2022 05

Heidelberg Cements sets serious environmental targets

Cement production is responsible for about 8% of CO2 emissions. For the world to become carbon neutral, big cement companies have to do the heavy lifting. Here is short video where the CEO lays out the ambitious goals the company has for 2030.

2022 04

Guerrin feels mission and vision is not sufficient.

Purpose

To offer freedom of choice and movement for a better mobility experience.


Essence


A solution available at all times, for any distance and need.


Mission


Mobility is our reason for being.
Customer satisfaction is our motivation.


Vision


To be a leader in customer satisfaction and grow sustainably.

Source: https://www.guerin.pt/en/about-us/

2020 12

Aenne Burda Doku

2020 11

225 Zufällige Worte (225 Random Words in German) für Brainstorming

Hier sind 225 zufällig Worte. Man kann sie auch als Excel Tabelle herunterladen.

McDonald’s finds success with going back to basics

The Economist reports:

The seeds of the revival of McDonald’s started with a simple decision that is surprisingly easy to get wrong: go back to basics. From 2015 onwards, it pared back its array of menu offerings and focused on price and quality. It recommitted to Ray Kroc’s beloved business model, increasing the share of franchises last year to 93% (of almost 39,000 restaurants), up from 82% in 2015. That provided it with higher-margin and steadier royalty and rental income. It streamlined its sprawling international operations, selling control of its restaurants in China and Hong Kong. The results were impressive. Across McDonald’s sales exceeded $100bn last year; its operating margins, thinner than a frazzled patty in most of the restaurant industry, ballooned to 43%. And its share price sizzled. Since 2015 its market value has almost doubled to $160bn.

Full Story at Economist.com

2019 07

Curious First in the World: KLM airline wants its customers to fly less.

KLM wants its customers to fly less. What does this mean for what are KLM’s fundamental goals?

2019 01

WEBA (Weaving Company Appenzell), Switzerland

This is an information video how WEBA (Weaving Company Appenzell), Switzerland, is able to produce high cloth for shirt fashion designers.

Former Southwest Airlines CEO’s Personal Fundamental Objective

“Anybody who seeks wealth as an end in itself is always going to be disappointed,” he said in 1995. “What you really should be doing is seeking excellence in achievement.”


Source: Washington Post Obituary

2018 11

Eastern Switzerland Region from which to draw firms for histories.

 

2016 07

“All the news that fit on smartphone”: NYT continues to face transformation challenge

The NYT Times has worked hard to cut costs and get people to pay for digital content. It has been more successful in this quest that many other newspapers around the world.  But as more and more people read their news on smartphones, it faces challenges from digital-only news sources. Politico has published an insightful piece on the big transformation that still lies ahead for the NYT if it wants defend its position as leading news organization.

Politico.com: New York Times braces for big change

2016 06

African CEO of Credit Suisse faces revolt

As far as I can tell, Thian is trying to move Credit Suisse in the right direction to make the firm more sustainable. But a large fraction of employees is in open revolt again him. Will be successful. The NYT reports: “When Tidjane Thiam took over at Credit Suisse last July, he laid out a new direction for a financial giant with a storied investment banking history: Do less investment banking. [...] One year in, Credit Suisse stock is down 50 percent. And the investment bank, the second largest in Switzerland after UBS, is in open revolt.” Read full story.

2016 02

The 10 Most Valuable Brands in Australia

Australia’s most valuable brands. I would have not guessed them correctly.

2015 10

Beyond Profits: Tesla’s fundamental objective to hasten the transition to electric vehicles

Elon Musk gave an interview that makes it clear that the fundamental objective for Tesla is not profits.

 

2015 09

How much uncertainty is there in different industries

Jeff Dyer, Nathan Furr, and Curtis Lefrandt have put together a useful graphic on the relative uncertainty in different industries.

Game Theory:  Why it became so popular and why it often is hard

John Cassidy explains in the New Yorker:

Kickstarter reincorporates itself as “public benefit company”

The founders of Kickstarter wanted to ensure that their company does not stray from their fundamental objective of ““help bring creative projects to life.” Now they have reincorporated themselves as “public benefit company”.  The NY Times reports:

2015 04

Tesco Business Model in Trouble

The economist reports on the trouble of Tesco as UK consumers shopping habits change and the German discounters Aldi and Lidl roll our their operational models in the UK.

By any measure the figures were eye-popping, worse even than most analysts had expected of the struggling company. Tesco made the largest pre-tax loss, of £6.4 billion ($9.6 billion), in British retail history, eight times as much as the previous record, set by Morrisons last year. This was also the sixth-largest loss in the country’s corporate history. Most of it (about £4.7 billion) was due to a fall in the property value of Tesco’s British stores. This was not merely an accounting matter, but a sign of how its out-of-town hypermarkets have fallen out of favour with consumers who shop online or use smaller convenience stores. Underlying profits were 68% down on the previous year, at £961m, and overall sales were down by 1.8%. The stock that Tesco keeps in its warehouses is worth £570m less than previously thought, and the pension scheme is £3.89 billion in deficit. And so on.

Full Story on Economist.com

Gerhard Steidl’s Fundamental Objective for his Printing Business

Gerhardt Steidl was asked: Many people call you the “king of printing” and some artists will trust no one else with their books. In what way are Steidl’s books different than other books?

He replied:

Most of the publishing houses in the world are owned by shareholder companies and their interest is to make profit. My publishing house is a private business. I founded it in 1968 and it is still owned by me. It is a family business. It is a Manufaktur and we don’t set any limits on cost. A Steidl book is always made in Germany, in Göttingen, in Düstere Straße 4 and there is a guy, Gerhard Steidl, who is hands on. So, believe it or not, I oversee every sheet that tumbles out of our press. This craftsmanship and this know-how we bring to every one of our babies, our books, makes a huge difference compared to the production processes of other companies.

