Thursday, October 20, 2016

UK Manufacturing moves back into top 10

News this week that Britain has climbed to 9th place in world global manufacturing rankings is welcome. With annual output worth $247 billion annually this represents 10% Of Gross Added Value to the UK economy. Manufacturing accounts for 14% of business investment and 68% of R & D. And according to the OECD UK manufacturers have outperformed any country except the United States for job creation since 2010. As the UK prepares to re-engage directly with the wider world it seems manufacturing is in good shape.

Thursday, October 13, 2016

What you can learn from a walk round the warehouse

The picture given by the state of a company's warehouse can reveal more than the management accounts.

A lot of mistakes end up in a warehouse. Products that didn't sell in the numbers expected for example. Are the best sellers in stock, or is there just an empty space where they should be? Look at the labels to see where the goods are being shipped to. Why are some covered in dust - have they been there a long time? Then ask the warehouse manager which stuff moves off the shelf quickest. And in the LA  warehouse why were there so many garbage cans in stock? The company wasn't in the hardware business, but the presidents wife was!

The order book had plenty of surprises of its own.  Some of the products I  had reviewed in the R & D labs - major new lighting controls were booked as sold. Controls were the exciting front end to a load of boring looking dimmer racks. Some jobs had been booked in twice and one project listed under 3 different aliases. It was interesting that the president's renumeration had a bonus clause based on bookings, not sales! It was that Enron business model all over again.

Friday, September 23, 2016

Flip charts and duck tape - management tools

The 1980's was a time when  various management theories surfaced, were eagerly adopted and  then often quickly abandoned. It was a time when management was being re-invented as a science to which formulae could be applied, rather than the amateur style or leadership cult that was considered the normal state of affairs.

On a Sunday evening, in late January 1988 I - think, we were leaving a grim looking hotel near to New York's Kennedy Airport. A collection of Diet Coke cans and  discarded Danish pastries and littered the American end of the room, empty tea cups the British end. The flock wall paper bore the scars caused by the removal of 65 sheets of flip chart paper that had been taped to the wall all round the room. It was the end of a M.A.P.S. session. The first in which I  had participated. The management concept of a MAPS  session as I  recall some 30 years later, was quite simple. The managers were gathered together and invited to say what issues were stopping them doing their job properly. These could be complex things or simple things.  Managers were lulled into dropping their guard in volunteering their most private concerns as to what was holding them back. The subjects of concern were written on a flip-chart page. For example -"Don't have a secretary" or more vaguely "Don't have enough time" and this continued until approximately 65 sheets were completed. Then the real fun began. The flip chart was turned back to the first page and the person who had raised the issue had to  explain what this meant. The team chipped in with various ideas until choosing one of these as the answer. This solution  was written below the issue statement, then one lucky person was appointed to carry out the agreed solution. Another was delegated to ensure the tasks were actioned.Where no solution was agreed, the problem was parked and labelled 'back-in-the-box'. But and it was a big but, out of 65 issues, problems or challenges in whatever management speak was in vogue, there were two written by the president himself that were there real show stoppers. He wrote his first problem, 'the Americans don't trust the Brits' and the mirror version, 'the Brits don't trust the Americans'. I  don't recall what the comments were, if indeed there were any, but a glance round the room told its own story. The Americans turned up dressed in casual clothes that would work well at a barbecue, the English wore suits and ties.

Until then I  had never heard of MAPS. Apparently the format had been devised by Egon Ronay's brother. Egon Ronay was a renowned food critic, his brother seemed to favour black and had the air or demeanour of a funeral director. In the short time I had been with my new employer I  had turned over  a stone or two and exposed some surprises. My second week with the firm was to visit  the America arm of the company located in Los Angeles. The purpose of this visit being to review a number of new product that had been developed by the LA team for global sales. Not long before my appointment the company had consolidated the American and British companies under the control of the man previously running the American business and as part of this set up the R&D was also based in LA. I was accompanied on the visit with a product manager from my inherited UK  marketing team. He had briefed me that all was not well with the new product development programme. Towards the end of the week it was becoming apparent that this was a case of the 'emperor's new clothes'.  It was largely all smoke and mirrors. The R&D team were clearly under pressure to deliver this ambitious programme of new products, there was an air of anxiety emanating from the team which probably wasn't helped by a pair of Brits poking around their labs. And here was  the concern. A number of products were basically merely models lacking working parts, such as the electronics. Demonstrations of systems relied on various 'behind the scenes' trickery to illustrate the working product. When reading the story of Enron all these years later, there is a description of how an elaborate demonstration had been laid on for Wall Street investment analysts of a similar pretence to display their new found expertise in broadband. The situation in LA had been of the same ilk, even going as far as a demo to a team from NASA.

The MAPS  session was a direct result of my report on the status of the R & D programme. The next blog will explain the back story here.  I just wish, all these years later that I  had an insight into that Enron management style. 

