JimPinto.com - Connections for Growth & Success™
No. 79 : March 18, 2002

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

  • Digital Image Processing Revolution
  • Digital Music Mess - big market waiting for a solution
  • Cooltown - Digital lifestyle
  • Soft Solutions for Hard Problems - George Carlin's message
  • Automation Update 2002 (5)
    • Honeywell - Ax Wednesday
    • ABB: blaming past leadership, finding new focus
    • Invensys Analysis: good companies for sale
  • eFeedback:
    • Crony Capitalism in Italy
    • Deceitful accounting - lock the "stockroom" door
    • Jim Pinto is becoming a PC Potato

Digital image processing revolution

Carver Mead, a pioneer of the modern computer chip industry in the 1970's, has just invented color-processing chips that do for color photography and video what Dolby did for sound. Carver Mead, now 67, is the Chairman of Foveon, a silicon chip-design house that has designed a chip that is the first to surpass the photographic capabilities of 35-mm film. National Semiconductor will produce the chips and Japan's Sigma Corp. will market the first cameras within the next months.

According to Forbes magazine, historians will note that chemical-based photographic film lasted 114 years, from 1888 to 2002. Film is toast; Carver Mead has killed it. Film will stumble on, like record albums and the typewriter. But, in 2002 film became history.

Click Foveon introduced world's first full-color image sensor

Click Forbes.com - Digital Rules

Click NY Times - Digital Sensor Is Said to Match Quality of Film

Digital music mess - big market waiting for a solutin

The world of digital music is a mess. Digital delivery is an e-business enigma.

People are looking for more and more of their music online, as Napster and its P2P successors have shown. The companies that own todayís most popular songs, books and movies are eager to sell their content over the Internet - if only they can find a way thatís both convenient for customers and profitable for copyright owners. The record companies are terrified of piracy, while performers and composers fret that they're not being compensated adequately for music that is digitally delivered.

But, most of the "digital rights management" companies that were founded to provide just such an online marketplace are shrinking or even disappearing from sight. In the last year, several content protection companies have been shut down or sold.

It seems that a tremendous market opportunity has thus far been missed entirely. This is a rarity - a BIG market waiting for a solution.

Click Forbes.com Special Report: Digital Music

Click The Death of Digital Rights Management?

Cooltown - the digital lifestyle

Welcome to Cooltown - a vision of a technology future where everyone and everything is connected to the Web through wired or wireless links. Humans are mobile, appliances are connected, services are everywhere and everything has a Web page.

In Cooltown, technology transforms human experience from consumer lifestyles to business processes that enable mobility. Cooltown is infused with the energy of the online world. Web-based appliances and e-services give you everything you need when and where you need it - for work, play, life.

Cooltown, a vision of Hewlett-Packard Labs, is a responsive world of mobile services with clear, creative thinking about technology. This gives insight into the future of mobility, how technology is used to transform business and accelerate future growth opportunities.

Click HP Cooltown Homepage

Click View the Cooltown video

Click BBC News - January 29, 2002 Digital Lifestyle on Display

A message from George Carlin

Those who know George Carlin, the gross and mouthy comedian, would be surprised that he could come up with something "soft". But, 9/11 has caused some of the most profound thoughts from some of the most unlikely people. Perhaps an aspect of 9/11 is that many have awakened to the ironies and contradictions of much of our society today.
    A Wonderful Message - from George Carlin
    (Courtesy of my good friend, Bud Keyes)

    The paradox of our time in history is that we have taller buildings but shorter tempers, wider freeways, but narrower viewpoints. We spend more, but have less. We buy more, but enjoy less. We have bigger houses and smaller families, more conveniences, but less time. We have more degrees but less sense, more knowledge, but less judgment, more experts, yet more problems, more medicine, but less wellness.

    We drink too much, smoke too much, spend too recklessly, laugh too little, drive too fast, get too angry, stay up too late, get up too tired, read too little, watch TV too much, and pray too seldom. We have multiplied our possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We've learned how to make a living, but not a life.

    We've added years to life not life to years.
    We've been all the way to the moon and back, but have trouble crossing the street to meet a neighbor.
    We conquered outer space but not inner space.
    We've done larger things, but not better things.
    We've cleaned up the air, but polluted the soul.
    We've conquered the atom, but not our prejudice.
    We write more, but learn less.
    We plan more, but accomplish less.
    We've learned to rush, but not to wait.
    We build more computers to hold more information, to produce more copies than ever, but we communicate less and less.