Source:  The Talks

Short Case Study of Oracle’s Transformation

The Arc of Company Life - and How to Prolong it provides a good story case illustration using the transformation of Oracle


oracle

2015 03

Bookshops are closing, here is new business model for a pop-up bookshop

I have seen a lot of bookshops go out of business, including the famous bookshop on Telegraph Avenue in Berkeley. From Adelaide comes a new business model for having a physical bookshop that moves to different locations in the city.  A pop-up bookshop. The owners write:

Curating an ever-evolving, eclectic mix of old, new and collectible books (in itself somewhat out of step), we’ve popped up in various locations, in various styles, within Adelaide’s CBD. On the street, at boutique markets, in cafes, empty shopfronts, arcades. The idea being that by putting ourselves in plain view, we remind people that bookshops exist.

Well, that’s our story too. In November 2013, we pushed ourselves by leasing a space on Adelaide’s main retail strip, Rundle Mall. Next door to French Connection, across from Nespresso, sharing mall frontage with Apple and Nike. It was a make-or-break philosophy – and we received the most amazing reactions from the public who just couldn’t believe what they’d stumbled upon. It lasted four months and we were encouraged enough by that success to give Rundle Mall another go this year. We’re putting a bookshop on the main stage in a city where people constantly – interminably to us – decry the fact there are “no bookshops in Adelaide”.

But how can this work? Our bookshop is a business. Businesses survive by making money. Bookshops don’t make enough money to pay big rents. All these statements are true, more or less. All we have is a complete, unfaltering faith that what we’re doing is worthwhile and important and, because of this, we’ll be OK.

At the moment, we sell just enough books to pay our wealthy landlord, buy stock and cover our modest living expenses. It’s long hours, risky and stressful but we love it. We need to make money to survive but aren’t driven by money. In fact, the short answer to the “how can it work?” question is that we sacrifice money for lifestyle. We treat it as a seasonal occupation, working unsustainably hard for a short period of time then taking a break.

 

Full Story in the Guardian

Fundamental Redesign of CIA Organizational Structure

The director of CIA has decided to that CIA needs a radical overhaul of its structure.  The NY Times reports:

Drawing from disparate sources — from the Pentagon to corporate America — Mr. Brennan’s plan would partly abandon the agency’s current structure that keeps spies and analysts separate as they target specific regions or countries. Instead, C.I.A. officers will be assigned to 10 new mission centers focused on terrorism, weapons proliferation, the Middle East and other areas with responsibility for espionage operations, intelligence analysis and covert actions.

During a briefing with reporters on Wednesday, Mr. Brennan gave few specifics about how a new structure would make the C.I.A. better at spying in an era of continued terrorism, cyberspying and tumult across the Middle East. But he said the current structure of having undercover spies and analysts cloistered separately — with little interaction and answering to different bosses — was anachronistic given the myriad global issues the agency faces.

During his two years as C.I.A. director, Mr. Brennan has become known for working long days but also for being loath to delegate decisions to lower levels of C.I.A. bureaucracy. During the briefing on Wednesday, he showed flashes of frustration that, under the C.I.A.’s current structure, there is not one single person in charge of — and to hold accountable for — a number of pressing issues.

Source: NY Times

 

2015 02

Australia Post Swings to Losses in first time in 30 years

The Guardian reports on the problems of the existing business model:

Australia Post has warned its losses will amount to $6bn over the next 10 years unless the government allows it to change the price of sending letters.

The national carrier is forecasting its first full-year loss in 30 years, or since before it was corporatised.

Its chief executive, Ahmed Fahour, said Australia Post had a competitive parcel business, but losses from its letters business were swallowing up profits.

Fahour said the government understood the scale of the problem. “They either fund the next 10 years of losses, which could amount to $6bn, or we’re out of business,” he told Fairfax radio on Monday.

Australia Post reported a first-half profit after tax of $98m, down 56% on the first-half result of the previous year.

The letters business lost $151m, 57% worse than the loss in the first half of last financial year.

Fahour said Australia Post had never been subsidised and had always paid dividends to the government, but the world had changed.

“Either we get a massive injection from the government to keep the business going, or they give us the permission to manage the business and therefore no subsidy is required and the business can continue,” he said.

Letter volume decline accelerated to 8.2% year-on-year, the largest fall recorded since Australia Post’s letter volumes started falling in 2008.

Fairfax had trouble financing existing newspaper operations

The Guardian provides an update on how Fairfax, a company we features in our course 7 years ago, is doing:

Hywood counters by claiming that readership has never been higher – Fairfax’s website is the most popular news site in the country, and a barely-believable 5.1 million visitors access it every month. However, this is missing the point.

It is not readers, it is revenue that is needed to run those great full-service newsrooms. And cut-throat competition has driven online advertising through the floor – for every dollar a newspaper loses in print advertising it is lucky to recoup 10 cents online. Few newspapers are lucky enough to be owned by a trust, rather than accountable to shareholders, like the Guardian, or to attract a fairy-godfather like Amazon’s Jeff Bezos, who has adopted the Washington Post.

Hywood’s solution has been to diversify into a dozen different fields. Fairfax’s metropolitan newspapers now produce less than half its revenue. The company has morphed into selling baby goods, organising fun runs and ocean swims, a dating service, a real estate site. It has partnered with Channel Nine to launch a video-to-the-home service, though many fear this will end in tears. Apart from its unlikely name of Stan, it is about to face formidable competition from the world’s largest and most aggressive player in video-streaming, the US giant Netflix, which launches in Australia next month.

