andrew Bond of respected "Automation Insider", this Sudipta vision, ironically, is almost word-for-word the same justification Allen Yurko gave for the succession of acquisitions which brought together the individual elements of IOM in the first place. Strange closing of the incredible circle of events.

Meanwhile, contradicting suggestions that this was a Wonderware coup, changes began to emerge there first. After lots of software development had already been shifted to IDC in India, credible reports came (via Invensys weblogs) that IDC was being sold to India-based CTS. Just a few days later, the layoffs started at Wonderware, reported by the weblogs as "1/3 of the development staff". The same weblogs reported that IDC was celebrating. The unrest is palpable. Change is in the air.

How will the IOM combination of Foxboro, Wonderware and Eurotherm affect the various distribution channels? Naively, Ulf and Sudipta have suggested that this would be an advantage - the different brands will take advantage of each other's routes to market. This tactic is naive in the extreme; in the real-world of independent Sales Reps, sharing of customer information is anathema.

Expecting to win, some of the larger Wonderware Distributors gloat, while Foxboro and Eurotherm sales channels remain shell-shocked, waiting to see what dribbles down. Strike #3 comin' up.

Ulf remains mum - perhaps just cleaning his desk.....

Click Ulf's last hurrah

Click Read more in Andrew Bond's Automation Insider

Click Invensys weblogs

Click Automation World Editor Gary Mintchell's blog

Click CONTROL editor Walt Boyes' blog

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Weblogs woes - Honeywell, Rockwell, Invensys

I started JimPinto.com weblogs some years ago to facilitate open discussions of the affairs of major automation companies. There are weblogs for Honeywell, Rockwell, Invensys, Emerson, Siemens, ABB and others. Today, these same weblogs generate several thousand visits per day to my website.

It seems that during the recent recession, these weblogs have become a primary outlet for employees who are being terminated - RIFed (reduction-in-force), laid-off, let-go - all terms for the same depressing procedure. Often, these people have no other way to communicate between groups, even between each other. They look for information on what's happening in different locations, whether RIF procedures are legal, whether or not to join a Union, etc.

Over the years, the weblogs represent perhaps the only outlet for people who have no other way to express their frustration. To keep the comments balanced, I usually ask insiders for clarification. Senior managers sometimes respond, but very, very rarely. Indeed, some companies report that JimPinto.com weblogs are "banned".

I typically don't publish names, not only of the blogger, but of any manager who is a target of poor opinions, or venting. The only exception is the CEO - he's fair game, in my view. I always check out the validity of the blog or complaints, so as to NOT circulate what may be purely rumor.

Traffic on some of the weblogs has increased dramatically during recent lean times - especially from Rockwell (big layoffs in Canada and the UK), Invensys (big changes afoot) and Honeywell (gutting of the old culture and work transfers offshore).

Actually, some of the weblogs are really quite good, and explain the current management situation in several major companies. They are lucid and worth reading, providing valuable insights into how many large companies are falling apart. Well worth your time to read.

Please review some of the recent blogs (weblinks below). Give me YOUR opinion on what I can do to improve. I'll appreciate your comments and suggestions.

Click Honeywell weblog

Click Invensys weblog

Click Rockwell weblog

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Decline of large companies

Schumacher's 1973 book, "Small is Beautiful" was prescient. He sounded the alarm regarding globalization, asking how much further growth was possible. He was critical of a society that generates unbounded materialism, motivated primarily by greed and envy.

The old model, "Bigger is Better" is starting to collapse. Huge vertically integrated conglomerates were created to minimize transaction costs up and down the supply chain. Now distributed information networks do the same, more effectively, outside any single company. The Web is globalization taken to the extreme. Projects can be open to the best of breed anywhere, creating virtual suppliers and workers that come together for one product, and then re-form for another.

In the old world, the opposite kept on happening. Corporations kept getting bigger. Wall Street giants kept doubling and tripling revenues in a decade. The pharmaceutical industry consolidated through hundreds of mergers and acquisitions. The Fortune 10, which includes Wal-Mart and GE, more than tripled in size since 1990.

And then in 2008 it all came toppling down. The big financial firms were inflated by toxic debt. The big car companies crashed head-on into skyrocketing oil prices and plummeting consumer demand. Big Pharma ran out of blockbuster drugs. Wal-Mart kept closing stores, while GE tried to sell off divisions.

