Monthly Archives: November 2006

Does the (Green) Future Belong to Kermit?

It’s been a couple of months since my last green post, and the call of Kermit has been taken up by some rather large corporations in the interim. As highlighted in Supply Excellence and Fortune, Adobe Systems has become the first company to receive a platinum award from the non-profit U.S. Green Building Council, Wal-Mart has launched a green packaging rating system, as covered in Buyer Analytics and Purchasing, Yahoo has a new Yahoo Autos Green Center and has converted its employee commuter shuttles that go between San Francisco and its Sunnyvale, Calif., headquarters to run on biodiesel, and Richard Branson will be investing profits from Virgin airlines into alternative energy.

Some states are turning up the heat on global warming, and attempting to show the world that maybe, someday, the US can be green too. The most notable is California, where Governor Arnold Schwarzenegger recently signed into law a sweeping global warming initiative that imposes the nation’s first cap on greenhouse gas emissions, as reported by Wired and CNet. (As a side note, California also sponsors the Clean Tech Open.) Moreover, California, like New Jersey, now allows net metering, and with federal government incentives, going solar can pay for itself in a few years and ultimately result in free electricity for you.

Cities are getting in on the action too. Boston CleanAir Cabs is replacing old taxis with new hybrid-electric or alternative energy vehicles, as covered in Now that the eco-friendly Fiat can use gasoline, methane or the E85 mixture of gas and bioethanol, they have another option. (John Gartner of Autopia makes a great case for plug-in hybrids.) In addition, Boulder, Colorado has approved a carbon tax.

And some VCs are starting to take notice big time. The Investment Network on Climate Risk (INCR) has achieved its goal of $1 billion in clean technology over the past 18 months. Clinton announced a $1B Fund for Renewable Energy Investments.

Technology is improving every day. With the advent of electrically conductive plastics, dye-sensitized solar cells, and carbon nanotubes (which are also being used in light bulbs), solar cells are now cheap and efficient, as per this article on

Moreover, a Brazilian company called ABC Esso will soon sell an adapter in the U.S. that lets any gasoline vehicle burn up to 100 percent ethanol! So far, the company has developed adapters for Ford, GM, Honda, Mazda, Volvo and Toyota vehicles. This means that there is no reason why all of tomorrow’s vehicles cannot be hybrids. And when you consider we could be producing enough alternative fuels to replace all of our gasoline and oil needs in as little as twenty years with the right investments, let’s hope the product takes off!

MIT has designed a system to place wind turbines far offshore and out of sight. And we now have a solar powered car, but they still have a ways to go before they can be used as more than glorified golf carts, but it’s a good start! (At least they are a step ahead of the extreme green cars of the future that are still in the design stages, although the idea of a fully recyclable car is an intriguing one. Check out the gallery.)

But it doesn’t take an MIT education to go green or realize the importance of doing so. Even farmers in Iowa know how important going green is. This is good … since cow farms are a great source of natural gas thanks to alternative energy start-up Microgy.

Scott Adams, A Supply Management Guru?

Regular readers of this blog or Spend Matters should recall Jason Busch’s post on The Spend Management Talent Game where he indicated that when seeking out talent, an organization should value generalist skill sets, raw intellect and EQ (emotional intelligence) over industry and domain knowledge. Spend Management professionals need to understand the world around them and possess general problem solving skills that go beyond functional — or even technology — knowledge. Technology skills can be taught. It’s far harder to find someone with the analytical skills to navigate complex total cost decisions and the emotional maturity and interpersonal skills to sell such analyses both up and down the company.

In simple terms, if you want to be a better supply chain professional, you should focus on improving your general problem solving skills and EQ first, since domain knowledge is much easier to learn and can be readily absorbed from an appropriate expert once you have the raw intellectual capacity to absorb it. Furthermore, since EQ is required for general problem solving skills, and since general problem solving skills can be improved through repeated application using tried and true problem solving methodologies as guides (some of which I have discussed here in this blog or in my summer series over at eSourcing Forum), it should be clear that your number one goal is to improve your EQ.

