Sunday, November 15, 2009

“IGNORING THE ELEFANTE”

The Arne Duncan, Newt Gingrich, Al Sharpton interviews today are the best I have seen on Meet the Press-ever. I loved the passion David Gregory exhibited toward the topic of how to improve education.
They discussed accountability, parent participation, teacher unions, and of course the drop-out rate among black and Hispanic youth. Unfortunately, they never mentioned nor could they have discussed the issue of learning English-academic English I mean-by both students who speak languages other than English and yes even amongst monolingual English speakers.
As an Hispanic/Latino/Chicano-what ever appellation you use-I appreciate the discussion about improving our schools since my group is one of the most impacted, if not the most, considering the growth in population of our ethnic group.
I have been directly and indirectly involved with and in public education for over forty years. The lack of voices from the Hispanic community on a national level is abhorrent to me and I mean in every part of the social, political and economic dialogue. From my background and experience, second language issues are the most ignore and misunderstood in this country yet the single most important determinant in both the cognitive as well as the affective domains of Bloom’s Taxonomy when it comes to knowledge and skill acquisition.
Therefore, it was not surprising, albeit dreadfully disappointing and frustrating, that once again, on a national forum, just like in the administration and in other media outlets, the Hispanic population was and is “El Elefante” (like my friend Juan Tornoe of Hispanic Trending says) in the Board Rooms and newsrooms that no one addresses, because they cannot or will not seek out those who have the background, knowledge and experience to represent our point of view-que lastima!
Lastly, there was the failure to discuss how to improve and provide teachers the modern tools-technological tools-they need to accelerate learning in ways traditional teaching tools (pencil-paper/worksheets-textbooks) never have done nor will ever do to engage students in learning-especially in the digital world in which our students were born. Want to know how? Send a comment!

Wednesday, June 24, 2009

Information2ASCII

In earlier post and in my seminars, I have stressed the importance of recognizing the transformation from an Industrial to a New Economy. This New Economy has many names; Knowledge, Information, Network, etc. By what ever name you call it, this transformation is brought to you by: “Information2ASCII”.

The meaning refers to the ability to acquire information due in large part to the conversion of the alphabet into code called ASCII (pronounced ás’kē -standard code for representing characters using the binary system- 0’s and 1’s, bits and bytes a.k.a. digitization) and thus facilitating rapid accessibility and transfer of information for everyone and anyone no matter where. The implications are massive in scope and breath.

They are massive because Information2ASCII (I2A) implies the need to recognize and embrace a fundamental shift regarding the current view or perception in economics and business: Information is not only an unlimited resource but also essentially free.

What does this mean for a business? In the Industrial Age Business Model, resources are viewed as limited. The more limited the resource, the more the cost as production scales. “That model fits limited-resource markets like mining, utilities, and bulk goods, where there's a fixed resource and little technological change.” according to Gregory J. E. Rawlins.

Because of I2A, Information is now available at light speed and it is essential free.
What does this mean for a business today? In the information markets, like education, communications, entertainment, publishing, computers, pharmaceuticals, robotics, and biotechnology it means after certain fixed cost, there are increasing returns. Not only that, but for any business that can figure out how to substitute information for expensive inputs all along their value chain, R&D, production, distribution, administration, operations, marketing, cost of sale etc., their profits will increase as free cash flow. This is the business model to recognize and embrace in order to begin the transition to a New Economy. How to do that is the subject of my seminars and further blogs. (to be continued)

Thursday, January 8, 2009

Automobile Executives and Change-Is it an Oxymoron?

In his most recent book, Hot, Flat and Crowded, Thomas Friedman quotes Michael Mandelbaum on page 108: “People don’t change when we tell them they should. They change when they tell themselves they must”.

I was reminded of this watching and listening to the top executives of the major automobile producers speaking before the House Financial Services Committee members. Did you sense a bit of frustration on the part of the committee members? I sure did! But what really frustrated me was the lack of questions and or suggestions on the part of both the congressmen and the auto executives on innovative and creative ways to solve the many problems facing the auto industry today. As the author of Panasonic, Francis McInerney has been saying for years, it is “cash wait states” because of “out dated distribution channels” in the context of today's Information Age and businesses' operating at "warp speed".

When McInerney says cash wait states, payable, he means how long does a business or enterprise wait for payment for their product or service once the product leaves the production facility or factory or the service is provided. Because of the velocity at which all businesses' operate today, velocity of cash and capital is crucial to remain competitive and achieve scalability. In the auto industry, when the unit leaves the assembly line, shipped to the dealer, placed in inventory, sold by the sales person-who does not work for the auto maker-financed and then money sent to the auto maker, it could be 130-145 days. Even longer today if the vehicle is a “gas guzzler”. You might say “so what’s new”? Apple!

