JimPinto.com - Connections for Growth & Success
No. 197 : 29 November 2005
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
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Yokogawa targets the top-spot by 2010
Customers and the press gathered recently in Tokyo for presentations
and exhibition as Yokogawa celebrated its 90th anniversary. Yokogawa's
90th birthday message: "We really are serious about attaining process
control market leadership by 2010"
At an ARC Forum on February 2, 2005 in Orlando, Florida Isao Uchida,
now President and CEO, had openly boasted (unusual for the Japanese)
that Yokogawa's Vigilant Plant systems would win leadership by the
year 2010. At the Tokyo meeting on October 27 2005, he reiterated
that goal and timetable.
It's been 2 years since Isao Uchida went to the ISA Show in
Houston, Texas to launch Yokogawa's 'Vigilance' initiative and set
his target of growing the business 250% by 2010 to become No. 1 in
the world in Process Automation. On the second occasion (the ARC
conference) most observers took that leadership statement as more
of an aspiration, showing that Yokogawa was adopting a more
aggressive Western-style approach.
I have met Uchida-san personally, and have a lot of respect for
his leadership. When he was originally given the assignment to sell
Yokogawa products in the US, there was no support structure and all
literature was in Japanese. So he knows first hand what it's like
to try to gain market share outside of the Japanese home base.
Now he is absolutely serious about that 2010 target, and is devoting
the resources and effort to make it a reality.
The target seems overly ambitious by Western standards, but
- according to Andrew Bond's astute analysis in his recent
"Industrial Automation Insider" - two things make it realistic:
Outside Japan, 23% of Yokogawa's business is in Asia, 14% in Europe
and Africa, just 7% in N. America and a paltry 1% in S. America.
While revenues in the Americas have grown 40% since 1999 and those
in Europe by 80%, revenues in Asia have grown by nearly 150% over
the same period, with the bulk of the growth coming since 2002.
- Geographical distribution of Yokogawa's current business; and
- With 55% of the company's business in its home market, it's
clear that growing overall global market share does not require
the same share-increase in other markets that competitors would
need to achieve the same growth.
Hence the regional distribution the growth targets: just 5-10% a year
in Japan, but 10-15% in Europe, Asia Pacific and Latin America, 15-20%
in N. America, 20-30% in Russia, Middle East and Africa and a massive
30-40% in China (Yokogawa believes that they have a much more solid
base than any competitor in China.)
ARC's 2004 DCS survey showed the ranking as follows: 1. ABB, 2. Honeywell,
3. Invensys, 4. Emerson, 5. Siemens, 6. Yokogawa. Actually, in the 2004 survey
Emerson, Siemens and Yokogawa were so close together that they were virtually
tied for the fourth place position. Yokogawa has since moved into third place
and seems confident that they will have achieved market leadership by 2010,
with a market share of more than 20%.
CONTROL magazine's December 2005 Top-50 listing shows Yokogawa
way down on the list at No. 18 - but I think that this list
is misleading because it's convoluted by the definition of
"process control". I've discussed this with editor, Walt Boyes.
But the "controls" market is not Yokogawa's only focus. The company
is No. 4 in analytical instruments and mag-flowmeters, No. 2 in
pressure and differential pressure transmitters and No. 1 in
industrial recorders. They plan is to be top-dog in all four by 2010.
And they expect to grow global recorder market share to more than 50%.
All these objectives seem reasonable to me.
I've asked other leading market players for comments, but they have
their heads down and their lips sealed on this subject. No one is
pooh-poohing the claims, which means that they're realistic.
You know what? I like Uchida-san's style, and I wouldn't bet that
he won't win! As an investor, I like to hear plans that are ambitious,
but reasonable, with good leadership; Yokogawa seems to have all.
Visit Andrew Bond's Industrial Automation Insider
Automation World - Yokogawa Celebrates 90
JimPinto.com - Yokogawa targets the top-spot
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The lasting impact of Peter Drucker
I've been reading and recommending Peter Drucker's management books
for a long, long time. This past week, the great management guru died,
and like millions of others I mourn his passing as I recall the
countless ways in which he has impacted my life.
Some 15 years ago, I attended a seminar where Peter Drucker was the
sole speaker for the whole morning. I went early, and sat right in
front, just a few feet from where the guru was seated on a high-stool.
