Monday, November 17, 2008

Weekend reading - Nov 10 2008

  • Excel Web Application Announced at PDC - someone at Microsoft has finally woken up and realized that they cannot find the move towards the web. What will be interesting is how they monetize this, whether they get creative about this, even risking reducing their huge margins on this in exchange for crushing competition from Google and other entrants in this space.
  • Go Phish - why it is so difficult for people to avoid falling a prey to online scams and phishing attacks, EVEN when forewarned. The attached email in the post makes for some hilarious reading.
  • Status, Please - you will never attend 'status' meetings the same way.
  • Can Oracle’s former Fusion chief rescue SAP’s on-demand strategy? - John Wookey was one of two people that Larry Ellison, CEO of Oracle, had noted as being capable of running Oracle. This is in the book Softwar: An Intimate Portrait of Larry Ellison and Oracle
    , published sometime in 2003. Thomas Kurian, the other executive Larry names, has since moved within Oracle to build out Fusion Middleware development into a very successful middleware platform, and also head Fusion Apps development.
  • An interesting study on iPhone usability - not just to the iPhone, but I think illustrates how people invariably end up trying to use almost any product's interface in ways that the designers would probably never have imagined. Truly great products are probably those that anticipate these quirks well.
  • The Economist reduced to reblogging Wired [Great Moments In Journalism] - yes, even venerable media companies like the 'Economist' also plagiarize.

Sunday, November 9, 2008

Weekend reading

American Auto Industry

Edited this post to add more content at the bottom.
Reading about these dramatic headlines, GM reports $2.5B 3Q loss, says it's running out of cash - San Jose Mercury News, , GM, Ford Post Losses as Liquidity Worsens -, GM: Huge loss leaves it almost out of cash - Nov. 7, 2008, and several more, it struck me that I do not really know of any good, comprehensive, and well written books on the American auto industry. There are several books on niche topics I am sure, like on the American fascination with muscle cars, or the cultural impact of the car, or even lots of books on the personalities that shaped the auto industry, especially Henry Ford. Then there are scores of books on the Toyota way, of the Japanese way of building cars, of incorporating feedback from everyone on the shop floor, and a miasma of books detailing management fads. But what I am looking for is more an analysis on when and where the American auto industry started to go wrong. I remember having a conversation with a colleague in Milwaukee in 1998. We were talking about Japanese and German cars, and how my American friend was stating that the Japanese just did not know how to build trucks, or that the minivan had been invented by the American industry, and that there would always be innovations that would happen that would keep the industry ahead of the imports. And my response was, that the American industry had retreated from one segment after another, and what was to prevent the Japanese or others from encroaching into more and more segments till there was nowhere left to hide. The Japanese started with small cars, the hatchbacks, and became good at making them. Detroit - GM, Ford, Chrysler - left that segment since it was too low margin, not profitable enough, and Honda and Toyota and Datsun were free to make these toy cars anyway. Every American would anyway buy a car made by Detroit eventually when they grew up. Then the Japanese entered the sedan market, till they were good at making these cars. Then the minivans (Odyssey, Sienna), the SUVs (Lexus RX, RAV4, Passport, CRV, etc...), the luxury cars (Lexus, Infinity, Acura), the trucks - till imports were everywhere, and beating Detroit on almost every parameter that counted: resale value, quality, reliability, comfort, drive quality, safety.

What is also evident, or at least should be, is that Detroit could not have NOT seen this coming. To be sure, you read about Saturn and GM's attempt to redefine the market in terms of how autos were sold. That was successful, for some time, but never on a scale that could make a tangible difference, nor successful enough to attract more followers. Issues of quality are easy enough to spot, and one could argue that quality is a matter of process and discipline. Quality is not about technology - almost everyone has access to the same technology. It is the processes that define how you go about quality, and with how much discipline that determines who builds the better car. Yet Detroit continued to lag behind imports on initial build quality metrics.