So how do you improve your EQ, which is not the same as improving your emotional range? (i.e. Sitting around watching chick-flick movies all day won’t help us guys.) I’ll admit that I struggled with this for a bit until I realized the answer was obvious – learn from the best, and if you can find one, a guru. But where do you find an EQ guru? One who will happily share his or her wisdom, and preferably, share such wisdom with you regularly simply for the satisfaction of knowing that he or she may make you a better person? (After all, a true guru is one who readily shares his or her knowledge, not one that sells you snake oil until you’re broke and then vanishes.) After all, the world of business is littered with “finance” gurus or “real estate gurus” or “M&A gurus” or “management gurus”, not EQ gurus. So I was back to square one – no idea on where you should go to improve your raw EQ (since my strengths are in problem solving and application of such techniques to the supply chain domain and imparting sophisticated domain knowledge in the areas of math, computer science, and logic) since I wasn’t sure where to go to improve mine.

Then it dawned on me – the answer was under my nose all along! (Literally, since today I’m smelling sweet Bay Area California air, and since I live in the real NorthEast, at this time of year my nostrils would normally be too cold to smell anything!) I was already absorbing great advice from an EQ guru everyday, and didn’t even know it! And for you non-observant, that Guru is Scott Adams, author of the Dilbert Blog (and the Dilbert comic strip, and four of the best business books ever published, etc.).

Moreover, some of his advice is so good, that I would say he could even be proclaimed a Supply Management Guru! Furthermore, I am going to present my case solely on the insights that he has shared with us in the past month alone!

October 24, 2006 Good News Day
Scott proves that optimism is a powerful tool and that just because no one else has ever recovered from a seemingly hopeless situation or solved a problem before does not mean that you can’t be the first! Furthermore, I would like to add a corollary to this that just because someone says you cannot do something, it does not mean they are right. Usually it means that they cannot (or believe they cannot, but that’s the same thing.) There is a chance that they may be right, but it is often a (diminishingly) small one. Furthermore, a failure is always relative to certain conditions or assumptions. So next time someone says something like “We tried that ten years ago, and it didn’t work.“, don’t accept it at face value. Find out precisely what they tried, what precisely they did, and precisely what the assumptions and market conditions were. If the conditions have changed, if the project was managed poorly, or if the arrangement was arms-length, maybe a different arrangement or management structure will work today.

October 25, 2006 My Day as a Neanderthal
Scott tells us that he feels cut off from the world when his primary means of communication and interaction goes down, and points out that we are at our best not only when we use all the resources that are at our disposal, but work with others whose knowledge and skills can complement our own.

October 28, 2006 I Got Your Free Will Right Here!
Scott asks “If free will exists, why do the tallest candidates with the best hair usually win elections?” and points out that the correlation is incredibly strong despite that the most poorly informed voter understands that neither hair nor height have any correlation with competence. He also points out that you can see the same bias in favor of tall, good looking people in business too and that there are plenty of studies showing that tall and/or attractive people earn substantially more than short, ugly people and they get promoted faster too. Furthermore, there are tons of similar examples where companies can manipulate customer behavior by altering colors and music and odors at stores and that none of those things change the quality of the products, and yet they change people’s buying decisions.

In other words, we’re naturally very illogical people and we have to work hard to make sure that logic is the basis for our decisions, not just gut instinct.

November 2, 2006 Stem Cells
Scott says I don’t debate with advocates. An advocate says that everything is right about one position and everything is wrong about the other side. You might as well debate with a doorknob. I only debate people who say, in effect, “There’s an argument to be made on both sides, but here’s why one side seems more persuasive.” That person could theoretically be swayed by new information or a better argument. Simply put, you can’t be logical with the illogical. Don’t butt heads – it’ll have the same effect as pointing out the inconsistencies in the bible to a Jehovah’s Witness. If you can, work around these individuals. If you can’t, you’ll either find a creative way to make your position more attractive to the irrational nitwit or consider a job change. (Otherwise, you’ll just stress yourself out for no good reason.)

November 7, 2006 My Search for Clarity
In a clear demonstration of his wisdom, Scott says as regular readers know, I am too ignorant to have opinions on most big issues. It does not matter who you are, you do not know everything. This also means that you cannot be an expert in everything. The only way to grow as a person and improve your skills is to admit what you don’t know and then seek out that knowledge.

November 14, 2006 Are Smart People Dumb?
Scott asks Why would I limit the quality of my advice to people who don’t know any more than I do? In other words, just because someone is famous, your superior, or your mentor, it does not mean that they will always have the right answer. Just like the rest of us, they have their areas of weaknesses as well as their areas of expertise. When you have a tough problem, go to the experts and see what they have to say. And the s is bold for a reason. You should seek multiple opinions, and explanations therefor. Experts are people too, they don’t always agree, and they will occasionally be wrong. (Just significantly less than the average person, as that’s the definition of an expert.) Furthermore, Scott also points out that genius alone does not a smart person make, especially when it comes to a (specific) real world problem.

