JimPinto.com - Connections for Growth & Success™
No. 183 : 31 May 2005

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

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The NEW GE corporate culture

You've probably heard the story of the 6 blind men and the elephant; everyone touches a part and gives his own description. Well, I couldn't find just one person to describe the General Electric corporate culture. And CEO Jeff Immelt was not available to talk with me - yet. However, I thought you'd enjoy this summary from a recent Business Week article (web link below).

General Electric was created with the merger of Edison General Electric Company and Thomson-Houston Electric Company in 1892. Based in Fairfield, Connecticut, GE now has 227,000 employees with $ 260B revenue and market-cap of $ 390B. If GE was a country, it's GDP would rank among the top-30 in the world.

GE operates through 11 segments: Advanced Materials, Commercial Finance, Consumer Finance, Consumer and Industrial, Energy, Equipment and Other Services, Healthcare, Infrastructure, Insurance, NBC Universal, and Transportation. A brief list of GE products would take up another long paragraph, so why bother?

Under former CEO Jack Welch (now retired), the skills GE prized most were deal-making, cost-cutting and efficiency. What mattered most was continuous improvement. That mindset helped give GE consistent earnings and growth over several decades.

About 3 years ago CEO Jeff Immelt, then 46, was Jack Welch's anointed successor. Now in a vastly different business environment, Jeff Immelt is turning GE's culture upside down. He admits to having two fears: that GE will become boring, and the top people might act like cowards. He worries that the obsession with bottom-line results will make managers shy about taking risks. So he's pushing a cultural revolution. He's on a mission to transform the process-oriented company into a creative machine, driving growth through innovation. He wants to move GE's average organic growth rate (separate from acquisitions) to 8%, from an average of 5% over the past decade.

In pushing his new processes, Jeff Immelt is changing many of GE's long cherished traditions and beliefs. Outsiders are being welcomed into the highest ranks - a break with old promote-from-within policies. In sales and marketing alone, GE has hired more than 1,700 new people in the past couple of years, including hundreds of seasoned veterans. And there's a push for a more global workforce to match the areas in which GE operates.

Jeff Immelt is making the need to generate BIG ideas a priority. In true GE style, he's installing a quantifiable and scalable process for coming up with ideas for new businesses. While Jack Welch was best known for his annual planning sessions during which he personally evaluated the performance of GE's top managers, Jeff Immelt's highest-profile new gathering is the Commercial Council. Business leaders must submit at least 3 "Imagination Breakthrough" proposals a year, reviewed by the council and Jeff Immelt himself. The projects must take GE into a new line of business, geographic area, or customer base, and generate incremental growth of at least $100M. The right ideas will get billions in new funding.

For an old company, steeped in the slow ways of Six Sigma, these changes seem scary. Now the demands are for development of strengths in areas that are hard to measure - creativity, strategy, and customer service. Compensation is tied to more than just meeting bottom-line targets; now managers must have the ability to come up with ideas, show improved customer service, generate cash growth, and boost sales. They are being asked to embrace risky ventures, many of which may fail. Risking failure is a badge of honor at GE today.

While others are worrying about the next quarter, Jeff Immelt is planning years of explosive growth. He's trying to recast GE for decades to come, spending big bucks to create the new infrastructure of innovation, beefing up GE's global research facilities, overhauling the GE research center in Niskayuna, NY, investing in new, cutting-edge R&D centers in Bangalore, India, Shanghai, China and Munich, Germany.

The simple fact is that most of GE's growth will come from outside the US. Jeff Immelt predicts that developing countries will account for 60% of the company's growth in the next 10 years, vs. about 20% for the past decade.

To Jeff Immelt, the best managers are great marketers and not just great operators. Marketing is not just a matter of producing better commercials or catchy slogans - it means getting outside the company to understand markets and customers. Managers must look to lead industries rather than merely follow demand. And they must be leaders who are experts in their business and intensely passionate about what they're doing.

Jeff Immelt wants to shape the new world, drive it, make it his own. For him, reinventing GE is the only way to make his company dominate this century, much as it led the one before. You know what - sure there's the risk that he'll fall flat. But, in the new global environment, I have a strong hunch that this guy's a winner!

Click Business Week - The Immelt Revolution

Click GE chief says company looking to China, Middle East

Click Read Jack Welch's new book - Winning

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The decline of the big automation exhibitions

My own first introduction to the automation industry was through the big automation exhibitions. I remember vividly my first ISA show in the mid-'70s - everyone who was anyone was there, with 80-90,000 attendees for the week.