It made me feel that he was talking with me directly, and I have
always felt strengthened by having been in his proximity.
During his 90's, Peter Drucker's mind remained vigorous even as his
body was failing. He said that at his age "one doesn't pray for
a long life but for an easy death." He had hearing aids in both ears,
a pacemaker in his chest and he needed a walker in his last few years.
He died peacefully in his sleep at home on Nov. 11 at 95, eight days
short of his 96th birthday.
The legendary GE manager Jack Welch proclaimed Peter Drucker,
"the greatest management thinker of the last century." Management
guru Tom Peters says that Peter Drucker was "the creator and inventor
of modern management." Andy Grove, the famed Intel manager said
of Drucker, "Like many philosophers, he spoke in plain language
that resonated with ordinary managers. Consequently, simple
statements from him have influenced untold numbers of daily
actions; they did mine over several decades."
Look at this partial list of Peter Drucker's accomplishments:
Peter Drucker wrote continuously on a variety of issues. In his later
years his comprehensive articles covered an amazingly wide spectrum
of human affairs. His historical significance goes beyond just
recognizing the concept of knowledge workers. It rests on his books
such as "The Concept of the Corporation" (1946), "The Practice of
Management" (1954) and "The Effective Executive" (1967). These are
the books that launched the "practice of management" as we know it
today. His immense impact will continue for much of this century.
Why Peter Drucker's ideas still matter
- Introduced (1940s) the idea of decentralization, the bedrock
principle for virtually every large organization today.
- The first (1950s) to assert that workers should be treated
as assets, not as liabilities to be eliminated.
- Originated (1950s) the view of the corporation as a human
community built on trust and respect for workers, and not just
a profit-making machine.
- First (1950s) made it clear that there is "no business without
a customer", a new marketing mind-set.
- Preached (1960s) for the importance of substance over style;
for institutionalized practices over charismatic, cult leaders.
- Wrote (1970s) about the contribution of knowledge workers, long
before anyone knew or understood how knowledge would be the
essential capital of the New Economy.
Fortune: Peter Drucker: 1909-2005
Peter F. Drucker: Right Man for His/Our Times
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Why high oil prices are good
For almost a century cheap oil has undercut other fuels. Now growing
demand is outrunning supplies and increasing prices. But there's
a good side - skyrocketing prices are an incentive for developing
other fuels. Many new technologies are beginning to tap energy
supplies that have nothing at all to do with oil.
With oil prices already at $60 a barrel, new energy sources are
becoming attractive. Three billion dollars in US federal research
money is being invested in synthetic fuel programs which aim to turn
huge US coal reserves into gasoline. Also, corn, sugar, and soybean
farmers are hoping that rising prices can make ethanol and bio-diesel
cost effective, and using plant waste will prove more economical.
It's hard to see demand for oil surviving long at current costs.
Technology breakthroughs are coming fast, while alternatives like
the hybrid car are emerging fast - yielding vastly improved mileage.
The good news is that the world is not running out of hydrocarbons.
The better news is that a lot of other reserves are located outside
the Mid-East and Africa, right here in the Americas.
The demand for oil and energy continues to rise, as billions of
people throughout the world claim their share of global prosperity.
At what price will oil hit the energy tipping point?
Wired (Nov. 2005) - Why $5 Gas Is Good for America
Why high oil prices are a force for good
Bud Keyes of Emerson: The dream of high oil prices
Ron Bengtson - Synthetic fuel is the key to US energy independence
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The end of email as a collaboration tool
Who hasn't suffered from the scourge of email? Today, more than 90%
of my email comes from a variety of scams - Nigerian princes offering
to share millions, ultra-cheap medications, offers for glamorous
dates, instant lottery prizes - ad infinitum. Even worse, some seemingly
genuine "phishing" emails seem to come from from the bank, or Amazon,
or eBay, with links that ask for information which leads to serious
identity-theft problems. And then, of course, email carries viruses.
I suppose that some people still fall for the increasingly clever
email schemes. Remember, even if there is 0.001% response to
10-million emails sent, that's 100 suckers who fall for the scam that pays off
for the spammer. And sending 10 million emails costs very little.
In fact, "stripping" email addresses from websites and blogs is quite
common - which is why I often receive spam at [email@example.com]
and other ancillary web-based email addresses.
