JimPinto.com - Connections for Growth & Success
No. 196 : 10 November 2005
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
Click on any item to jump directly to that item
ABB posts strong Q3 results
After a tough few years, ABB is generating a strong recovery.
Bookings, revenues and earnings rose sharply in Q3 2005 and ABB
is on target for a strong fiscal 2005.
In a traditionally weak Q3, ABB revenue climbed 13%, bookings
jumped 15%, EBIT (earnings before interest and taxes) climbed 81%.
While operating cash flow performance wasn't quite that strong,
20% better isn't bad and ABB is free-cash-flow positive YTD.
ABB's power technology business was definitely stronger than
automation for this quarter. Sales were up 15% (versus 10%),
EBIT was up 89% (versus 21%), and orders were up 30% (versus 9%).
Automation is still larger in terms of revenue, new orders, and
margins. Automation bookings increased 9% to $2,982 million.
Revenues jumped 10% to $2,944 million, with EBIT of 11%.
Fred Kindle, ABB President & CEO suggested that positive market
conditions and strong focus on execution are putting ABB on track
to meet or exceed the profit margin target for the 2005 year.
ABB shines on strong Q3
ABB May Regain Investment Grade Status
The NEW ABB Corporate Culture
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ISA EXPO Chicago Report
The ISA Exhibition in Chicago, October 2005 registered 10,532
attendees, a 27.5% decline compared to 2004. To most neutral
observers, it seemed more like a networking event rather than
an industry exhibition.
And the penguins were there, perched atop the melting ice-berg:
the past Presidents and old-boys club congregated faithfully at
the annual dinner and award ceremonies every year, back-slapping
and basking in past glories. I didn't attend.
ARC Advisory Group reports that a large percentage of attendees
came from offshore locations seeking sales partners. ARC wrote:
"The health of the health of the automation industry is much
better than what ISA Expo 2005 presented."
Some exhibitors were pleased with their booth traffic and the
sales leads that were generated. But, to many visitors it was
the same old story - vendors visiting each others' booth to see
what was new. And there was nothing new - all the same-old,
same-old stuff. (See a major end-user's e-feedback below).
ISA leadership working bravely to infuse new life into the Society
that still has great value as a Standards coordinator and automation
industry bellwether. 2005 President Don Zee and 2006 President Ken
Baker have contributed significant amounts of their time and effort
to organize and implement major changes. And the search is still
on for a new Executive Director.
I'm happy to report a ray of sunshine: industry guru Dick Morley
has been appointed as "Innovation Czar" and will be embarking on
an innovation initiative that will culminate in "Innovation Alley"
at next year's ISA Expo. The goal is to give attendees a sense of
where technology and industrial application are headed in the future.
I have known Dick Morley for ages and have always been impressed with
his imagination, positive attitude and pragmatic approach to solutions
that work. He's now engaged with the growth and success of ISA, and
you'll see a steady stream of practical ideas emerge. Dick has ways
to get hordes of young engineers involved - watch for that to happen.
Dick insists that he has "no silver bullets". But I'm convinced that
he has at least a couple up his sleeve to stimulate new growth at ISA.
ARC - Field Report: ISA Expo 2005
Morley: ISA working, but challenges exist
Innovation Alley to Debut at ISA EXPO 2006
ISA at the crossroads - Jim Pinto's 6-point plan
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Automation Manufacturers turn to Services for growth
In today's competitive global markets, users are scrambling
to reduce costs and improve asset utilization. Many have even
eliminated engineering and maintenance services, preferring
to outsource these functions.
Reacting to this demand, automation suppliers are expanding
their service offerings to "total solutions" responsibility,
looking for growth beyond just products.
Major suppliers must recognize that their service offerings
put them into direct competition with some of their best customers
- Systems Integrators.
Large suppliers (Emerson, Honeywell, Rockwell, Siemens) push for
global contract relationships that small suppliers cannot offer.
But developing local talent to provide high-quality services for
large global customers is expensive. It's a slippery slope.
Oct. 2005 Automation World - Services, growth on a slippery slope
Automation Systems Integration - the realm of specialists
'Coopetition' spreads in the system integration industry
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Book: The Future of Work
I met Tom Malone and heard him speak at the Accelerating Change
Conference at Stanford University in California, Oct. 2005.