The European shows were bigger. The annual Hannover Fair in Germany included all types of industrial equipment, with automation exhibited in 3 large buildings. At its peak, the event attracted some 100,000 visitors per day. Yes, 100,000 per DAY.

Interkama in Dusseldorf was the world's biggest automation fair, attracting hundreds of thousands every 3 years. And there were other giant European exhibitions - Mesucora in Paris, the HET exhibition in Holland, BIAS in Italy and more. People flocked from all around the world.

But alas, those halcyon days are no more. In the US, the annual ISA shows have declined to a mere fraction of former times. The suppliers to customers ratio, which used to be as much as 10:1, is more like 1:1 today, and perhaps less (my estimates). Traffic is sparse, with forlorn exhibitors spending their time reviewing each others products and bemoaning hard times.

The European exhibitions are also fading away, with organizers scrambling to consolidate. Interkama gradually declined from 15 to 9 halls, and then just 5. Two years ago, they gave up and became a sub-section of the Hanover Fair; in 2004 attendance was reported to be down to 60,000. In the UK there is no longer any major automation exhibition.

Reasons for the decline? Today, there's not much new to see, and customers can get more up to date information via the Internet. This, plus the huge cost of travel, hotels, expenses and lost productivity.

These days, it's more effective to invite key customers to attend private exhibitions. So most major automation suppliers are not attending any major exhibitions, but instead are organizing their own shows. ABB's conference attracted some 1,500 key customers in April 2005; the Honeywell equivalent will be held in Phoenix, Arizona, in June.

Too, these days, third-party organized personal-networking events are successful. ARC, for example, hosts conferences with focused programs for end-user customers; only senior people from supplier organizations are invited. The cost is higher than the usual exhibition/conference, but apparently the higher ticket is justified by the focused programs and the opportunities for personal networking.

The recent Electric Automation America conference & exhibition in Chicago last week (May 23-25 2005) was organized by German Mesago Messe Frankfurt GmbH. and their US affiliate Messe Frankfurt Inc., Atlanta. This was the first, exploratory effort by a German leader to offer a smaller, focused conference, directed at electric automation. The event was co-sponsored by several leading automation magazines. About 50 companies (mostly German, including Siemens) attended over the 3 days. This was indeed a good start for new, smaller, tighter, focused events. We wish them future success!

Of course, (grin) the best part of SPS EAA was my Keynote speech - "Global markets in the new century". Review the outline (weblink below).

Click Automation World (May 2005):
The decline of big automation exhibitions

Click Outline of Jim Pinto speech at SPS EAA Exhibition (May 24 2005):

Click The Role of Exhibitions in the European Marketing Mix

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New George Gilder Book: The Silicon Eye

The irrepressible George Gilder has come up with another new book that reads like a fast-paced detective thriller. It describes a major tech revolution in the making - a new imaging chip that's more akin to biology electronics, that see the real world much as the human eye sees it - a continuum of moving pictures rather than a series of captured still-photographs.

Using conventional imaging chips, today's digital cameras offer ever higher resolutions. My prized 2-year-old 2.1 megapixel Canon Powershot is still fabulous. And the latest Canons and others are offering 6, 8, and even 10 megapixels, all at less than $ 1,000.

But, that's not George Gilder's story. His "Silicon Eye" is about a group of fascinating people and ideas. It's the saga of Carver Mead, the guru that Gilder has always felt is a seminal thinker in silicon; and Frederico Faggin, the designer of the 4004, the world's first microprocessor, a significant milestone in tech-history. Somehow, for over 40 years, these two quintessential inventors remained as entrepreneurs, pursuing elusive new paradigms, driving disruptive technologies and pushing powerful inflection points, moving ever closer and closer to breakthrough inventions. (See, I'm beginning to write like George Gilder).

I first mentioned Carver Mead and his possible breakthrough in JimPinto.com eNews, 18 March, 2002. Though the fate of his company, Foveon, is still uncertain, George Gilder sees the end-game as inevitable. "Foveon," he writes, "can do for the camera what Intel did for the computer: Reduce it to a chip and make it ubiquitous."

"The Silicon Eye" is like the script for a new movie - Carver Mead's empire of entrepreneurship that will change the world. This book is a real-life technology thriller that you must read, to believe.

