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‘Not on my street!’ The problem with GPS routing efficiency

January 8, 2008 Mitch Betts 4 comments

GPS navigation devices for vehicles are all the rage, but (pursuant to the Law of Unintended Consequences) they’re also causing problems for residential and rural neighborhoods that would like to keep traffic to a minimum. The problem is really that the GPS devices are too efficient. They find the shortest route between Point A and Point B — even if that happens to send the gas-guzzling vehicle hurtling through a residential or rural area where residents would rather not have so much zoomingly efficient traffic.

Update: The Wall Street Journal has a story on this today, 18 March 2008: “Steered Wrong: Drivers Trust GPS Even to a Fault: Blind Faith in Devices Trumps Common Sense; A Road to Nowhere.”

A Dutch research report says the best GPS device is one that smartly routes the driver around residential areas rather than through them. GPS devices that simply pick the shortest routes through residential neighborhoods are labeled “kid killers.” Ouch.

Vinnie Mirchandani adds: “As GPS units mesh with social networks and become more ’savvy’ about traffic jams and construction sites, expect more drivers to be re-routed even more through residential paths.” He notes this could raise some interesting public policy issues.

Meanwhile, small British villages wish they could be taken off the GPS route maps. As The New York Times recently put it: Wedmore, like many British villages, has been overrun by trucks following routes set by GPS navigation devices that do not take into account their narrow roads and sharp corners.”

But trucks and tractor-trailers come here all the time, as they do in similarly inappropriate spots across Britain, directed by GPS navigation devices, which fail to appreciate that the shortest route is not always the best route.

“They have no idea where they are,” said Wayne Hahn, a local store owner who watches a daily parade of vehicles come to grief — hitting fences, shearing mirrors from cars and becoming stuck at the bottom of Wedmore’s lone hill. Once, he saw an enormous tractor-trailer speeding by, unaware that in its wake it was dragging a passenger car, complete with distraught passenger.

With villagers at their wits’ end, John Sanderson, chairman of the parish council, has proposed a seemingly simple remedy: getting the route through Wedmore removed from the GPS navigation systems used by large vehicles.

“We’d like them to have appropriate systems that would show some routes weren’t suitable for HGVs,” Sanderson said, using shorthand for heavy goods vehicle.

Some communities have begun putting up signs warning drivers to ignore their GPS devices on rural roads. But signs seem to be less and less effective as people increasingly rely more on GPS systems and less on maps, common sense or their own eyes.

Read more…

The fallacy — and cost — of giving quarterly earnings guidance

November 28, 2007 Mitch Betts 2 comments

Many executives believe that the quarterly game of giving Wall Street “earnings guidance” provides various benefits: visibility, reduced stock volatility, better valuations. But thorough research by McKinsey & Co. indicates that the practice doesn’t actually work — there’s no evidence that it produces the expected benefits — but carries its own costs.

The two costs:

  • It takes up valuable management time to prepare the guidance reports (i.e., it’s a distraction).
  • The practice produces too much emphasis on short-term performance.

In my opinion, that short-term mindset gets in the way of long-term strategic thinking and thwarts important investments in areas such as innovation, human capital, environmental sustainability, safety, and competitive intelligence. This short-term mentality — called “short-termism” — could be the No.1 problem in American business.

Oh, and McKinsey’s researchers found that, when some companies stopped providing the quarterly guidance, there were no dire consequences.

Read more…

Six Sigma: Innovation-killer?

October 16, 2007 Mitch Betts Leave a comment

Arik Johnson’s e-newsletter — “ReconG2 Weekly” (15 October 2007) — from Aurora Worldwide Development Corp. (a competitive intelligence firm) asks this question: Have you ever considered that innovation only really happens when companies make mistakes?

What then happens when organizations become so obsessed with quality and performance — for example, the Six Sigma revolution of the past few years — that mistakes are specifically engineered out of the system?

Consider, for example, the oft-told story behind 3M’s Post-it Notes, after its inventor, Art Fry, spent years searching for a valuable application of an oddball new adhesive that wouldn’t stay stuck before the product finally went into production in 1980.

Fast forward 20 years and you would find that “Spirit of Innovation” under the decidedly more results-oriented gaze of CEO Jim McNerney, where during his tenure from 2000 to 2005 the company became a kind of poster child for Six Sigma….

But today’s 3M finds CEO George Buckley and his management rolling back many of the company’s Six Sigma initiatives, having found the program incompatible with the spirit of innovation that made 3M great in the first place.

Invention, after all, is inherently risky, wasteful and chaotic… exactly the conditions Six Sigma seeks to eliminate.