The time squandered on email is significant, and it's getting worse.
Legitimate e-mail will drop to 8% this year, down from 12% last year.
Indeed, despite various techniques for intelligent spam filters, more
than 60% of corporate email is still spam. That's seriously reducing
the dependability and utility this key communications tool.
In the long run, perhaps the biggest change will come from an e-tool
that is already widely used among young people: text-messaging. Even
though I'm an email nut, I don't use text-messaging on my computer,
or my cell phone, because I'm uncomfortable with the "instant"
response that's expected. But I've watched in awe as kids twiddle
their thumbs for instant communication across the classroom, or
across the country. And they speed things up with short-forms like
"ovr," "dn," "w/e (over, done, whatever).
Today, regular email is being replaced by software that promotes
real-time links. Business people are starting to prefer software tools
which provide real-time virtual workspaces: private wikis (searchable,
archivable sites that allow a dedicated group of people to comment
on and edit one another's work in real time); blogs (chronicles
of comments and interests); Instant Messenger (users can see who
is online and chat immediately, rather than send an e-mail and wait
for a response); RSS (really simple syndication, which lets people
subscribe to the information they need); and more elaborate forms
of groupware such as Microsoft SharePoint, which allows workers
to create Web sites for use by project teams.
Email is already hitting a wall, creating an overwhelming super
abundance of superfluous conversations, shipping around mounds of
information that no one can possibly digest. What was intended as
a point-to-point communication tool has become a broadcast medium.
In the next few years, more effective collaborative workplace tools
will become a key competitive advantage. Get moving.
E-Mail Is So Five Minutes Ago
Beginning Of The End Of E-Mail
The End of Email?
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Pinto editorial - pill pushing proliferates
These days, I'm getting more and more frustrated with the almost
overwhelming barrage of advertising for pills & medications.
You see regular, consistent brain-washing just about anywhere
and everywhere - TV, newspapers, magazines, radio, the Internet.
Even "advertising free" PBS programs are "sponsored" by
pharmaceutical companies. I find it oppressive.
I'm sure that pushing pills goes back to pre-historic times.
People swallowed special berries, or drank mysterious medicines
to cure their ailments. Traditional cures were handed down -
but usually the expert "witch doctors" kept the formulas and
provided the potions (no doubt with a suitable fee).
In more recent times there were "snake-oil" salesmen who brought
bottles of curious concoctions that cured anything from back-aches
Now, I'm not suggesting that it's all chicanery; sure, there are lots
of good medicines that produce results. What I'm complaining about
is the deliberate brain-washing and price manipulation that produces
hugely unreasonable profits for big US and European pharmaceutical companies.
In the US, more than anywhere else, "big-pharma" companies promote
their pills and potions with prime-time media advertising. Take a look
at how many TV ads there are for medications - compared with any other
category. They all promote the age-old concept: take this magic pill
and all your problems will be solved.
But of course, there are the side-effects. My doctor brother-in-law
told me, "Everything, even water, has side-effects!" But the chicanery
comes with the grossly misleading advertising.
With TV advertising, they rush through the warnings, "there may
be headaches, nausea and abdominal bleeding; cramps and sexual
side-effects". And all the while, the patients (carefully chosen
actors) dance and play happily. Hey, I've even heard one medical
ad announce, "may even cause death" while the cavorting continued.
Notice the word "may" - it's used everywhere, even for the positive
promises: "May reduce cholesterol up to 39%". And notice the exact
measurements, with the words "up to" which, of course, mean that it
could be less. The qualifiers are all carefully chosen, presumably
with FDA permission to make it legal.
Magazine ads for pills are usually two pages. The facing page promotes
pill potency, while the reverse side lists - in fine print - all the
warnings and side-effects. How many people actually read that fine
print? And yet all this is common practice and perfectly legal.
In a recent lawsuit, Merck was acquitted because they had "adequately
warned" Vioxx users about the dangers of heart-attacks. But, there are
still literally thousands of Vioxx lawsuits against Merck. This week
the company announced that it is laying off 7,000 employees and
closing 5 plants. And meanwhile the stock price has stabilized,
and presumably top managers will get bonuses. That's the system.
The result of this sham is that America has the highest drug prices
in the world. With legislation and high-level FDA support, the import
of inexpensive comparable drugs from Canada and Mexico is banned.