Click Review "The Silicon Eye" on Amazon.com

Click Steve Waite on "The Silicon Eye"

Click Justin Hibbard - Into the Gildercosm

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The re-birth of television

Television is now undergoing a transformation that is as significant as when it went from black-and-white to color some 50 years ago. Initially, TV was just a few channels with only test patterns after midnight. But, as monochrome moved to color, pay TV came along, and more channels, and remote controls, and video recorders and cable TV. But compared with what's coming, those things are only half the fun.

Tomorrow, television will be everywhere. Start with the screens: wide, flat, high-definition big-screens, and tiny cellevision on your laptop, PDA or cell phone. And the channels: they'll expand from a few hundred on cable and satellite TV to literally thousands - video on demand. The ethos of New TV: anything you want to see, any time, on any device.

Early adopters have jumped on the new stuff because they offer 2 things that are lacking in the fading era of broadcast TV: personalization and empowerment. Because of this inadequacy, market-shares of the major networks is plummeting.

No one uses the term "TV set" anymore - because video can be viewed on anything from traditional TVs to laptops, or screens on the seat backs of Amtrak trains, or planes. The living-room standard is a big-screen that delivers high-definition quality. After years of hype and fiddling with standards, prices are coming down quickly and already 25% of all TVs sold are high def. Already most prime-time TV shows are available on HDTV.

Another shift was started by TiVo - the ability to rearrange TV schedules - not tied to the networks' program times. Though VCRs have enabled this for decades, they were always too hard to use, too dumb. But digital video recorders (DVR) easily grabs favorite shows, allow freeze-frame any time, and jump commercials with the flick of a button. More and more, DVRs are becoming standard options, as more people enjoy the benefits.

And now video-on-demand is coming - the choice of old or new movies from vast on-line resources - like choosing from a library of MP3 music. And soon too, new movie releases will be immediately accessible from home; the old marketing trick of allowing theaters to show new movies before they are released on CD will become outdated.

When there's "broadband everywhere" there'll be video-on-demand anywhere. People will follow schedules only for major real-time events like sports and election night.

The new TV revolution is already here! I guess I'll have to start arranging for JimPinto.com eNews to be available on Cellevision. Soon.

Click MSNBC News: Television Reloaded

Click Cellevision is coming

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Euro-English is coming

Hey, enjoy old-fashioned English while you can. The European Commission has just announced an agreement for English to be the official language of the European Union. German was the other possibility, but the Germans compromised, provided some of their efficiency recommendations were accepted. But the French were totally against any agreement and they voted against any violation of their vocabulary.

As part of the negotiations, Her Majesty's Government conceded that English spelling had some room for improvement and has accepted a 5-year phase-in plan that will become known as "Euro-English".

In the first year, "s" will replace the soft "c". Sertainly, this will make the sivil servants jump with joy. The hard "c" will be dropped in favour of "k". This should klear up konfusion, and keyboards kan have one less letter.

There will be growing publik enthusiasm in the sekond year when the troublesome "ph" will be replaced with "f". This will make words like fotograf 20% shorter.

In the 3rd year, publik akseptanse of the new spelling kan be expekted to reach the stage where more komplikated changes are possible. Governments will enkourage the removal of double letters which have always ben a deterent to akurate speling. Also, al wil agre that the horibl mes of the silent "e" in the languag is disgrasful and it should go away.

By the 4th yer peopl wil be reseptiv to steps such as replasing "th" with "z" and "w" with "v".

During ze fifz yer, ze unesesary "o" kan be dropd from vords kontaining "ou" and similar changes vud of kors be aplid to ozer kombinations of leters.

After zis fifz yer, ve vil hav a reli sensibl riten styl. Zer vil be no mor trubl or difikultis and evrivun vil find it ezi to understand ech ozer. Ze drem of a united urop vil finali kum tru. And zen ve vil tak over ze vorld!

    Note: The author of this gem is "anonymous", but it came to me via Eoin O'Riain from Ireland, who said that it came from Vitor Finkel. And I tweaked. I also found it on the PolishNewes website (weblink).

Click Eoin O'Riain's website - The Read-Out Instrumentation Signpost

Click English will be the official language of the European Union

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Martin Greenwood [Martin.Greenwood@iesystems.com.au] has come up with a practical way to eliminate spam:
    "I believe the problem - and the solution - lie in the financial structure of the Internet. At present, people pay to RECEIVE data over the Net. That is the correct payment structure for web content that subscribers REQUEST, but it is exactly wrong for e-mail.