Read more…

Intelligence Briefs

October 16, 2007 Mitch Betts Leave a comment

An eclectic collection of discoveries & developments:

Bloom Energy is developing a solid-oxide fuel cell that it believes could generate more than enough electricity to power a house. — The New York Times (8 September 2007)

There’s talk of breaking up the country of Belgium into two or three mini-states. — The Economist (6 September 2007)

A Michigan auto dealer is selling a miniature Chinese electric “neighborhood vehicle.” The FlyBo starts at $10,000 and goes up to 70 miles before needing a recharge. Plug it into any ordinary household electrical outlet for two hours, and it’s ready again to cruise along at 25 mph. — The Saginaw (Michigan) News (7 September 2007)

Russia and China are expected to develop aerospace capabilities to compete with the current Airbus/Boeing duopoly for commercial jets — perhaps in the next decade. The CEO of Russia’s United Aircraft says Russian companies aim to build planes worth $250 billion from 2007 to 2025. — GE Commercial Finance industry newsletter

Slowear, a collection of men’s luxury clothing that promises to be fashionable for years, is challenging the notion of fast fashion. — Iconoculture Inc.

Development and environmental change are now altering the physical aspect of the world so fast that maps must be redrawn frequently, according to an atlas publisher. For example, a new atlas shows the dramatic shrinkage of two of the world’s biggest inland water bodies, the Aral Sea in central Asia and Lake Chad in Africa. — The Independent (3 September 2007)

The next-generation shopping cart is emerging from MarkitCart in Australia. It’s colorful, plastic, safer for children, and (most importantly) has easier-to-control wheels. It can also be plastered with advertising. — Springwise.com

The future of brick-and-mortar retailing

October 4, 2007 Mitch Betts Leave a comment

“Faced with the threat of online retailing and other pressures, retailers globally are seeking to win back market share by making the customer’s shopping ‘experience’ more theatrical, with emphasis placed on the sensuous elements of an in-store shopping trip,” according to market-research firm Datamonitor.

“The next step in the battle to retain customers is to streamline the buying experience, bringing it more in line with Internet shopping in terms of ease and speed of transaction,” the firm says.

Datamonitor analyst Alex Kwiatkowski says that retailers, given difficult market conditions and rising energy costs, will turn to the following technologies (sprinkled with my own cautionary comments):

Digital signage: Though expensive, it’s the fastest-growing advertising medium. The ads can be tailored to the audience, and proximity sensors can determine when someone is nearby and boost the sound level until the person leaves. (Comment: But it adds to the number of advertisements bombarding us throughout the day.)

Near field communication (NFC): A form of radio frequency identification (RFID) technology used for ‘contactless’ payments. It’s fast, and tends to increase “average spend per transaction.” Kwiatkowski says: “Major retailers who do not implement the technology face being left behind as customers demand ever-faster transactions, a trend exacerbated by the ease and speed of online retailing.” (Comment: But there are security and privacy concerns.)

Self-service checkout: It cuts costs, queue times and shrinkage, while providing a solution to employee shortages. “The technology is popular due to its ability to cut checkout time with one attendant capable of overseeing up to six checkout terminals….” (Comment: For this reason, it’s not popular with labor unions.)

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Related:
Rising gasoline prices may boost online shopping
No Contact: Could smart phones spur contactless payment card adoption?

What CEOs worry about

October 4, 2007 Mitch Betts Leave a comment

The greatest concerns of U.S. CEOs
(% citing challenge as of “greatest concern”)

  1. Sustained & steady top-line growth (41.3%)
  2. Excellence in execution (39.6%)
  3. Consistent execution of strategy by top management (38.5%)
  4. Profit growth (29.9%)
  5. Customer loyalty/retention (25.6%)
  6. Finding managerial talent (20.9%)
  7. Top management succession (20.1%)
  8. Corporate reputation (19.7%)
  9. Stimulating innovation/creativity (19.2%)
  10. Speed, flexibility, adaptability to change (18.2%)

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Base: Survey of 409 U.S. CEOs
Source: The Conference Board “CEO Challenge 2007″ (4 October 2007)

Read more…

Gee-whiz technologies being developed for homeland security

September 30, 2007 Mitch Betts Leave a comment

Government contractors are whipping up a slew of quasi-military technologies for “homeland security” purposes, such as the following:

  • License plate recognition systems — infrared cameras that quickly match images to police databases — already are stopping criminals in cars in New York City, the District of Columbia and 23 states.
  • New satellites that can daily collect up to 750,000 square kilometers of imagery, allowing analysts to pick out suitcase-sized objects.
  • Biometric scanning devices that can read fingerprints from about five meters away — all 10 prints.
  • Under development: The remote-controlled “nano air vehicle,” which resembles the seed of a silver maple tree, can be outfitted with a payload the size of an aspirin. For example, it can be used for chemical or biological detection. Or, swarms of the winged devices could fly over a disaster area to detect signs of survivors.