In some countries like India, you can buy the equivalents of most
US medications at a fraction of US prices (I'm talking about less
than 10%). Are we saying that those medications are dangerous or
contaminated? Why then are those same generic drugs so much more
expensive in the US?
In old days, there were drug pushers. Today there is legal drug
pushing by the giant pharmaceuticals, with the impunity that comes
through expensive lobbyists and government collaboration.
Who will stop it?
A hard pill to swallow - Why U.S. drug prices are so high
Book - The $800 Million Pill : The Truth behind the Cost of New Drugs
Wired - Stop Making Pills Political Prisoners
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Lee Drendall [firstname.lastname@example.org] comments on Poverty and
"Our current social/economic/political system is really
a reverse Robin Hood scenario. We steal from the poor to feed
the rich. The people who decry paying taxes on capital gains,
dividends, and property in order to finance entitlement programs
are the same ones who are getting federal or state subsidies for
high-risk property insurance and flood insurance on their
multi-million dollar beach houses, not to mention the beach
replenishment that maintains its property values.
"The same governors whose party platforms rail against big
government are right there at the front of the handout line,
asking for Federal Disaster Area declarations before the rain
has even started falling. Who is paying for this? Those of us
in the so-called 'Blue States', who suffer through real winters
and dry vacations! Those of us who pay inflated insurance rates
to subsidize high-risk properties!
"Those of us who work for a paycheck instead of wait for
a dividend check! The problem is that it only takes a few greedy
bastards to wreck Socialism, and there aren't enough altruistic
bastards to keep Capitalism honest."
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After my recent editorial lament on political polarization
and advocating return to progressive politics, Rich Merritt
[email@example.com] sent this:
"I hope it is a sign of the times that at least one business
oriented newsletter (yours) feels it necessary to address social
issues such as poverty and political corruption. I suspect that
most of your business-people audience are Republicans, and you
are giving them a wakeup call. Would that other opinion-leaders
would take the same stand.
"I have been a Republican all my life, starting when I stuffed
mailboxes for Barry Goldwater. I've been a Republican committeeman,
and was asked to run for state rep in Pennsylvania. No more.
I voted Democrat for the first time in the last election. The party
drove me away. I don't particularly like Democrat Party ideals,
but I detest what the Republicans have become: greedy, corrupt,
and mean-spirited: the party that kicks a man when he's down.
"Today's Republican party is NOT the party I once knew. It is
no longer the party of Barry Goldwater and Ronnie Reagan. Today,
it's the party of big business, and the laws being passed reflect
the interests of big business, not the American people.
"We need to go back to a Democrat president and a Democrat Congress,
with the Republicans holding just enough seats to ensure that sanity
prevails in their liberal giveaway programs. That's the way it
worked for a long, long time. When they become the Loyal Opposition,
I could be a Republican again."
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Mandar Phadke [firstname.lastname@example.org] confirms the worldwide
decline of large exhibitions:
"The ISA show decline is not restricted to ISA alone, it applies
to ALL recent events held for automation. Last month, we had a show
by Interkama in Delhi which was an absolute failure, very few stalls
and very little numbers of bonafide professionals, most were gawking
tourists who had nothing better to do on the weekend.
"This means that the demise of the 'Industrial Show' is not
restricted to ISA alone, it seems to be a common phenomenon.
One of the reasons, in my opinion, is that industrial automation
has become too narrow a focus area for an exhibition. The scope
should be extended to automation in transportation/automobiles,
buildings, warehousing and supply chain (just look at RFID),
nanotechnology, biotechnology, medical instrumentation and
beyond to be a big enough event.
"The second reason is that most information about products,
suppliers and applications, is readily available on the internet,
hence people visit shows, only if they expect that a new exciting
technology will be launched and can be seen firsthand, ONLY
at the show and not elsewhere. Since this is not the case,
ergo you have thin attendance.
"The Automation 2005 Expo in India was said by the organizers
to be a great success, but I doubt the numbers; they may be fudged
(otherwise nobody would rent the booths). In India, these
exhibitions also attract students (not necessarily from related
fields, but just teens having a rollicking time), families of
the exhibitors (come see what papa makes) and other such
non-professional visitors. One of my friends, who had put up a
booth, was initially very overwhelmed by the number of visitors
and enquiries, but not many of them got converted into sales."
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