But many fear these ventures are just postponing the inevitable demise of the newspapers that have chronicled the country since the earliest days of white settlement, leaving Murdoch, at least for now, with a monopoly on everything Australians read in print. “They’ve saved the company, but f——d the papers,” as one analyst told me.

2014 04

The Rapid Decline of Printed Guidebooks

The digital revolution is devouring printed travel guides. Lonely planet is a case in point.  The BBC bought the company forf $210 in 2007 and sold it last year for roughly $121 million. Here is a instructive figure charting the decline in printed guide sales.


Lonely Planet and the rapid decline of the printed guidebook

Microsoft’s New CEO Nadella on how to organize for innovation

In a wide-ranging interview with the NY Times, Nadella explained his views on how to organize for innovation.

Q. Your company has acknowledged that it needs to create much more of a unified “one Microsoft” culture. How are you going to do that?

A. One thing we’ve talked a lot about, even in the first leadership meeting, was, what’s the purpose of our leadership team? The framework we came up with is the notion that our purpose is to bring clarity, alignment and intensity. What is it that we want to get done? Are we aligned in order to be able to get it done? And are we pursuing that with intensity? That’s really the job.

Culturally, I think we have operated as if we had the formula figured out, and it was all about optimizing, in its various constituent parts, the formula. Now it is about discovering the new formula. So the question is: How do we take the intellectual capital of 130,000 people and innovate where none of the category definitions of the past will matter? Any organizational structure you have today is irrelevant because no competition or innovation is going to respect those boundaries. Everything now is going to have to be much more compressed in terms of both cycle times and response times.

So how do you create that self-organizing capability to drive innovation and be focused? And the high-tech business is perhaps one of the toughest ones, because something can be a real failure until it’s not. It’s just an absolute dud until it’s a hit. So you have to be able to sense those early indicators of success, and the leadership has to really lean in and not let things die on the vine. When you have a $70 billion business, something that’s $1 million can feel irrelevant. But that $1 million business might be the most relevant thing we are doing.

To me, that is perhaps the big culture change — recognizing innovation and fostering its growth. It’s not going to come because of an org chart or the organizational boundaries. Most people have a very strong sense of organizational ownership, but I think what people have to own is an innovation agenda, and everything is shared in terms of the implementation.

Source:  NY Times

2013 10

Two Diagrams that show why PC makers have trouble

image

Click on “more” to see chart that combines PC and tablet sales.

2013 04

AOL tries to reinvent its business model

AOL, whose dial-up internet business was destroyed by fast cable, DSL and not mobile phone internet connections connections (see graph) is trying to reinvent itself as a content company. It was to write local news and take the Huffington Post global.  Read details on Economist.com:  AOL’s second life.

image

 

SM4 Course Outline

Strategic Management 4 is all about the need for an organisation to revisit and redefine its business model in response to, or in anticipation of, sustained poor performance.

Download Full Course outline.

2013 03

Why Dell is going private to turn-around its business

Michael Dell believes that the stock market will be able to stomach further profit declines that are required to make investments for the turnaround.

Mr. Dell told the board that the only way out involved changes in the company’s business model and expensive investment in new products and services. “Implementing such initiatives would require additional investments that could weaken earnings and cause greater volatility in the performance of the common stock,” the filing said Mr. Dell argued in a Dec. 6 meeting.

“Mr. Dell stated his belief that such initiatives, if undertaken as a public company, would be poorly received by the stock market because they would reduce near-term profitability, raise operating expenses and capital expenditures, and involve significant risk.”

Source: WSJ.com

 

2013 02

Michael Dell: I did not see rapid decline of PC market coming

To win more time to turn around Dell, Michael Dell with the help of a private equity partners is taking Dell Computer private again. One of the reason the turnaround since 2007 has not been sufficient is that tablets have eaten into the market for PC in a way that Dell did not expect. The WSJ reports: “When asked in a 2011 interview with The Wall Street Journal what surprised him most since he returned as Dell CEO in 2007, Mr. Dell said the rise of tablets had been unexpected for him.

“I didn’t completely see that coming,” he said, before adding that he didn’t anticipate business users would give up PCs soon.”

2013 01

Microsoft Offers Office in the Cloud and a New Price Model

The WSJ reports: “Microsoft’s newest version of Office, available starting Tuesday, is a radical change from the past. For starters, Office 365 has a surprising new price model: It is available as a subscription that can automatically renew each year, if you choose. This new system constantly updates program features year round. Every time you open a program in Office, you will be running the latest version.”

Syllabus for Wharton MGMT 782 Course Fall 2012

Syllabus is available for download here: MGMT-782 Syllabus

2012 12

Tim Cook - Time’s Almost Person of the Year

Time had nominated Tim Cook, Apple’s CEO as a candidate for the Person of the Year. Will Cook be able to make Apple come out with another revolutionary product, revealing to us what Steve Jobs saw in Cook. In any case, here is how Cook was recruited by Jobs to Apple.

Almost immediately after he arrived at Compaq, Cook began to get calls from Apple’s headhunters. Jobs was back from exile — he was pushed out from Apple in 1985, then rehired 12 years later — and he wanted to bring in somebody new to run operations. At that point Apple was generally considered to be in a death spiral — that year alone, it lost a billion dollars — and Cook had no interest whatsoever in moving. But Jobs was a legend in the industry, so Cook sat down with him one Saturday morning in Palo Alto. “I was curious to meet him,” Cook says. “We started to talk, and, I swear, five minutes into the conversation I’m thinking, I want to do this. And it was a very bizarre thing, because I literally would have placed the odds on that near zero, probably at zero.”