    These are the times of fast foods and slow digestion, big men and small character, steep profits and shallow relationships. These are the days of two incomes but more divorce, fancier houses, but broken homes. These are days of quick trips, disposable diapers, throwaway morality, one night stands, overweight bodies, and pills that do everything from cheer, to quiet, to kill. It is a time when there is much in the showroom window and nothing in the stockroom. A time when technology can bring this letter to you, and a time when you can choose either to share this insight, or to just hit delete.

    Remember, spend some time with your loved ones, because they are not going to be around forever. Remember, say a kind word to someone who looks up to you in awe, because that little person soon will grow up and leave your side. Remember, to give a warm hug to the one next to you, because that is the only treasure you can give with your heart and it doesn't cost a cent. Remember, to say, "I love you" to your partner and your loved ones, but most of all mean it. A kiss and an embrace will mend hurt when it comes from deep inside of you. Remember to hold hands and cherish the moment for someday that person will not be there again. Give time to love, give time to speak and give time to share the precious thoughts in your mind.

    George Carlin

Automation Update 2002 - (5)

Honeywell - Ax Wednesday
During a serious business decline everyone understands when a RIF (Reduction in Force) occurs. But, when several, sequential RIFs occur, remember the RIF Rules :
  • RIF #1: Liposuction
  • RIF #2: Amputation
  • RIF #3: Dismemberment
A disillusioned ex-Honeywell employee sent this:
    "More people were "let go" this week - it was known as "Ax Wednesday". Included were skilled trade apprentices and maintenance people. When in the future will equipment exist that needs no repair? How do you plan for a future where the majority of your skilled tradesmen are near retirement age?

    "This is the way American business works: Allied Signal buys Honeywell, and takes on the name. RIFs follow, with CEO bonuses for good management. They didn't produce anything, and certainly didn't improve the company. The illusion that something was accomplished is the most important thing. Of course when new management takes over, they pledge to listen to their customers and involve the employees. In Jan. 2001 Honeywell employees were told the goal was "20% growth, because Wall Street expected it." By now, post Enron and Tyco and others, it should be obvious that the key problem is company leadership."

The Journal-Standard, the primary newspaper in Freeport, IL, published this letter to the editor on Sunday March 10, 2002.
    No respect by Honeywell
    "What in the world happened to Honeywell?

    "Every employee was supposed to have respect for one another, good attitude, good working abilities, performance plus. Seems like the employees had these potentials, but what happened to the leaders at the top of the ladder, such as the CEO and his officers?

    "This recent episode of employees being lot go was a very disrespectful act toward men and women who worked for your company for many, many years. They were very company oriented people who worked very hard to make their company a world-class workplace. Did these people say "no" when called in at all hours to get a job done?

    "Where was the respect when some of these employees were escorted out of the building like criminals? No notice given whatsoever until that time. Why weren't they given notices so they could have got their belongings ready ahead of time? They didn't get to tell co-workers goodbye.

    "To me, it looked more like a correctional center instead of a place of employment."

    Liz Munz

Pinto Prognostication:

David Cote, the new Honeywell CEO, is known for his propensity to make quick and easy cutbacks, to yield fast profit improvements. Some say however, that exiting CEO Bossidy ordered the recent cutbacks, leaving Cote the job of generating growth. Stay tuned.

Click Forbes: Honeywell's New CEO Is The Right Man

ABB - blaming past leadership, finding new focus
ABB had their Annual General Meeting on March 12, 02, with a review of past sins and outline of strategy for the year. Following are highlights:

New chairman Juergen Dormann said that ABB needs to concentrate on its core businesses of automation and energy, and will sell non-core assets.

Dormann insisted that there had clearly been too much power in the hands of one man (Chairman Percy Barnevik) for too long. "Barnevik knew the company like his trouser pocket. He could keep the parts together and aim it towards the goals. After Barnevik became chairman at the end of 1996, making Goeran Lindahl the CEO, the company lost its bearings. Lindahl's drive to make ABB into a 'knowledge' group had confused many ABB employees and was a mistake."

Dormann noted that ABB had lost its focus and market value had fallen by a third in two years to $10 billion. He said, "That means that we have to clear up our portfolio of activities, to find alliances for specific areas of business, or to sell activities that are not core. Our message is simple. We have to concentrate on our real and only core competence, that is energy and automation technology."

Pinto comments:

Dormann's remarks were remarkably similar to those made recently by Rick Haythornthwaite of Invensys (read on, below).

Click ABB faces shareholder fury, admits finances tight

Invensys analysis - some good companies for sale
Rick Haythornthwaite has outlined how Invensys (in trouble since Allen Yurko merged Siebe and BTR, and then bought Baan) will turn into a "compact, integrated company that would deliver more to its customers". At the heart of the strategy is pruning down the company, with disposals that are expected to raise at least GBP 1.5b to reduce debts of about GBP 3.3bn.