He was there to introduce his new book "The Future of Work:
How the New Order of Business Will Shape Your Organization,
Your Management Style and Your Life."
Thomas Malone is Professor of Information Systems at the MIT Sloan
School of Management, with several additional information science
guru credentials. The theme of his book is that decentralization
and employee empowerment will be the essence of all future
Tom Malone draws a big picture. Take a moment to follow this vision
- it'll make you think differently about the way you work.
For millennia, all human societies were organized as small, autonomous
groups called "bands". Then came the rise of bigger and bigger, more
centralized societies called "kingdoms". In just the last 200 years
a new way of organizing human society has expanded rapidly: democracy.
Each of these stages can be explained by a change in a single factor
- the cost of communications. Writing is what enabled hierarchically
organized kingdoms to arise. Printing led to democracy.
The development of business organizations follows this same pattern.
Until a couple hundred years ago businesses were still organized like
bands. When new communications technologies, like the telegraph and
telephone and the Xerox machine, made communications cheap enough to
coordinate larger groups of people, this gave rise to the centralized
corporations - the "kingdoms" of the business world.
Near the end of the 20th century, it became possible for the first
time to exchange the kind of detailed information necessary to
coordinate a business on a very large scale, even as lots of
individuals made decisions for themselves. When communications
costs fell, it became possible for vastly more people to be informed
well enough to make decisions, instead of just following orders from
superiors. Indeed, many "supervisors" became obsolete.
For a long time, successful businesses succeeded by getting bigger
and more centralized. But now the economic benefits of bigness and
the human benefits of smallness can be combined, with significant
improvements in effectiveness. The best knowledge-workers can't just
be ordered around - they're stimulated by the freedom to innovate
and contribute to the "democracy" of business. That's the wave of
the future that's revolutionizing business in this new century.
I must tell you: after I heard Tom Malone's talk during ACS 2005
at Stanford University in October, I immediately walked over to the
Stanford bookstore to buy a copy of his book, "The Future of Work".
I recommend it to you - go read it!
MIT - Future of Work webpage
Business Week - The Future of work:
Tom Malone - Homepage
Review & buy "Future of Work" on Amazon.com
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Editorial - stop the polarization
You know, as soon as I discuss something uncomfortable (like
Poverty in the last issue) some people respond with partisan
labels, often used as epithets. I hate labels - they bypass
the individual's thinking process.
Hurricane Katrina did more than drown New Orleans. It also exposed
how water-logged US partisan politics has become. The elections
this week showed what people are thinking: Stop the Polarization!
Dominated by narrow, self-interested elites, America's political
parties have built a dysfunctional system that's run aground on
the constant conflict between two flawed ideologies.
Conservative Republican attitudes toward planning, conservation and
investment in basic infrastructure clearly contributed to the tragedy
along the Gulf. But so did the failures of the corrupt, inefficient
liberal Democratic administrations that have controlled cities like
New Orleans for generations.
Neither of the major parties seems equipped to deal with the major
challenges that America faces. A new political model is needed,
one that rejects the narrow and sectarian for a broader notion of
national interest, a politics of reason rather than one that harps
on peoples' fears. We need something like the early 20th-century
The early Progressive movement was not primarily from the "left".
In fact, Progressives believed in a nonpartisan approach to
governance. They were Democrats like Woodrow Wilson and Republicans
like Theodore Roosevelt. Later 20th century Progressives included
California governors Earl Warren, a Republican, and Pat Brown,
Hey, till a new 21st Century label comes along, please label me
as a "Progressive".
Joel Kotkin - The Era to Bring Back
US News - An End to Polarization?
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My neighbor Wade Lovell [email@example.com] wonders whether it
matters what "label" he carries, when he tries to make a difference
in the world:
"I've always been a registered Republican. I am a staunch defender
of the USA and of Capitalism. I love my country, support our troops
and wish we had a different President.
"Many would call me a 'bleeding liberal' on poverty and excessive
wealth, on multi-generational debt, on war, and on human
exploitation - strip clubs in Chicago, porn on the Internet,
brothels in Las Vegas, human trafficking around the world.
"As long as those in power consider those not in power to be
'little people' we will have Czars like Scooter Libby (and his
White House handlers) defying the laws that most of us accept
and abide by.