Cook was interested in Jobs’ strategy, which he describes using a favorite Cook expression, doubling down: “It was the polar opposite of everyone else’s. He was doubling down on consumer when everybody else was going into enterprise. And I thought it was genius. Compaq was doing so poorly in consumer, didn’t have a clue how to do consumer. IBM had left. Everybody was kind of concluding that consumer business is a loser, and here Steve is betting the company on it.”

 

Full Story on Time.com

How HP got duped into overpaying billions for Autonomy

HP once was the icon of good management. But for the past 10 years it has gone through several CEOs and the middle of a turnaround has to write off $9 billion dollars because it acquisition of Autonomy turned out to be a fiasco. HP alleges that Autonomy mis-represented its financial worth. The founder of Autonomy claims that HP destroyed Autonomy within one year.
Read the stories in

Dealbook New York Times

WSJ.com

Economist.com

But here is also a voice that articulates that if you are buying a company to secure your future, many deals will go wrong but some may go right and prevent you from becoming irrelevant.
Acquisitions is like doing R&D with a high failure rate.

Executive Reshuffle at Apple: Scott Forstall is out

Tim Cook take his first major step of reshaping the top executive ranks at Apple. It appears that a battle was brewing within Apple for some time about key design philosophies. Scott Forstall, who apparently has been branded as not being a team players, stumbled of the debacle with the Apple maps.

Read the detailed stories in LA Times and NY Times

2012 10

Citi Chairman Is Said to Have Planned Chief?s Exit Over Months

Citibank’s CEO Viram Pandit was removed through a boardroom coup. There are two questions that the episode raises. Was Pandit truly oblivious to the what the chairman Michael E. O’Neill was up to? Did O’Neill in the end do CITI a favor or has done long-term damage to the morale of the high-level employees.  The NY Times reports:

Vikram Pandit’s last day at Citigroup swung from celebratory to devastating in a matter of minutes. Having fielded congratulatory e-mails about the earnings report in the morning that suggested the bank was finally on more solid ground, Mr. Pandit strode into the office of the chairman at day’s end on Oct. 15 for what he considered just another of their frequent meetings on his calendar.
Michael O’Neill is said to have begun building a case to force out Mr. Pandit after Mr. O’Neill became chairman in April.
Instead, Mr. Pandit, the chief executive of Citigroup, was told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his. The abrupt encounter, described by three people briefed on the conversation, included a terse comment by the chairman, Michael E. O’Neill: “The board has lost confidence in you.”

Read full story on NY Times.

Microsoft Rumored to Become more like Apple in major Strategy Shift

Microsoft is rumored to imitate Apple’s strategy of making both software and hardware.

Microsoft (MSFT) is currently in the midst of a major transition unlike anything the company has dealt with in the past. According to our own sources and multiple subsequent reports, Microsoft is working on its own smartphone. While this would mark the first time Microsoft has launched a self-branded smartphone (we’re not counting the KIN), the implications for the company are much greater than just a phone. Noted industry insider Eldar Murtazin has written a lengthy piece on the company’s upcoming Windows Phone plans, but has also explored some of the reasons why Microsoft is being forced to make its own tablets and smartphones, and most likely its own laptops and desktops as well in the near future.

Source: Yahoo News

T-Mobile buys and merges with Metro PCS: Will it succeed?

After the government did not allow ATT to buy T-Mobile, T-Mobile needed to find a different way to achieve scale and cut costs. Today it announced buying and merging with Metro PCS. Will the firm be able to avoid the fiasco of the Sprint/Nextel merger?

T-Mobile and MetroPCS will continue to operate as separate brands. Throughout the morning, T-Mobile executives sought to allay one of the biggest concerns about the merger, the incompatibility of the company’s network with MetroPCS’ own. John Legere, who will become the chief executive of the combined network operator, argued that the company will slowly move MetroPCS’ customers to its own GSM standard — with the goal of moving the unified entity to the Long Term Evolution technology down the road. The aim was to avoid comparisons to Sprint’s merger with Nextel, which failed at the same task and left that merged company in a far weaker position.

Full Stor

Meg Whitman is trying to turn HP around

HP has been falling behind Apple and Google and the race to be the leading Silicon Valley company. Now Meg Whitman is trying to turn this former star company around. The NYT reports.

So now Ms. Whitman is focusing her energy on H.P., the company founded by the tech legends William Hewlett and David Packard. Bill and Dave, as they are referred to at the company, spawned Silicon Valley. Last year, H.P. posted revenue of $127 billion. It employs 320,000 people directly, and easily that many again through a network of manufacturers and computer resellers across 170 countries.
TWENTYyears ago, people like Steve Ballmer at Microsoft, Larry Ellison at Oracle, and John Chambers at Cisco Systems heard Kenneth Olsen, then the leader of Digital Equipment Corporation, deride the PC as unsuited for business. Within a few years, DEC had been gobbled up by Compaq Computer. Everyone knows viscerally how fast change can overtake a legacy business — and how hard it is to change.
There’s little glory in managing decline, particularly in an industry in love with what’s next. Apple’s tablets are taking share from PC makers like H.P., but only after Apple had a near-death corporate experience that ended with the return of Steve Jobs. He created a new reality for Apple with its retail stores, something that H.P. can’t copy to sell PCs. I.B.M. also transitioned successfully after billions in losses and years of cuts. Most others ended like DEC.