Apple’s payables are at worst two days. In a world where speed-velocity-is crucial, there are many lesson the auto industry could learn from Apple. One is how important controlling the point-of-sale is in today’s business environment for building brand superiority. Apple owns the retail store and is opening more stores while other retailers are suffering-even before the economic tsunami of two months ago. The enthusiastic, well-informed people at the Apple Stores work for Apple-they help build brand superiority for Apple. The car salesperson works for the dealer(franchise) in the particular state and town where they live. Their loyalty, if any, is mainly to the dealership that hired him or her and pays their salary and not the auto maker. Any feedback about the quality or performance of any particular vehicle may take months or years to filter upwards to the automaker, provided the customer feedback is welcomed and seriously considered by the OEM-the auto maker-for future innovation and/or product development. This distribution model needs immediate overhaul.

How long did it take for the message to stop making SUV’s take and did the automakers’ listen? Are they listening now? How willing and more importantly, how open are the folks who run the auto industry to adapting to change.

Don’t get me wrong, the automakers need the local dealers for service and parts. And I do admit I am not in the auto industry, so I am sure there are many more qualified and experience people looking at these issues, at least I hope so.

What I am is a concerned auto enthusiast. I feel terrible about the circumstances in which the auto industry has put itself-mainly from the auto executives and their struggle with outdated distribution channels. Donald Keough former executive at Coca Cola mentions in his recent book The 10 Commandments for Business Failure that one of the commandments for failure is for executives of large established companies to isolate themselves from their customers and markets will insure business failure. Surely, in a business environment where the consumers are not only in charge but where they figuratively have been handed the keys to the factory in most business sectors because of the Internet, the last thing executives and their decision makers want is to be isolated from their customers.

We should all be asking for answers, after all the taxpayers of the United States are now shareholders and we seem to be buying more and more into companies who do not suggest any changes for improvement and congressmen or the media who do not ask enough questions as to how change will happen given the circumstances of today’s business environment. As Nicola Machiavelli said and Don Keough quoted in his book: “For this is a tragedy of man, circumstances change but he doesn’t”

Open Letter to President-elect Obama

I agree with President-elect Obama that we all have to work together and that it is time to act. This is why I feel compelled to write this open letter. What I am about to write is not found in economic textbooks even though it has been more than fifty years since Robert Solow introduced the idea of "Incresing Returns" and almost twenty years since Paul Romer expanded on Solow's ideas and introduced us to a "New Growth Theory" (for a non-economist explanation of Increasing Returns read: Knowledge and the Wealth of Nations by David Warsh). My suggestions are an outgrowth of both Solow's and Romer's ideas, placed in todays' contexts. I believe in our President-elect's ability to explain new and innovative approches to solving our nations economic ills with confidence, to a country ready for something new and creative.

Other than infrastructure upgrades, I would like to hear about innovation that results in sustained productivity not only in the short term but also in the future, rather than just spending money on traditional industrial age, legacy solutions. Someone within this incoming administration needs to talk about, plan and implement strategies for the re-intermediation of workers who, for what ever reason, have lost their jobs-disintermediated-in the production sector.

I suggest alternative, creative solutions, albeit little known, to move away from limited-resource markets-based on the old enterprise logic of Production Management-from the industrial economy. As Romer said in an interview with Reason Magazine: "New Growth Theory shows that economic growth doesn't arise just from adding more labor to more capital, but from new and better ideas expressed as technological progress". Instead, train people as knowledge workers in areas of information markets like communications, entertainment, EDUCATION, publishing, computers, robotics, biotechnology and other sectors we have not even created. Information is an unlimited resource; in fact information is virtually “free”. The tools for this policy implementation are ubiquitous and it could happen smoothly and quickly. The “tools”-computerized products and other appliances with which we connect to the Internet-are also available and affordable. (No shovel in the ground or asphalt needed here!) We would be training and familiarizing knowledge workers for the here and now while also preparing them for the future. The future of value creation is in establishing and maintaining networks among and between knowledge workers allowing for the collaboration needed in all phases of business organizations or enterprises for innovation, growth and sustainability. This takes advantage of digitization and all the new and exciting business ideas that are transforming business models-a la Chris Anderson and The Long Tail. The key for innovation is “mass collaboration” or taking advantage of the Architecture of Participation-read Wikinomics.

Redirect away from just thinking of IT as the world of "techies" or technology engineers and toward technology enabled resources. This will take a huge intellectual and psychological leap or transformation. The means and the experts that can make this happen already exist. It is time to act!

The Transition and the Transformation

There are two critical aspects of today’s market system business leaders must know about and understand in order for their business sector, company or enterprises to not only survive but also to be productive and profitable.

First of all, a vivid and clear understanding of the transition that is occurring from an industrial economy, based on production management, to a new knowledge economy accelerated by the information age and rooted in customer empowerment. Secondly, the transition in business is part of a greater, larger cultural transformation unlike anything we have seen since Gutenberg’s printing press.

This and subsequent blog postings will feature explanations, observations and elaborations on this most critical juncture.

Until and unless, both the transition and more importantly the transformation are recognized and understood in the context of the technological changes and their impact on our society, system of government, global financial and economic system, we will all be at a loss as to what changes have to be made and implemented to improve and sustain our way of life.