The large and disciplined organizations were powerful only when the game changed slowly. With today's accelerating change, they become vulnerable. They're becoming dead meat. The new economy, rising from the ashes of the latest meltdown, favors the small.

Take another facet of big business which has outlived its usefulness - executive salaries. The bigger the company, the higher its CEO got paid. But, that doesn't extrapolate - the Exxon CEO really didn't "earn" his $500M salary+bonus. The distributed ecosystem of small companies dispenses with the need to pay anything beyond what is earned by pure performance, measured largely by ownership.

"Involuntary entrepreneurship" is now creating tens of thousands of small businesses and a huge market of contract and freelance labor. Many will choose not to take full-time jobs again, even if they become available. The crisis may have turned our economy into small pieces, loosely joined, but it will be the collective action of millions of workers hungry for change that keeps it that way.

So now, in the graveyard of giants, we're witnessing the final march of corporate dinosaurs into the tar pits. This is not just the trough of a cycle, but the end of an era.

Click Wired - The New Economy:
More Startups, Fewer Giants, Infinite Opportunity

Click Wired - Beyond Detroit
On the Road to Recovery, Let the Little Guys Drive

Click Schumacher's 1973 book
Small is Beautiful - Economics as if People Mattered:

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Hire higher

When I was starting out in business, I remember asking Ken Olsen, founder of DEC, for advice. He smiled, "Never hire someone who is not better than you are. If you're always the best, when it comes to the crunch, you'll be doing the job."

Ogilvy says in his book "On Advertising" (really a management book), "If each of us hires people who are smaller than we are, we'll become a company of dwarfs. But if each of us hires people who are bigger than we are, we'll become a company of giants."

Former Apple marketing guru Guy Kawasaki says, "A players hire A players; B players hire C players" - meaning that mediocrity hires inferiority, to "feel" superior.

Large companies are driven toward mediocrity because they create management layers where mediocrity can hide. Middle managers in large companies have no incentive to hire higher. They hire to meet budgets (set by someone else) and usually accept the lowest-paid person who meets the qualifications. That's a primary cause of poor performance.

Hiring higher takes self-confidence and self-awareness. It's the only way to build a great team. Small company entrepreneurs have every incentive to hire well, and they do - because good individual performance and teamwork makes them rich.

Click Hire smart. Hire higher

Click Forbes - Hire Bigger Than You Are

Click The 21st Century Model For Achievement

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The Future of Reading

Perhaps the best "invention" of the past several hundred years is the "book". It is a more reliable storage device than a hard disk drive, and has a slick user interface, with no instruction manual needed, is instant-on and requires no batteries. Many people think it is so perfect an invention that it can't be improved upon. But, Amazon is trying to do that with the Kindle.

An average novel has about 80,000 words; an average adult reads at about 300 words per minute - which means that it takes 80,000/300 = 267 minutes, or 4 hours 30 minutes, to read the average book. Of course, this may be spread out over a week or longer.

Publishers and authors generally refuse to put books online for fear the content will be copied and stolen. So, can books survive in the multi-tasking environment of Facebook, Twitter, multi-tasking and attention deficit disorder? They can, if we stop thinking about the future of publishing and think instead about the future of reading.

Every other form of media that's gone digital has been transformed by its audience. Books have a centuries-old tradition of annotation and commentary, with book clubs and margin-notes. When books go online, readers begin commenting in blogs, snipping and sharing their favorite sections. This can't happen with old-fashioned books because they're locked into paper. Release them, and you release the crowd.

Students buy used textbooks, studying the margins because they want to acquire the best notes. If books were set free digitally, it would produce a class of readers so insightful that you'd pay extra to read their footnotes.

The technology is here. There are web-based XML-like markup languages that allow for really terrific linking and mashups. Imagine a world where there's a URL for every chapter, paragraph and sentence in a book. Readers could point to their favorite sections and write comments on Facebook, MySpace and Twitter, responding by linking to something in a book. If you read about a book, you're far more likely to buy it. The few authors who have experimented with giving away digital copies have found that they end up selling more print copies, because their books are discovered by more people.