Wednesday, September 14, 2016

The smartest guys in the room

When things seem to good to be true, then may be they aren't true.

But when smart guys tell you something is so, it can be tempting to believe. After all they are smarter than you are, aren't they? So what's all this about? Some readers will have noted the title and realised I am referring to Enron. Formed in 1985 Enron's stock was to take a meteoric rise to a capitalisation of 60 billion dollars and the company became the most admired, innovative large company in America. It was applauded in the Forbes Most admired Companies survey, management schools used it to produce case studies, it was 6th placed in the Fortune Global 500, yet by 2002 it had crashed and burned and by 2007 it was gone.

It was only recently reading the book I  realised that I  had gone through a similar experience in one job, but at a far more modest level. Every chapter in the Enron story revealed fresh evidence that the man driving this company I had joined had probably taken management classes based on the flawed Enron inspired innovations and case studies model. So how did all this happen?

Back in the mid 1980s I  suddenly found myself 'head-hunted' for a senior marketing role in an old established British company that was something of an institution in its niche market. It was a small company, a market leader in its sector ... well more of an institution really, whereas the company I  left was large and dominated a much bigger market sector. I was interviewed in offices in Covent Garden late in 1985 and after a few days the call came for a final interview in New York, but due to my lack of a visa, the meeting was moved to Toronto. Suddenly here was the entree to a new jet set business existence, a world already far removed from my present job. The interview was hardly rigorous. I  managed to remove the cap from a Coke bottle that had apparently defeated the efforts of the company president, meanwhile he read my CV with total amazement, occasionally shaking his head from time to time before asking if I  had written it myself. He expressed total disbelief that anyone other than a specialist in crafting CVs could have produce such a document. It seems that my chronological recording of my career to date had amazed and delighted him. I  gathered I  was hired. We had dinner in a massive airport hotel restaurant  which boasted a huge log fire surrounded by glass panels which seemed impressive to me at that time. As the UK MD  who had accompanied me on this whirlwind trip and I climbed back on the BA 747, an air stewardess recognised us from the flight out and asked ironically if we had enjoyed the 'day trip'. At Heathrow reality returned, Greenline bus to Watford Junction, the train home on which I  met an old school friend who held a mysterious role at the MoD which was something to do with espionage, then back at my desk the next day after just a day off.

At the beginning of January I  took up my new post. I had already met the marketing team when I  visited the operation after my appointment. But by the end of January the information I  had discovered and the response to my reporting this had launched a chain of events that seemed incredible then and only now viewed in the context of the Enron story can be explained in my own mind.

... to be continued

Monday, August 22, 2016

Seeing the light

When I  worked for large corporates there was often a regular parade of inventors anxious to convince us to strike a deal with them to produce and market their latest world- beating product.

The typical pitch fell somewhere between Britain's got Talent auditions and the Dragon's Den, neither of which were on air then. It was also before the Internet offered a valuable research tool to check them out. For the inventors the prize would be some royalty deal where we took on board the expense of engineering the product for manufacture, testing, standards compliance, investing in tooling, producing the product and marketing. Why did big companies with their own significant research and development teams bother to entertain what was typically a succession of self-deluded or simply crazy inventors? First they might just have genuine breakthrough in an area of interest that had eluded us and further more they might hold a patent. More realistically it was case of not wanting to miss out on a great possibility, much like in the pop music world of not wanting to be known as the manager who failed sign up the Beatles.

Into this odd aspect of our product management life breezed Myron Khan, an American inventor of polarizing lighting panels. A number of things combined to make this Dragon's Den style bid for support more interesting than most. At Thorn Lighting we already produced acrylic lighting panels which typically comprised multiple rows of small pyramids for lighting control. What's more, my boss the head of marketing had recently conducted a fact finding tour of the USA. Here he had observed the widespread adoption of suspended ceilings in offices and stores which used troffer lighting fittings which could be dropped into a ceiling module instead of ceiling tiles. Further more, on the premise that American building trends were ahead of the UK, visiting America gave a glimpse of the future. Already,  on the strength of his report a suspended ceiling company in Slough had been  purchased positioning Thorn for this promised future. Coincidentally Polarised sun glasses were en vogue in the early 1970s and created a premium, high tech eyeware sector as opposed to the 'dar'glasses we then bough from Woolworths or Boots.  And just to complete the picture the price of oil quadrupled in1973 prompting urgent calls for energy cuts of which lighting was a major culprit .

Myron Kahn who was not one for holding back, presented his  Polarised panels as the saviour of civilisation as we knew it. It seemed like a no-brainer - easy to retrofit polarised lighting panels that offered not only energy savings, but sharper vision, reduced glare and less eye strain and all to go into the suspended ceiling lighting fittings we expected would sell in their tens of thousands. But there was one niggling little problem  (there  were others) and that was the science of his panels. No recognised scientific expert seemed willing to endorse these claims. Worse still the American Illuminating Engineering Society the body that amongst other things set recomended lighting levels for illumination levels, refused to even mention Myron's polarized panels in their publications.