When it came to attacking international markets, it is illustrative to look at the Indian market. When the Indian market was opened up, while the Koreans came to India with new models, and with cars built for the Indian market, which were small, fuel efficient, Detroit chose to come with large, outdated models. The result is that Detroit has a minuscule share of the market, with no realistic expectations of any improvement there.

Even on designs, Detroit cars were seen as sometimes downright ugly, as with some Pontiac models, or just not good looking, as with the Ford Taurus that came out in 1995-96. They were either too huge, or simply not aesthetic looking. Design is of course a very subjective matter, but German designs were seen as consistently better (the Audi A4 for example), the Japanese imports as boring but never ugly.

Even when Detroit was losing market share, consistently, year after year, to imports, analysts and the industry was incredibly sanguine about it, looking at the financing arms of these companies that were hugely profitable on the back of the huge interest in leasing among consumers.

Anyway - looking for books on the American auto industry, that in particular looks at the last thirty odd years, leading upto the death spiral that it seems to be struggling with in 2008.

Search for books on the American automobile industry on

Adding a couple of more thoughts after publishing this post.
Firstly, also consider what Toyota did to compete even better with Detroit. They opened plants in the US. They spent hundreds of millions of dollars, even billions, to build plants in the US. They trained American workers to work in these plants. States were eager to court Toyota because these plants represented an investment as well as jobs for hundreds of manufacturing jobs. These were blue collar jobs at a time when manufacturing had been on the wane for years and decades in the US, the shift towards a services oriented economy, outsourcing, and the move towards lower cost countries had laid low the manufacturing sector in the US. The point of this point is that Toyota was showing, and even proving that it was possible to build cars, in the US, with US workers, that were better than what Detroit had been able to come up with. Toyota also had other considerations to be sure; making a point to the Americans was not what they had at the top of their minds for sure. To hedge against and to protect against a strengthening yen (an expensive yen meant that cars exported to the US would be costlier, and therefore less competitive), and to help ward off the political fallout. Toyota creating jobs in the US would always make good copy in advertisements, which it did.

Secondly, consider the issue of fuel efficiency - Detroit had an attitude towards fuel efficiency that basically equated it with a lack of masculinity, of acting like a sissy if you even talked about fuel efficiency. Yes - oil in 1998 was close to $10 a barrel, and it never looked like it would touch even $20, let alone $140, as it did this summer in 2008. So you had Ford come out with an SUV named Excursion in 1999, which was much, much bigger than the Ford Expedition, which in turn was much bigger than the Ford Explorer, which itself was much bigger than any car you would reasonably expect to need. This behemoth weighed more than 8500 pounds, and even though Ford did not have to specify fuel economy for the monster, it gave no more than 10 miles to a gallon - about 4kms to a liter. When gas prices started to rise, well, guess what - these cars were simply too costly to run. Even with thousands of dollars in rebates, Ford just could not get them moving. Production finally stopped in 2005. The same story was to be repeated when Toyota and Honda started to work on making hybrid and electric cars; Detroit's response was one of denial, ignorance, arrogance. Till oil hit $100 a barrel, and then $110, $120, and more. Even though oil is today back to $60, people recognize that it is more because of the slowing economy and the global financial crisis. Once the US and world economy picks up, so will demand, and countries like India and China, ever hungry for oil to fuel their industries and factories, will likely push prices of oil to near $200. At that price, one can well imagine that most of the world's cars will be uneconomical.

Thirdly, it has been documented, but not received as much publicity as one would have liked. The US auto industry paid local governments to dismantle city rail transport networks so that people would have no choice but to buy cars. It worked - there is more than one car per person, man, woman, and child, in the US today. In other words, there are more cars than people in the country.

A book that covers all these topics and more with authority, depth, and intelligence, would be greatly useful.