Full Story

2012 09

Why Apple wanted to wave its own Maps Application and dumped Google’s prematurely

Yesterday the Apple CEO apologized for Apple’s crummy maps application in iOS 6. The WSJ reports on the financial reason why Apple wanted to dump Google maps.

Maps are a big piece of the Apple-Google rivalry. Opus Research has estimated that mobile ads associated with maps or locations account for about 25% of the roughly $2.5 billion spent on ads in mobile devices in 2012. Google has had mapping software since 2005, and a Google Maps app was pre-installed on the first iPhone starting in 2007. Apple only began building its maps software in 2009 under Mr. Jobs, with an eye toward making its version the default mapping app on the iPhone and, later, the iPad. Apple acquired several companies to construct its mapping technology, as well as using information from third parties, such as navigation system maker Tom Tom NV, before it was ready to boot Google Maps.

Source: WSJ.com

Home Depot changes its strategy in China after failing to achieve its targets

Home Depot is not the first company to find out that the strategy that worked well back home does not work in a foreign country. Wal-Mart failed in Germany not realizing that the competitive landscape was different. Starbucks failed in Australia, closing most of its shops because the Australian consumer was used to much sophisticated coffee. The WSJ journal reports on the changes in the Home Depot China strategy after failing to implement the previous one successfully.

Home Depot Learns Chinese Prefer ‘Do-It-for-Me’
The largest U.S. home-improvement retailer, which entered China in 2006, has struggled to gain traction in a country where cheap labor has stunted the do-it-yourself ethos and apartment-based living leaves scarce demand for products like lumber.
Home Depot conceded that it misread the country’s appetite for do-it-yourself products. “The market trend says this is more of a do-it-for-me culture,” a Home Depot spokeswoman said of China.Home Depot is shaking up its strategy by focusing on specialty stores. Three months ago, it opened one paint-and-flooring store and one home-decorations outlet in the northern port city of Tianjin to cater to specific needs and shopping preferences shown by Chinese consumers, the spokeswoman said. It also plans to launch online operations with a Chinese partner, she said, without naming the company.

Home Depot debuted in China with a 12-store acquisition six years ago and the number has since dwindled as it found that Chinese consumers differ from their global counterparts. As Swedish furniture giant IKEA discovered, Chinese consumers will pay for people to do the work for them. Several years ago, the furniture store added services to help customers assemble their furniture.

Home Depot’s closures will cause the company to take a $160 million after-tax charge in the third quarter, a company statement said. The charge will be equal to about 10 cents per diluted share, and will include the impairment of goodwill and other assets, lease terminations, severance and other charges associated with closing the stores.

Full Story

Deutsche Bank lowers ROE target from 25% to 12%

When a company has a very high financial targets, employees are encouraged to do everything possible to achieve it, which in turn may lead to an unwanted increase in the level of risk that the firm faces. As the FT.com reports, the new leadership of the Deutsche Bank determined that the target was to high. They may have felt that they needed to curb the risk taking in the bank.

Deutsche’s new co-chief executives are expected to make a decisive break with the decade-long era of Josef Ackermann, their predecessor, when they will drop a target of generating a 25 per cent pre-tax return on equity. At a strategy presentation in Frankfurt after 100 days in charge of the bank, Anshu Jain and Jürgen Fitschen are set to announce a “substantially lower return on equity target”, one person close to the situation said.High quality global journalism requires investment. They are also expected to unveil a strategy for much closer integration of the bank’s business lines, make significant changes to the bank’s bonus model and give more details on a plan to take out €3bn of costs.Analysts estimate that the new goal could be in the region of 12 to 13 per cent ROE after tax – a benchmark more commonly looked at by investors than the pre-tax figure.

Full Story on ft.com

More Details on how Apple invented the iPhone

Slate reports:

This is the story of how Apple reinvented the phone. The general outlines of this tale have been told before, most thoroughly in Isaacson’s biography. But the Samsung case—which ended last month with a resounding victory for Apple—revealed a trove of details about the invention, the sort of details that Apple is ordinarily loath to make public. We got pictures of dozens of prototypes of the iPhone and iPad. We got internal email that explained how executives and designers solved key problems in the iPhone’s design. We got testimony from Apple’s top brass explaining why the iPhone was a gamble.
Put it all together and you get remarkable story about a device that, under the normal rules of business, should not have been invented. Given the popularity of the iPod and its centrality to Apple’s bottom line, Apple should have been the last company on the planet to try to build something whose explicit purpose was to kill music players. Yet Apple’s inner circle knew that one day, a phone maker would solve the interface problem, creating a universal device that could make calls, play music and videos, and do everything else, too—a device that would eat the iPod’s lunch. Apple’s only chance at staving off that future was to invent the iPod killer itself. More than this simple business calculation, though, Apple’s brass saw the phone as an opportunity for real innovation. “We wanted to build a phone for ourselves,” Scott Forstall, who heads the team that built the phone’s operating system, said at the trial. “We wanted to build a phone that we loved.”

Full story on Slate

2012 08

Apple vs. Samsung Trial Reveals a lot of data on the firms’ stratetigies

Ina Fried of the WSJ’s All Things Digital is following the Apple-Samsung Trial and is providing an analysis of all the information the typically secretive Apple is forced to reveal.

Apple vs. Samsung Trial Forces Companies to Open Up the Books

At the bottom of the article are links to her other commentaries on the trial.

2012 06

Institutional Environment and Evolutionary Dynamics

Dan Levinthal organized a workshop on Evolutionary Perspectives on Strategic Management. Dick Nelson and I faciliated the fourth day on Institutional Environment and Evolutionary Dynamics. Here you can download the syllabus for the day day and the presentation slides.