Of course, books need not always be social links. One of the primary pleasures of a book is mental solitude; the deep, quiet focus on the author's thoughts and your own. That's not going away.

But books have been held hostage offline for too long. Taking them digital will unlock their real hidden value.

Click The Future of Reading

Click In Web Age, Library Job Gets Update

Click The Future of Reading in a Digital World

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Rodger Lovrenich [rlovrenich@yahoo.com] has prognostications about the Future of Wars:
    "Your comments on war reminded me of my grandfather (slightly overage for WWI) as we sat with our ears glued to the radio on Hitler's invasion of Poland in 1939. I was seven then. Poison gas was viewed as the WMD of WWI and my grandfather couldn't believe the world would enter another war with such a killing technology widely available. I was also at his home 5 years later when the atomic bombs were dropped on Japan ending WWII. 'Well,' he said, 'with this massively destructive technology available, future wars will surely be out of the question for rational people'. His conclusion, like yours I suspect, was founded more on hope than on human nature.

    "Common rhetoric suggests substituting negotiation for war. War is the ultimate negotiation, a last ditch effort to get the outcome desired. A willingness to risk all for an objective, ideology, prestige, territory, dynasty or whatever drives you. Suicide Bombers have goals that are worth killing and dying for. This is a very personal commitment, in fact the ultimate commitment. War is simply this type of commitment on a national scale. War is human-based, not government-based. The object of war is to put your enemy in sufficient misery that he will accept an outcome that no other means of negotiation can achieve.

    "Upon Japans surrender in WWII, Emperor Hirohito stated the situation precisely in a speech to his subjects, 'We must tolerate the intolerable. We must endure the unendurable....' I'm paraphrasing in English, of course.

    "Actually avoiding war is easy, just surrender at every threat. You wanted an idea, now you have one. Is it acceptable to you? See the problem?

    "Believers in negotiations as the ultimate conflict resolution typically have little to no experience in dealing with differing parties that have no overlaying or mutually restricting law. I have; it's a bitch under the best of circumstances.

    "The 'law' of public opinion is unadulterated nonsense. Those who oppose violence and rely on 'law' fail to note the all effective law is backed up by an enforcer with a badge an a gun. No violence occurs if and only if the offending party surrenders. Surrender is something zealots and reactionaries are wanton to do. Whatodo, indeed?

    "However you choose to comment on the subject, those with biased views will interpret your words from their own perspective and judge you harshly. Welcome to the world of bias and warped perspectives. Remember, the bad guys view themselves as correct and righteous."

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Tangela Coon-Miller [dm2754@netonecom.net] has some wonderful insights on Globalization:

    "It seems like we are making large steps to become a global world. I'm just wondering if Globalization would work without cheap exploited labor in the equation. Would it work if companies in other countries had to comply with the same environmental laws and safety regulations? Would it work if they all had to comply with the same workplace rules and regulation, paying a fair wage and fair work-week hours? I rather think it would NOT.

    "I was thinking that Internet (& Free Terrestrial TV/Radio) will help unite the workforce of the world, help enlighten the exploited and poor. Will Globalization eventually run out of exploitable areas? If it comes face-to-face with an educated and united workforce that no longer tolerates abuse, will it take on a new name or meaning? If it is no longer profitable without exploitation, will it become more profitable to manufacture locally again?

    "With our environment in such a mess, it seems like we need to go backwards to simpler times. All of the greatest drug discoveries must now be removed from our food, animals, plants, water and air. To be safe we must reduce use of microwaves, stoves and try eating more raw food. We are told to walk and ride bikes instead of sitting in autos/buses.

    "Will the world start going back to simpler times? So much to learn..."

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Bob Szoke, [rwszoke@marathonoil.com] comments on my survey question, "Would you pay for receiving JimPinto.com eNews?"

    "Jim, Your question was interesting. Most large companies don't have easy ways to pay for subscriptions without days worth of paperwork. I would suspect that by the time you invoice us, we have 52 levels of management to review the invoice and ask for 'justification' reports, and have committee meetings, that the cost would be far in excess of anything you would be charging.

    "Alas, many of your corporate readers would give up in despair, and spend their remaining work years in a deep depression over not getting your newsletters."

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