    "E-mail predates the Web, and it betrays its origins - a means of communications within a scientific community who largely knew each other and certainly respected those they did not personally know. It must change if we are to rid ourselves of the scourge of spammers.

    "There is a precedent for this. In the eighteenth and early nineteenth century, before the establishment of the mail services we now take for granted, letter carriers were paid by the recipient of a letter. Our modern postal system obliges the SENDER to pay the postage - and consequently junk mail is much less of a problem then spam. (Most of it is hand delivered - not sent through the postal service).

    "In the 1840's my forebears migrated to New Zealand. Dr John D Greenwood, his wife Sarah and about 12 children (one born on the voyage out) arrived in Nelson in 1843. Sarah maintained a correspondence with her sisters in England, who kept the letters. In the 1950s these letters were deciphered and made into a limited edition book - a copy of which I have. I say deciphered, because in order to ensure her sisters got good value for the money they were paying for letters to be delivered, Sarah wrote on both sides of the paper, then turned the sheets sideways and wrote again. Four and possibly more layers of faded ink hand writing on a single sheet of paper. She exhibited a respect for the recipients, a respect which Spammers obviously ignore.

    "My proposal is that all ISPs - everywhere - charge a small fee (a single cent is possibly enough) for every e-mail they receive, from whatever direction. As e-mail passes from ISP to ISP, a charge is levied by the recipient. Most of these charges cancel out - A sends 10,568 e-mails to B, and B sends 12,323 e-mails to A, and the numbers are balanced up at the end of a month, similar to inter-bank transfers. (An ISP who fails to pay the residual charges gets the permanent cold shoulder). The balance of money flows from original senders to final delivery ISPs - who can then afford to offer ever more competitive deals to their subscribers.

    "Such a charge to the normal e-mail user would be trivial, a few cents or dollars a week - still vastly cheaper than snailmail. Some-one like you needs to charge a nominal fee. Your newsletter subscribers would surely not balk at a dollar a year to receive your newsletter - which would more than cover the 52 cents it would cost you to send them out.

    "However the Spammers, who rely on the ability to send out millions of e-mails for virtually nothing in the hope they will find one or two mugs who reply, would be forced out of business. Unless their hit rate reached above 0.01%, $100.00 per hit would render most of them unviable."

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Andrew Dennant [Andrew.Dennant@EmersonProcess.com] provided some gratifying feedback (thank you, Andrew!) and then proceeded to comment on our recent "Cellevision" article:
    "I find your JimPinto.com eNews interesting and refreshing; technical enough to be appropriate to read at work, but light and diverting enough to provide some relief from the intensity of the day. It's a fine balance you strike, and I'm grateful. Incidentally, I was at a training course this week and asked if one of the other trainees read your eNews. His response was, "Doesn't everybody who's anybody?"

    "Enough sycophancy! The reason I thought I'd drop you a line was to enquire whether your cellevision article was based on the mobile technology available in the US at the moment, or that in Europe with the third generation (3G) digital phone infrastructure. My perception (and it is only that - I left the UK for the Middle East in 2001 and now live in the States) is that Europe is ahead in the mobile technology stakes. Indeed, I was shocked when I moved to the US last year and found that analog phones are still available.

    "For what it's worth, when I was traveling this week, I used the browser on my Motorola V3 to find which cinemas were showing the movie I wanted to see and what time it was on. I then used Mapquest on the phone to get directions to the cinema. So the web-connected part of your vision is already here. It's just crawlingly slow compared to what I believe I would have in Europe; and the billing is infinitely more complex and expensive than what I remember."

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Steve Cuff [SCUFF@Calex.com] commented on my "bulls--t" article. Note: When I spelled the word BS completely in the last eNews, several spam-filters blocked it because of the use of a "forbidden word".
    "I can't agree more that television has become unbearable, with close to half the air-time full of BS ads for which the advertisers pay big bucks. I guess that pays for expensive anchors and the football/baseball/basketball players, and all the other expensive personalities. I pretty much stick to PBS and the History Channel where, at least between ads, you can learn something.

    "I guess when we can get TV on our Cell Phones, we will then have Portable Bulls--t. I can wait."

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