The fundamental issue was understanding how the  functioning of polarisation which had been implemented via a rather dull coating sheet applied to an other wise standard acrylic panel actually worked. A favourite way of demonstrating polarisation was to rotate polarised lenses and observe a reduction in light - great for sun glasses. There were a series of marketing/technical meetings with Myron Kahn largely to convince us how it worked. We were invited to observe how much better the colours of an R & D manager's tie appeared under this polarised light. Ever the showman Myron somehow contrived to appear on the BBC television news as the first  American  business to fly into Heathrow on the inaugural flight of Concorde. He intimated he was dashing to Britain to sign a multi million dollar contract. For some reason there was no reference to meeting some cynical product mangers in Slough!

The polarized panels enjoyed little success in the UK and were hideously expensive. The benefit of troffers was cheapness as the ceiling grid provide much of the support structure. The prismatic panel sheets which controlled the light distribution carried big, big mark ups. It was where we made our money.

There is little about Myron Kahn to be found on the Internet, apart that is, for a fulsome Obituary in the Los Angeles Times. In an eulogy that reads like one of his own sales brochures he was described as "the darling of  economists, ergonomists and conservastionists."

Tuesday, August 16, 2016

RSS - a news feed idea that won't go away

Social media has given new life to the term news feed.

Just about 10 years ago in this blog I wrote is RSS about to take off as a marketing tool? We had been offering RSS  to clients for 2 years or so by then, but it never really got a mass following despite being a neat technology. And like many other clever ideas it seemed doomed to stay just that - a neat idea. One thing that persuaded us was that the BBC  was using RSS  and it is still carried on their news sites now.

Last year I  wrote about RSS again, asking is RSS about to make a come back?  Perhaps it has found a niche. The explanation provided by the BBC says it all really. It allows you to view the latest additions to web sites you are interested in - all in one place.

Great idea in a busy world. May be RSS  will still be going in another 10 years!

Tuesday, August 09, 2016

Talking about news publication

Before Internet, news publication in the b-2-b sector was relatively simple.

Basically to get news published you sent your news by way of press releases to the editors of the relevant trade press and hoped. Sometimes you could 'pitch' a story to the editor and be commissioned to write an article and even, many years ago for the author to be paid. For the smaller stories you hoped yours would be selected for publication - most press releases went straight to the trash can.  A figure of 1 in 20 [published to binned] was quoted as typical. So you hoped your press release would be the fortunate 1 out of 20.

Then a couple of things gradually started to happen that changed things. Most b-2-b publications a few decades ago were monthly magazines, a few might have been sold by subscription but by and large it was display and classified advertising that paid for them. And the advertisers were often the same people that sent in the press releases. Colour print was not yet common in  b-2-b publications. A colour section was bound in  to the journal which was otherwise mainly black and white. There was obviously more appeal to place advertising in the colour pages of the publication. Likewise  a news item and photograph in colour were deemed more effective. This opened up a new revenue stream for the publisher. At the time colour print was significantly more expensive than black and white and one additional cost was the production of films for printing colour, which were known as 'colour separation's. The publishers would run your press release on one of the colour pages, but there would be a modest charge for the 'cost' of the separations. The once claimed editorial independence from the financial clout of the advertiser was breached. Now you could buy space one way or another. Advertorials - typically using the magazine's house style but containing apparently 'independently' written copy and therefore more authoritative - allowed the big advertisers to dominate the media. So before heading for the trash can, the press releases rejected by the editor would pass to a salesmen who would sell the space usually using the "colour separation' approach. When advertising sales slumped in difficult times the sales boys  were on the phone selling 'colour seps'- a term that outlived the actual process for colour print as b and w and colour prices balanced out and new generations of 'colour sep' salesmen, when challenged exhibited scant knowledge of what the charge was actually for.

With the Internet the advantage swung more in favour of the advertisers. Now all their news could be published - at least on their own website  -  giving a far more favourable return for the efforts put into writing the press release. Then along comes social media and another set of publication channels. All this opportunity to publish news brought with it its own problems. For example what is really news, news that customers or prospects would choose to read, because it is informative or interesting and what is common place?  Actually filling all these channels with interesting and informative content is another matter. Well here's another problem - the 'news feeds' on social media and Facebook's Instant Articles platform for example has kind of turned the tables a bit where the channel becomes the publisher and the initiative again shifts away from  the advertiser or news creator. Facebook, can and is changing the algorithm. An article titled, 'Why Facebook isn't working for publishers' takes a look at the evolving situation.

Although the technology has been around for years, few company web sites have used RSS as a news feed. It was and remains an in interesting option, one we look at in the next blog.