Syllabus
Presentation Slides

Tim Cook Interview at DX: Following Steve Jobs

Tim Cook was interviewed about a range of topics at DX, including Steve Jobs.

Jobs Was an Awesome Flip-Flopper, Says Tim Cook (Video)

Here is a summary on the remarks on Steve Jobs leadership style.

6:33 pm: Walt: How is Apple different with you as the CEO?
“I learned a lot from Steve. It was absolutely the saddest day of my life when he passed away.”
“At some point late last year, I sort of — somebody kind of shook me and said, ‘It’s time to get on.’” That sadness was replaced by his intense determination to continue the journey.

6:34 pm: What did I learn from him? Focus.
“You can only do so many things great, and you should cast aside everything else.”
Cook says that not accepting things good or very good, but only the best, “that’s embedded in Apple.”
“I’m not going to witness or permit the change of that.”
“He also taught me the joy is in the journey, and that was a revelation for me.”
Cook also made a reference to the fact that Jobs stressed the importance of owning the key underlying technologies.
As for moving on, Cook says: “I love museums, but I don’t want to live in one.”

6:37 pm: Cook says he is committed to preserving the culture of Apple.
“It is not that easy to duplicate, either,” Cook says.
“If they could, everybody would be like this,” Cook says. “You can’t get a consultant report” and change to be like Apple.

 

And then it is turtles all the way down…

From Wikipedia:
The origins of the turtle story are uncertain.
The most widely known version appears in Stephen Hawking’s 1988 book A Brief History of Time, which starts:

A well-known scientist (some say it was Bertrand Russell) once gave a public lecture on astronomy. He described how the earth orbits around the sun and how the sun, in turn, orbits around the center of a vast collection of stars called our galaxy. At the end of the lecture, a little old lady at the back of the room got up and said: “What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise.” The scientist gave a superior smile before replying, “What is the tortoise standing on?” “You’re very clever, young man, very clever,” said the old lady. “But it’s turtles all the way down!”
—Hawking, 1988

 

2012 05

After crashing on a demonstration flight, will the new Russian jet ever find sufficient customers

Getting 85% percent right in strategy implementation is not sufficient when it comes to airplane product. The previous example of the A320 which crashed on early test flights shows that it is crucial that plane crash is due to human error. NY Times reports:

Until a crash inquiry is done, analysts said, Sukhoi will have difficulty marketing the Superjet. “It would be entirely understandable for any potential customer to hold off until it’s determined whether the cause was human error or mechanical failure,” said Sash Tusa of Echelon Research and Advisory in London.
While it is rare for such a young aircraft to crash, it is not unprecedented — an Airbus 320 crashed during a demonstration flight in 1988, killing three people and injuring 50. Investigators determined that the cause had been pilot error and found no evidence of a malfunction. The A320 went on to be one of the world’s best-selling aircraft models.
If analysts identify human error as the cause of the plane’s crash, most of the existing 240 Superjet orders will stay on the books, Mr. Tusa said, but “if it turns out there is some kind of major design flaw with the aircraft, those orders aren’t worth the paper they are written on.”

  Full Story on NY.Times

2012 04

Honeywell’s spectacular turnaround

The Economist reports an amazing on an amazing turnaround of Honeywell. It appears to be a great example of strategy implementation.

Honeywell likes its meetings short but plentiful. Every production cell, as the smallest shop-floor unit is called, starts the day with one. The aim is to try to identify problems and ideas for improvements, which are then pushed up to senior managers. Even the lowliest worker is expected each month to come up with two implementable ideas for doing things better. As an illustration of the firm’s devotion to “continuous improvement”, this is one of the pillars of what has become known as the “Honeywell operating system” (HOS).

This new production system, introduced over the past eight years, has helped transform Honeywell from a troubled giant to one of America’s most successful companies. Honeywell’s sales in 2011 were 72% higher than in 2002, and its profits doubled to $4 billion. A new emphasis on generating cash also means the firm has more money in the bank for every dollar declared in profit.

Full Story at Economist.com

Department of Justice Files Suit Against Apple and Major Publishers of ebooks

Apple did not join the settlement of the lawsuit. This is a major win for Amazon. It will be fascinating to watch how the suit will unfold.

Details:
Apple should settle suit
Associated Press on Suit April 11

 

Reversal of Fortunes: In smartphones Microsoft is in the position that Apple was in the PC era

The New York Times reports on this amazing reversal of fortunes.

Microsoft’s weak position in mobile apps is in stark contrast to the clout it had with developers in the heyday of the PC era. Its success with Windows was partly built on an all-out effort it made in the 1980s and ’90s to get independent software companies to make Windows the primary operating system for which they wrote applications.That influence began to weaken somewhat when the Web era took off and more companies began to design services and products that ran through browsers. But it has accelerated further as much of the creative talent in the developer world has shifted toward smartphone and iPad applications. Sarah Rotman Epps, an analyst at Forrester Research, said Microsoft’s relative weakness was a function of not having a big enough audience of users. “Developers go where the money is, and the money is where people are,” she said.