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Source: Reuters, via The Boston Globe (21 September 2007)

Intelligence briefs

September 29, 2007 Mitch Betts Leave a comment

An eclectic collection of discoveries & developments:

A new biosensor developed at the Georgia Tech Research Institute can detect avian influenza in just minutes. In addition to being a rapid test, the biosensor is economical, field-deployable and sensitive to different viral strains. — Georgia Institute of Technology

Brazilian food companies recently made two cross-border acquisitions: JBS (Latin America’s largest beef processor) bought Swift & Co.; and Perdigão (a leading Brazilian food company) bought Plusfood Groep BV in Europe. “While only two data points, we wonder if this foreshadows additional cross-border acquisitions by Brazilian companies in the increasingly global food industry.” — GE Commercial Finance industry newsletter

Sixty percent of Americans are pessimistic about the state of the environment and want prompt action taken to improve its health, according to a national opinion poll. The survey found that 52% of Americans expect the world’s natural environment to be in worse shape in 10 years than it is now. An additional 8% said the environment is in poor or very poor shape and won’t improve. — Woods Institute for the Environment at Stanford University / Associated Press

India could challenge the position of China as the manufacturing center of the world in the next three to five years because China is becoming too expensive. Labor costs are surging on China’s eastern coast. — Capgemini / ProLogis

Starbucks has always insisted that the company doesn’t market its caffeinated beverages to children and teenagers. But company officials acknowledge that they’re considering introducing drinks and drink sizes suitable for the under-18 set. — MSNBC (10 September 2007)

Top HR challenges (hint: they include acquiring, retaining and grooming key talent)

September 19, 2007 Mitch Betts 1 comment

Ranked list of the top HR challenges (in North American business)

  1. Acquiring key talent/lack of available talent
  2. Building leadership capability
  3. Driving cultural and behavioral change in the organization
  4. Retaining key talent
  5. Increasing line manager capability to handle people-management responsibilities
  6. Succession planning
  7. Constraints on headcount (“making do with less”)
  8. Increasing workforce productivity
  9. Lack of consensus about the organization’s strategy/direction
  10. Encouraging organizational innovation
  11. Resourcing and managing HR issues in “new geographies” for the company
  12. Managing human capital during and after an acquisition or merger
  13. Implementing people changes resulting from changes due to operational performance
  14. Workforce planning
  15. Measuring the contribution of human capital to business performance
  16. Reducing overall human capital costs
  17. Coping with an aging workforce

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Base: Survey of 154 senior HR professionals in the U.S. and Canada
Source: “The State of HR Transformation,” North America, Mercer Human Resource Consulting, 2006
Discovered via Workforce Management (10 September 2007)

Deconstructing… Nestle

September 17, 2007 Mitch Betts 2 comments

Nestle SA (based in Switzerland) this week is expected to name CFO Paul Polman as its new CEO, according to numerous media reports. [Update: Oops. They picked Paul Bulcke instead. The challenges below remain relevant.] So what’s the situation that the new CEO faces? Here are some clues, gleaned from various articles in The Wall Street Journal:

Problem: Nestle is the world’s biggest food company (2006 sales of $78.6 billion) but lags the industry in profit margin (13.5% on food).

Problem: An acquisition binge — from Dreyer’s ice cream and Ralston pet food to Jenny Craig weight-loss programs and Gerber baby food — has produced a company so big that it’s unwieldy and sluggish. Weak divisions are being put on a “value destroyers” list (ouch!) that’s reviewed by the executive committee at monthly meetings.

Problem: Too many unprofitable brand variations. Current CEO Peter Brabeck discovered last year that the food maker was churning out 130,000 variations of its brands, and 30% weren’t making money. So he pushed to jettison weaker brands.

Problem: Organizational complexity; the org chart is a thicket of arrows, boxes and subsidiaries, which are being pruned.

Future decision: Whether to buy the rest of consumer-products titan L’Oreal SA (Nestle already owns 29%).

Innovation: Brabeck appointed a new head of innovation (Werner Bauer) and told him to be pickier about which ideas to pursue. The CEO now tracks Nestle’s 10 most promising innovations at monthly meetings. Bauer has slashed the number of new projects by about half.

Technology: CEO Brabeck hopes to finish one of his biggest projects: implementation of a modern ERP system (from SAP AG). The project started in 2002.

Polman’s challenge: Having “already gone after the low-hanging fruit, he could have a tough time squeezing more growth out of the huge company.”

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Sources:
“After Buying Binge, Nestle Goes on a Diet,” The Wall Street Journal (23 July 2007)“Nestle’s Polman, A P&G Veteran, Likely Next CEO,” The Wall Street Journal (17 September 2007)