Tuesday, November 4, 2008

HBR Case Study - Nov 2008

When Your Colleague Is a Saboteur (HBR Case Study and Commentary) (from the November 2008 issue of HBR) is a case-study that I found quite engrossing. You can read the entire case, at least at the time of writing this post, at the HBR site above. I have reproduced some snippets from the case below:
“Bit of a blur, actually. I spent forever working up some new slides. I looked high and low for that file you said Patrick kept on Millhouse—and ultimately couldn’t find it. So I just cobbled something together.”
“Oh, that’s harsh,” Nicole replied empathetically, pulling open a desk drawer. She produced a box of Swiss chocolates and offered him one, which he accepted. “I know that file is somewhere,” Nicole added. “Patrick never seemed to save anything in its proper place. The file’s probably on the hard drive of a junked laptop. Don’t you just love living with the consequences of someone else’s nasty habits?” She took a sip of tea, winked at Mark, and peeked at her computer monitor.
“Listen, Nicole, I know you must be inundated, but would you mind looking over the slide deck as soon as you can? I sent it to you last night. I want to make sure it looks all right from your standpoint before we present it.”

Mark knew he should interject, but his mind was in a whirl. This was exactly the kind of information that was supposed to be in the file he had been looking for. Why did Nicole have it, and why hadn’t she shared it with him?

Nicole looked up quickly from her desk. Her cheeks reddened. “There’s no way you’re going to meet with Ian if I’m not there!” She stood up confidently. “I’ve been working in this sector, and on Millhouse, for a long time. If you think you’re going to take that away from me, you’ve got another think coming!”

Mark decided to be direct. “Ah, I see. So it’s about grabbing most of the credit, is it?”

“Most of the credit? Ha!” She laughed as if mocking a schoolyard playmate. “I’m trying to grab all of the credit!”

Mark was visibly stunned. “Relax, Mark, you look stressed,” she said breezily as she strode past. Tilting her head at him, she opened the door and walked out.

Irrespective of the industry, and almost irrespective of geography, it is likely that we have encountered variations of this case study in our professional lives. The threat of being upstaged, back-stabbed, or being wrongfully deprived of credit is something that all of us deal with at some or the other point in our careers. This threat can be real at times, or imagined and exaggerated at others.
The three commentaries attached at the end of this case try to analyze and provide some suggestions. One thing that seems to come out is that the effective and lasting solution to this problem is to go back wit a renewed focus on execution and delivering on your job. Complaining to the boss is one of the easiest yet least desirable solutions, especially when the boss is likely to view you as a complaining kindergarten kid running off to the teacher, tears in eyes, asking for the saboteur to be spanked and proscribed from any future bullying. This is especially so if you do not have much capital built with your boss.
What may really be happening here? Nicole may actually be a very good and effective though slightly aggressive executive who has just happened to brush Mark off the wrong way, and Mark fails to respond in a mature way. Of, Nicole may in fact be a person who is used to getting her way, the end justifying the results, and this particular episode is only one representative example of that philosophy. A third explanation, could well be that Nicole's behavior is actually encouraged, implicitly so, by the organizational culture, where people are expected to behave so. In any case, one solution may well be to, so to say, let your work do the talking.

This also reminded me of a very good book, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't, which I strongly recommend.

Monday, November 3, 2008

Weekend reading list

Azure Blues - Robert Cringely argues, persuasively, that Moore's law will bring the same sort of disruptive enablement to the world of solar energy as it has to other spheres in the technology world. Interesting reading for sure.

Wisdom From Steve Jobs: The Importance of Killing Good Ideas - the title says it all. If you do not know what is good, then you do not know what is bad. What is probably left unsaid is that you have to have the right people in the first place, who are able to come up with good ideas. Mediocre people will come up with mediocre ideas. Sifting through mediocre ideas and mistaking them for good ones does not help.

Are visual analysis tools poised to become pervasive? - Stephen Few argues, using Tableau as an example.

Scrabble - if you follow the cartoons, then this one is entirely in character with the strip.

Gary Hamel: All Bankers Who Get Federal Funds Should Be Required To Tattoo "Stupidity is Contagious" On Their Foreheads - Gary Hamel is a professor of strategy, and a past collaborator with Prof CK Prahalad.