Full Article at NY Times

2012 03

Vertical Integration Works for Apple—But It Won?t for Everyone

Wharton professors explain why Apple integrated model of designing both hardware and software may not work for other companies. Knowledge@Wharton reports:

Google recently acquired mobile device maker Motorola Mobility and will soon manufacture smartphones and television set-top boxes. Amazon’s Kindle Fire tablet represents its bridge between hardware and e-commerce. Oracle bought Sun Microsystems and now champions engineered systems (integrated hardware and software devices). And even long-standing software giant Microsoft now makes hardware for its Xbox gaming system. Technology titans are increasingly looking like vertically integrated conglomerates largely in an attempt to emulate the success of Apple.Vertical integration dictates that one company controls the end product as well as its component parts. In technology, Apple for 35 years has championed a vertical model, which features an integrated hardware and software approach. For instance, the iPhone and iPad have hardware and software designed by Apple, which also designed its own processors for the devices. This integration has allowed Apple to set the pace for mobile computing. “Despite the benefits of specialization, it can make sense to have everything under one roof,” says Wharton management professor David Hsu.

Read full story.

JetBlue to Review Procedures After Pilot Meltdown: CEO

A pilot on a JetBlue flight had a complete mental meltdown. The co-pilot had to lock him out the cockpit and passengers had wrestle him down and constraint him with their belts. If you are the CEO, what you want to know know is whether this was an isolated incident (which can always happen) or whether your HR systems are not properly design. For this reason it makes sense that the CEO ordered a review.  Read full story here.

1985 Steve Jobs is fired, Bill Gates sends letter to John Sculley urging him to license Mac OS

Neal Pancholi drew my attention to this interesting letter by Bill Gates. It shows that Gates in 1985 was sill open to making his fortune my selling Mac software rather than dominating the next generation OS.

Tim Cook in a wide-ranging interview talks Apple today (Feb 2011)  and future directions

On Tuesday, Apple CEO Tim Cook spoke at the Goldman Sachs Technology and Internet Conference, where he was interviewed on stage by Bill Shope, Goldman Sachs’s IT hardware analyst. Here’s an edited transcript of what Cook had to say on a variety of topics, ranging from working conditions at Apple’s Chinese suppliers to Apple’s culture and ethos. Transcript

What it takes to do a corporate turnaround

John John Baldoni writes on CBS.com.

Enter Sergio Marchionne. With Fiat was on the brink of solvency in 2004, Marchionne was named CEO and completely revamped the enterprise. He would later do the same at Chrysler. As Clark writes: “Marchionne’s unusual ability is that he can see what actually needs to be done, and then cajoles and goads his flat management structure of dozens of direct reports in weekend meetings to achieve the goal.” “Marchionne doesn’t let go,” A UBS analyst adds. “That’s what his strength is. He is good at strategy and at execution.” Under Marchionne, both Fiat and Chrysler have turned the corner (at least for now).

The balance between vision and execution is akin to right- and left-brain thinking. A visionary thinks about what can happen. He or she has a highly specific vision of the future—and not simply as a set of desired outcomes, but rather in terms of what must occur to produce those outcomes. By contrast, executing the vision requires putting the right people in place and providing them with the necessary resources to succeed. It also means holding people’s feet to the fire. Marchionne is known for firing people who aren’t up to the task. It’s never pleasant, but it is imperative.

Read Full Article on CBSnews.com

 

How Sheryl Sandberg (COO of Facebook) helps women to network

When Facebook goes public Sheryl Sanberg will be a very wealth women. She wants to serve as a role model for other women in business and is actively trying to help them. Here is how she facilitates networking.

If Silicon Valley men bond in venture capital conference rooms or on weekend bike trips, Ms. Sandberg has been building an alternate networking group of Silicon Valley women. For about seven years, since she was a Google executive, she has held catered monthly dinner parties at her home for a group of several dozen women. Guest speakers have included the feminist and author Gloria Steinem; Steve Ballmer, the C.E.O. of Microsoft; and Mayor Michael R. Bloomberg of New York, according to three people who have attended the dinners but spoke on condition that they not be identified out of respect for Ms. Sandberg’s privacy. Ms. Sandberg recently invited Senator Claire McCaskill of Missouri to attend as a speaker. “I expected to see a lot of women in St. John suits and expensive purses and was pleasantly surprised when it was anything but that,” Senator McCaskill said. “Women had been included that were in the infancy of their careers, her kids were running around, it was very low key. It was clear that she’s the kind of role model that young women are looking for, especially in the tech sector.”

Source: NY Times

There is also an excellent long profile of Sandberg in the New Yorker (2011). A Woman’s Place-Can Sheryl Sandberg upend Silicon Valley’s male-dominated culture?

Steve Job trying to build NeXT

This film, following Steve Jobs in the early days of next, show him both as a visionary and motivator but from minutes 15 to 20 as poor manager who did not ensure that deadlines were met by sticking to agreements about product features.

Overview of the Management System of Southwest and the Leadership Style of Herb Kellerher (44 min)

It is useful to compares this to Jack Welsh and Steve Jobs in his later years (1997-2011) when he was much more focused on creating products that would sell in large numbers.

Steve Wozniak summaries Steve Jobs shortly after Jobs dies

You don’t speak ill about someone when they just died. But having read the Isaacson biography of Steve Jobs, Wozniak summarizes summarizes Jobs well.

2012 01

Blackberry has difficulty adjusting its strategy quickly to a changed environment

The leaders of Blackberry did not realized that the iPhone was a real threat until their marketshare had been decimated. The smartphone market is moving so fast that leaders quickly quickly becomes losers because the cannot change quickly enough.  The NY Times reports today:

At the time the first iPhone appeared in 2008, RIM had successfully moved the BlackBerry into the broad consumer market from its base of government and corporate customers. But the company was totally unprepared for the popularity of a phone that lacked a physical keyboard and ran thousands of applications — in effect a versatile Web-connected handheld computer.

RIM’s co-chief executives were initially dismissive of the challenge from Apple, and Mr. Balsillie boasted that the iPhone would enhance RIM’s fortunes by increasing awareness of smartphones.