"As long as leaders differentiate themselves in their own minds,
they can victimize others without guilt. When a politician, an
athlete, a movie star or a senior executive has a drug problem
they go to rehab. When 'little people' have the same problems,
they go to jail.
"My wife and I were responsible for contributing over 10,000 meals
in Iraq immediately after the American invasion. Some of the people
we called upon to assist us saw this as a betrayal of our country.
We saw it as preservation of life. We saw it as an opportunity
to right a wrong of war visited upon the innocent "have nots"
of Iraq. We saw this as helping people.
"We also gave 1,100 meals right here at home to the Pala Indian
reservation this year. It turns out that these meals went to
immigrant workers on the reservation who the Indians were treating
as second class citizens. After 200 years of poor treatment, the
Indians, were treating the migrant workers without the dignity
they themselves had sought for so long.
"We won't fix the ills of the world by limiting corporate payouts;
but we could start there. We should not stop at the top. Harvard
cannot find a money manager because, at $7.2 million a year, it
doesn't pay enough to attract a qualified person. When I tried
to contact my old boss from Goldman Sachs, to be a reference on
my application for a job at that firm, I was wondering what
I would do with the $6+ million a year if I got the job. I clearly
would not need that much for myself or my extended family.
I don't understand why others feel differently.
"At heart, I'm not a bleeding liberal, a die hard Republican,
a Christian conservative or a free marketer. I'm really just
a 'little person' trying to make a difference."
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After my article, "Technology, globalization work in Ireland"
was published last week by InTech eNews (also eNews 12 July 2005)
Mark McKechnie [firstname.lastname@example.org] from Ireland responded
"There is two vital components that have contributed to Ireland's
success - 'Knowledge and Innovation'. I am very much part of that
success as an Automation Manager - our facility has been nominated
as the launch facility for all global new products.
"Ireland's competitiveness is not just based on tax benefits and
education but knowledge, innovation, flexibility and a burning
desire to succeed. The country is full of young, enthusiastic and
highly motivated people, which makes it unique in Europe. It has
the youngest population in Europe - over 40% under the age of 25.
"To quote Joe Gantly, Apple Computer European Operations:
"Bernard Collins VP International Operations for Boston Scientific:
'The key asset of a knowledge based economy is people: smart
flexible, educated, proficient, globally aware. There is a
fundamental desire for people in Ireland to succeed.'
'Irish workers are not just good at accumulating knowledge they
are also very good at applying it. There is an eagerness to get
things done right first time, and to do it faster and better.
The interest in continuous knowledge building and learning by
the Irish workforce is a keen competitive advantage that enables
them to be multi functional across organization boundaries.'
"Ireland as a base for Science & Technology has been bolstered by
the knowledge and innovation of the Irish workforce. In 2003 Ireland
had the highest amount of science and technology graduates in Europe
with 23.2 per thousand between the ages of 20-29.
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A major end-user (name withheld by request) reported on his visit
to the ISA Expo in Chicago (Oct. 24-26 2005):
"The Exhibition was small; it didn't even fill up the whole top
floor of McCormick Place. Most of the booths were not much bigger
then what might be found at a local table top show. Many of the
big players were no-shows or minimal shows, including Honeywell,
Emerson and Schneider. I was told by several people "this is an
instrumentation show, not a DCS show".
"My view is that the ISA show is in a downward spiral, and will
only exist a couple more years. It's become a social gathering
for old engineers and a tutorial symposium for young engineers.
Not too many years ago, companies worked hard to get products
and announcements ready to launch at the ISA SHOW. Now they
"The ISA Expo is still the only forum for the small manufacturer
to get some exposure, but the big boys have drifted away. In
terms of technology introduced - that was the most disappointing
thing. I did not see one new innovative thing at the show. Just
some new and improved product lines, but nothing really new.
"Customer traffic was light. There were never any crowds and as
a result there was no energy being generated. Last year, Houston
had probably 4 times the number of customers, maybe higher.
"So, the Expo has to also be a major item of concern. I haven't
heard the results of Dick Morley's discussion with ISA Executive
committee, so I can only hope that these very intelligent people
begin to make hard decision about where they expect to be in the
future so that they can determine how they will get there."
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