My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.
At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.
I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.
Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.
I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.
Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.
Max Fujita, head of European hydrogen fuel cells at Panasonic, discusses the importance of hydrogen technology. Hydrogen is the most widespread chemical element in the universe and could play a significant role in achieving zero net emission and other goals such as wind and geothermal power. Hydrogen is important for more environmentally friendly steel mills and foundries. It even offers a solution for the range anxiety caused by lithium ion battery cars.
The Asia Society have a video on the story behind the Japan traditional craft revitalisation competition. If you read Monocle you will be well aware of Japan’s strength in traditional crafts, often within centuries old businesses. More Japan related content here.
Interesting observations on culture and remote working. Interesting where they are talking about a culture crisis. For the past five years before the pandemic I saw company cultures changed as noise cancelling headphones went on and desks turned into long benches. This ironically damaged company culture. The pandemic shook up office space again, with the home office. I was quite fortunate as I had pretty much everything I needed after freelancing. But I did a lot of Zoom calls with people punched on the end of their bed. The range of views in this series of interviews shows that there will be wide mix of responses.
Finally as a curry cup noodle fan, this next story appealed to me. Nissin (who make the iconic Cup Noodle) has a new strategy in the sustainability game by eliminating the “lid closing seal,” a thin strip of sellotape type material that holds your noodle cup closed while the ramen is cooking in boiling water. This very small change will save an estimated 33 tons of plastic waste per year produced by Nissin. Instead the lid will be held shut by two ‘ears’ on the lid film.
I was recommended Measure What Matters by my friend and fellow ex-Yahoo Cathy Ma. Cathy found the book useful in her way through managing teams. In Measure What Matters, John Doerr explains the idea of objectives and key results or OKRs.
About John Doerr
If you’ve worked in or around the Silicon Valley technology space from the PC age through to the 2010s Doerr’s name will have a passing familiarity to you. Doerr was a salesman at Intel in the 1970s, realised that there were too many good people ahead of him and took an over in venture capital instead. Doerr was involved in funding:
Compaq – Compaq kicked off the market for ‘IBM compatible’ PCs and made the first portable ‘IBM compatible’ PC. Soon after IBM was no longer the dominant player in personal computing leading to the Wintel duopoly. Compaq eventually offered a full range of large servers, workstations and PC when it acquired Digital Equipment Corporation and Tandem Computing. Compaq was in turn bought by H-P
Netscape – Netscape Communications mainstreamed the internet browser, email client, web servers and email servers. The server software lives on in Oracle’s product line via the Netscape – Sun Microsystems alliance. The browser indirectly carried on through an open source project Mozilla
Symantec – Symantec started off as a natural language processing company in the early 1980s, it became famous for its Mac antivirus software and then went into the DOS and Windows market after merging with Peter Norton Computing. It now has a consumer facing business called NortonLifeLock and the business focused software part of the business was sold to Broadcom
Sun Microsystems – Sun Microsystems started off as a UNIX workstation manufacturer. Over time they built up a healthy server and software business that supported much of the infrastructure of the web. They were instrumental in the evolution of several key computing technologies, among them Unix – which influenced parts of the macOS that I am typing this post on, RISC processors in your smartphone, thin client computing like Google Docs, and virtualised computing that is instrumental for cloud computing. Sun Microsystems workstations were popular with investment banks, telecoms companies and internet startups bought their servers. The company’s decline can be marked by the dot com crash. Oracle bought Sun Microsystems and their technology lives on
drugstore.com – was a first generation e-tailer in health and beauty products. Walgreens bought the business in 2011, and shut down the website five years later.
Amazon.com – needs no introduction
Intuit – Intuit sells financial software in the US. TurboTax helps Americans do their tax returns, Mint provides a personal finance dashboard for consumers and QuickBooks is accounting software for small and medium sized businesses
Macromedia – Macromedia was a software company that developed tools for creatives and programmers. It was eventually acquired by Adobe. Macromedia products live on in the Adobe product range
Google – the search engine.
About OKRs
For all of the companies that Doerr has funded he has advocated OKRs. The idea of OKRs came from Doerr’s colleague at Intel Andy Grove. OKRs are a collaborative process. The idea is that it is used with teams and the individuals who make up the teams. Management seeks to set challenging, ambitious goals with measurable results. The key results in OKRs are how you track progress towards the objective, create alignment within the team, and encourage engagement around measurable goals. They are also supposed to flex with circumstance, which is one of the key points of separation from Peter Drucker’s management by objectives (MBO).
The first part of the book Measure What Matters explains the origin and process behind OKRs.
You can get everything that you need in the first two chapters covering 35 pages.
The Cult of OKR
The rest of the book is a series of self aggrandising endorsements of OK from senior executives who are OKR advocates:
Larry Page of Alphabet
Bill Davidow of Intel
Sheryl Sandberg of Facebook
Bill Gates on The Gates Foundation
It crosses the line for me and almost reads like a high water mark for Silicon Valley hubris; Doerr’s book was published in 2018. Three years later and:
Bill Gates is in the most trouble he has been in since the Judge Jackson ruling
Alphabet and Facebook are being assailed by regulators around the world
Intel looks like a shadow of its former self. Its fabrication process are three years behind competitors. Customers are designing their own chips and AMD is eating their lunch in high performance processors
Secondly, Doerr’s book, whilst acknowledging Andy Groves role of OKR creator; fails to acknowledge that Andy gave a good descriptor of OKRs in his 1983 book High Output Management.