But the iPhone introduced two broad changes to the smartphone market that had severe consequences for RIM and other phone makers, including Nokia.

The iPhone and its apps shifted the emphasis from hardware to software. Then, the iPhone’s popularity led corporate information technology departments, which once allowed only BlackBerrys to connect to their e-mail networks, to support employees’ iPhones. The arrival of Android-based phones from a variety of manufacturers only compounded RIM’s woes.

Read full story here.

Related: The New Yorker on BlackBerry’s troubles.
Click on “More” for an video message of the new CEO to employees.

 

Can American Society Demand that Apple create more factory jobs in the U.S.?

Now that Apple has become at least temporarily the most valuable company in the U.S and the American workers are hurting it is not surprising that the press is focusing on Apple outsourcing all it manufacturing overseas. This article brings into focus the question that we will discuss in session 4 of the class, namely what is or should be the fundamental objective of a particular firm. Who should decided this? It is possible to have many different fundamental objectives. If “yes”, how and who decides what trade-offs are to be be made.

Apple, America, and a Squeezed Middle Class: How U.S. Lost Out on iPhone Work in NY Times.

New Transparency at Apple under the leadership of Cook?

Notoriously secretive Apple published a list all its suppliers. Is this a sign that Tim Cook wants to break with Steve Jobs policy of keeping as much as possible secret and bring more openness and transparency to Apple? Or is the company simply responding to a new law in California and this disclosure would have happened under Jobs as well?

Read full story by Reuters.

Critics rave about new Windows phone software: Does a new design philosophy take hold at Microsoft?

I was quite puzzled why Nokia would throw out its own smartphone operating system and replace it with Windows since the latter seemed to be quite a dud compared to Apple’s iOS or Android. But today I learned just how good critics think the new Windows operating system is. The NY Times provides an interesting look at how Microsoft finally managed to get a technology out of its company hall that has critics raving.

The tale of how Microsoft created Windows Phone starts with the introduction of the iPhone, in 2007. To Joe Belfiore, now 43, an engineer who oversees software design for Windows Phone, that was the spark.“Apple created a sea change in the industry in terms of the kinds of things they did that were unique and highly appealing to consumers,” Mr. Belfiore said in an interview at Microsoft’s campus here. “We wanted to respond with something that would be competitive, but not the same.”

Read the full NY Times article.

Insider Talk about Reasons for Failure of HP Tablet running WebOS

An article in the NYTimes takes us behind the scenes of HP’s abrupt exit from the tablet market. Palm did not have the organizational capabilities to introduce a tablet into the market. The article suggests that the WebOS operating was fundamentally to flowed to compete successfully with the iPad even when the full organizational resources of HP were thrown behind it. Read article in the NYTimes.

2011 12

Stanford is beaten in NYC project

Stanford had no experience with building a campus in NYC and bowed out the competition to build new campus in NYC because the strength of the Cornell, which had already a lot of experience building in the city. Read full story in NY Times

image

2011 11

Why do a few companies succeed for a long time and most don’t

The economist published two useful articles on corporate longevity. The first article examines why IBM, despite a few crisis, has been able to reinvent itself and celebrate it 100s anniversary in 2011. It contrasts the firm to DELL, Microsoft and others. IBM @ 100

The second uses the context of the failure of outside CEOs HP to questions whether outsiders know enough to run a complex high-tech company. The Trouble with Outside CEO Appointments.

John Sculley insightful interview about the mistakes he made at Apple and about Steve Jobs

I have almost finished reading Walter Isaacson revealing new Steve Jobs biography. But a long interview with John Sculley in 2010 provides additional details that allow us to understand the history of Apple and personal computers much better. Sculley fired Steve Jobs and in this candid interview says that it would have been better if Jobs had been made CEO in 1985.  Read the full interview here.

Fundamental Objective for Founder of HTC is making unique products rather than margin

Chou [CEO of HTC] said he cares more about making unique products than making good profit margins. He listens and acts quickly. Often, when Beats co-founder and music producer Jimmy Iovine calls with an idea, Chou will have sent off an e-mail about it before the conversation is over, Iovine said. Chou said he tests the music himself. A $300 million controlling stake in Beats Electronics LLC, the headphones maker backed by rapper Dr. Dre, was part of a strategy to lure music enthusiasts with a marketing plan that included bringing singer Lady Gaga to an Oct. 6 audio party in London to release the HTC Sensation XL, its first handset featuring Beats audio technology and headphones.

Source: Bloomberg BusinessWeek

2011 10

Reinventing Post Offices in a Digital World

The American Postal Service is facing bankruptcy with $9 billion dollar negative cash flow. One way to come up with a new business model is to see what happens in other parts of the world. It turns out that European postal services have already spent to past 20 years trying to reinvent themselves, as detailed in this article in the NY Times.

2011 09

Why the CEO of HP was fired after only 10 months on the job

The proximate cause was the HP Stock price.
image
For more distant causes click on “more”.

2011 08

The Reason why HP is divesting its PC Business

From the WSJ: H-P is the world’s largest marketer of PCs. Yet Mr. Apotheker said that it isn’t possible for the Palo Alto, Calif., company to continue to invest in that business and make required structural changes to the rest of H-P. Developing a steady stream of devices that consumers want requires a lot of money and new product-development cycles that are “much faster than a conglomerate can move in most circumstances,” he said. H-P’s PC unit produced $40.1 billion in revenue and $2 billion in operating profit in its most recent fiscal year, profit that was used to fund other operations. As a standalone company, the PC unit would be able to invest in its own future, he argued.

Full Story