Invensys will have two divisions, one focused on industrial automation, the other on energy management. The rest of the group will be sold off.

To be divested are some excellent, profitable companies which will fetch a good price. Potential buyers are busy, including (in some cases) management seeking to raise money for leveraged buyout.

Haythornthwaite now faces a tough few months to turn his vision into a reality. Invensys stock closed at 118.36p on Friday, 15 March 02, not bad for a holding pattern.

Pinto Prognostication:

What counts now is what Invensys customers and employees think. The Invensys services vision of 45% operating profit appears unreachable. The increase of service from 5% to 30% would have to come from somewhere. The plan depends on this - plus massive layoffs in an already embattled company. The good people of Invensys (Foxboro, APV and other core companies) have already been badly handled and the exodus will continue.

Haythornthwaite has lots of sweet words like : "enormous potential for improving our margins simply by getting the basics right." That kind of thing takes in-depth knowledge of the core businesses, plus good management to implement, plus time - which Haythornthwaite simply does not have.

Click Haythornthwaite's Strategy Announcement (choice of formats)


Benedetto Delle Piane [dabeat25@yahoo.com] from Italy thought my article on "Crony Capitalism" applied to Italy:
    "I am an Italian ex-accountant. Today I gave up my job in the fiscal branch of Italian PriceWaterhouseCoopers (Big Five company). I was really amused to read your article on Crony Capitalism on the same day that I left PwC. I left because when working here, our only goal is to find ways (inside the law, if it's possible) to pay fewer taxes.

    "Italian fiscal rules are enormous, complex and basically created to create big ways for public administration to cause trouble for small companies, while they allow big companies to do what is best for their cash flows. As things started to change, and public administration comprehended that big companies should have been paying more taxes, the role of accountancy and fiscal consultants has seen a strong growth in Italy.

    "Basically the problem is that, as in USA for the Enron case, we are starting to see the same problems. For example, an Italian PWC partner is now having a lot of trouble for having covered some losses on credits in a little bank for something like $27m.

    "So I thought that, first of all, I wanted to find a better place to work because I really did not like the work I was doing; it was better to go away before things get really bad. I'm leaving PWC, and probably the field of accounting.

    "My question is: do you really think that some really honest accounting company exists? Personally I do NOT think so - not in Italy!"

On the same subject, Larry Gould [lsg@LSGould.com] responded with this tirade:
    "The list of "deceitful accounting" candidates must start with Congress. I hold them - collectively and individually - guilty of not performing their constitutional duties to protect the U.S. on September 11th by not instituting basic security tools and practices, and by claiming that the "free market system" will take care of things.

    "At the very least, someone in Congress should have figured out a long time ago that it'd be a good idea to make stronger cockpit doors and door locks on airplanes mandatory. Heck, remember MRP? Many manufacturers learned that they accrued benefits *before* using MRP, simply by installing a lock on the door to the stockroom.

    "Just locking the "stockroom" adequately would have avoided so much - on September 11th- and at Enron, and so much else related to greedy, selfish, short sighted (next quarter), narrow-minded (versus world view), mediocre policies that are so much a part of business as usual these days."

Referring to the aquarium screen-savers I wrote about, Tom Inglesby [tom@editor7.com] exclaimed:
    "Jim, you are fast becoming (perception, only, of course) a PC Potato. If you can put or find everything in life that is important - or as Dick Morley says, of the heart - on a computer screen, will that mean your AIBO will be the only "living" thing in the house?

    "Like news, the computer can provide a much greater range of options than normally will be found in one's own environment. I can read news from anywhere in the world, in whatever language I choose (not that I have a real choice since I am second language deficient). I can also see fish (or anything else "living") on my screen in form and type that I cannot support at home. But is that better?

    "We have an aquarium that provides a place AWAY from the computer's false world. We started out small; less than a gallon of water and a single Betta fish. That was a year ago. Today, we have 150-gallon tank with three Arowana (dragon fish) and assorted smaller fish. I say smaller since the smallest Arowana is now about 2 feet long (started out at 2 inches). At this rate, we shall have to consider moving them to Sea World or building a pool in the back yard for them.

    "Dick has his Barn, a place that ISN'T a computer (although, no doubt, populated with them). We all need a getaway place. If you enjoy the on screen aquarium, I suggest you get a real one instead. And if you want a REALLY BIG FISH, let me know. We might donate one for the asking!"

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