I think one of the reasons that I am not that keen on Measure What Matters, is that the book doesn’t work for culturally as a non-American. Instead I would recommend Andy Grove’s own book High Output Management. More books that might be of interest here.
The Exponential Era is a business strategy book published by the IEEE Press as part of its series on technology, innovation and leadership. David Espindola and Michael Wright work at Intercepting Horizons and advise at the University of Minnesota.
The book is a concise 182 pages including its index. It has a satisfying hard cover about the height and width of a paperback book. The book proportions reminded of many of the books that we used to have my secondary school’s library. It felt right in my hand. Its a small thing, but it matters.
The secondary school analogy goes further; the book summarises knowledge and makes it relatively easily digestible.
The Exponential Era includes:
The threat of platforms and their ability to disrupt market sectors
Why people find it hard to grasp the change brought about by the future
The book consolidates the kind of reading that people in technology and marketing would likely have read anyway. Chances are if you’ve already read books like Saving Big Blue, Measure What Matters, The Lean Startup and Zero to One, then The Exponential Era isn’t written for you.
Who should read this book?
Instead this book seems to be an increasingly diminished audience. A company too small for it’s management to have been lectured on disruption by McKinsey, Bain, BCG or Accenture. But still large enough to be concerned. Like McKinsey et al Espindola and Wright are looking to create disruption fear and sell their SPX methodology to re-engineer their business. I would have thought the c suite in most businesses would have at least done enough reading to have a high level understanding of the content in the book.
The book’s relentless utopian optimism reminded me a lot of business works from the 1970s to the dot com era. I think that The Exponential Era will be of most use to junior people at the start of their career looking for a primer rather than its intended audience.
I came across the bullwhip effect as a descriptor recently in discussions around the global chip shortage. Bullwhip effect is a concept that is well known in supply chain circles.
The bullwhip effect is also known as the Forrester effect. Disruption ripples back from the retailer, through the wholesaler, manufacturer, on to their suppliers and so on.
The usual causes for the effect are:
Demand forecast updating – this might be where a company might want to change their product mix to match consumer demand, if a product is very successful or grossly underperforms
Order batching – where members of the supply chain round up, or round down the quantity of orders. This happens with the periodic memory gluts or shortages affecting the technology sector
Price fluctuations – price discounts can encourage non-linear increases in purchases as it becomes worthwhile for customers to stock up, hedging against increased prices down the line. Oil reserves would be a classic example of this phenomenon
Rationing and gaming – buyers and sellers delivering over or under their order quantities. An example of this would be the actions of Enron in US electricity markets. This could be used in a positive way to promote changing the supply chain like renewable sources of electricity generation
What caused the global chip shortage that is driving the bullwhip effect?
There were three causes to the global chip shortage
Partial shutdown – The semiconductor industry went through a partial shutdown because of the COVID-19 epidemic. This meant that there was a smaller supply of chips.
Unusual increase in demand – Home working drove an increase in demand: increased sales in PCs, wi-fi routers, external hard drives, mice, keyboards, printers and so on. There was also a corresponding increase in home entertainment as consumers upgraded smart TVs, Apple and Roku set top boxes. This all coincided with the launch of the next generation of gaming consoles by Sony and Microsoft – which can usually drive a squeeze on their own
Supply chain disruption – A fire in Japan at Renesas Electronics. A trade war affecting Chinese semiconductor manufacturers. Freezing winter weather in Texas disrupting employees and their businesses. Now there is a drought in Taiwan affecting TSMC – the world’s largest semiconductor foundries
OrCam Read – Transform the Way You Read – YouTube – I watched this video and wondered if this was a sign of failure in the education sector in terms of literacy. As far as I can tell, OrCam is a dedicated OCR appliance that reads back the text to you. In essence it is playing the same role as a scribe to a medieval lord. I suspect that OrCam is a product looking for a market and this is a skewed pitch
Are some personalities just better? – All-blues might really be happier and healthier. If so, it could a result of late modernity, or it might have always been true. Still, that doesn’t mean that evolution will favor all-blues, or that all-blues are “more successful”
How the U.S. Government Can Learn to See the Future – Lawfare – Research over the past decade funded by the U.S. government demonstrates that “keeping score” by quantifying the probability that a potential event will or will not happen leads to improved forecasting accuracy. This is especially true when that scorekeeping is paired with training to reduce cognitive biases, as well as tools that combine the forecasts of many people together, harnessing the “wisdom of crowds.” These methods are not just for carnival games and stock trading. They can provide clearer insight on national security questions – it looks like prediction markets might be getting their time in the sun again
Security
Sweden drops Russian hacking investigation due to legal complications | The Record by Recorded Future – Swedish government dropped today its investigation into the 2017 hack of its sports authority, citing the legal constraints that would have prevented prosecutors from charging the Russian hackers responsible for the intrusion, which officials claimed were mere pawns operating on behalf of a “foreign power.”