November 16, 2006 Who Can’t be Hypnotized?
Scott deftly points that we are all in the business of influencing people and outlines the technique of hypnotic induction that you can use to help calm the tense individuals who will be reading and judging your work and ease them into the relaxed state of mind that they will need to be in to make a fair assessment.

November 17, 2006 Aging Brains
Scott tells us that we should release all knowledge of complicated explanations for the world whenever simpler ones will do the trick. The KISS rule is universal. Don’t forget it!

November 18, 2006 Philosophical Brevity
If you want to get your point across, be smart and brief.

November 24, 2006 Complicated Decisions
Scott points out that he often makes a decision on the easy to predict and important factor(s) and ignores the impossible to predict factors. This is because while you can’t know the RIGHT decision, you can know the RATIONAL decision. Although you can’t always ignore the unknown, the reality is that the unknown should not be the basis for your decision. After all, there will always be unknowns. Let’s choose freight. The airplane could crash. The boat could sink. The truck could be stolen at gunpoint. It doesn’t matter, there is always risk. If you’re worried, take out insurance. However, the airplane will be fastest and cost the most. The cargo ship will be slowest and cost the least. If speed is of the utmost importance, choose air. If cost is of the utmost importance, choose sea. Strike possibilities, terrorist attacks, etc. etc. etc. are always there, regardless of method, so don’t base your decisions on these unknown factors. Simply have a backup plan in place to mitigate risk, insurance to mitigate loss, focus on what’s important, and get the job done. Otherwise, you’ll be a hypochondriac before you know it.

And if that does not convince you that Scott Adams is an EQ and Supply Management Guru, I don’t know what will. Furthermore, he also doles out great advice on a wide range of topics on a regular basis. In the last month alone, he has told us how to Avoid Obscenity in our Documents*, select Comic Assess we can safely post on our cubicle walls, and be featured on 60 Minutes. What more could you ask for?

* If you don’t get it, you should use bullets, not asterisks.

It's too bad Scott Adams had to take these classic posts down on request of Portfolio Hardcover when they published Stick to Drawing Comics, Monkey Brain that was a collection of his blog posts through part of 2007.

Quote of the Week

There is a very bright line between what is acceptable quality and what is crap.
     Roger Martin
          The Dean of Design, Canadian Business Nov 6-19 2006, p 43 – 47

Do you know the difference?

Disaster Recovery Planning

In Managing Business Risk, we discussed Business Continuity Planning and how it is one of the best ways to manage risk, including supply chain risk. A major component of business continuity planning is disaster recovery planning, and after my recent posts on how Your Supply Chain is NOT Secure, diaster recovery planning should be at the forefront of your thoughts.

If you find planning for a disaster daunting, it never hurts to bring in some outside help, and if you think the costs of setting up a backup operation are prohibitive, then you might want to consider outsourcing that as well.

A recent article in the Outsourcing Journal, Why Every Business Needs a Disaster-Recovery Plan, demonstrates how it can be an effective option. It discusses how Citrix was able to literally move their factory from one side of the country to the other with the flick of a switch thanks to HP‘s disaster recovery service which had the backbone and infrastructure needed to take over Citrix’s world-wide ordering and fulfillment process across all 670 SKUs.

Selecting a disaster recovery outsource provider is not an easy task, and Citrix spent 18 months interviewing and evaluating 20 firms globally before making a choice based on a 32-question report card. However, your process need not take quite as long if you heed Citrix’s advice and focus only on outsourcing provider willing to work with you and address your concerns. As the article notes, transition can be turmoil in most outsourcing arrangements, but if the company is willing to commit the necessary time and resources and work with you to make the transition seamless, it can be.

In addition, the provider should be comfortable with quarterly management reviews and clear metrics. Everybody should be looking at delivery performance, quality, customer satisfaction, and cost improvements every 91 days and identifying opportunities for improvements. Then, both parties should jointly choose two or three initiatives to work on during the upcoming quarter and follow through.

As per the article, done well, outsourcing has the following benefits:

  • Increases productivity
  • Increases mobility
  • Frees up resources to focus on core competencies and innovation
  • Provides business continuity and security
  • Reduces complexity and improves performance
  • Consolidates to create a single view into technology environment
  • Provides governance and compliance
  • Improves process
  • Reduces points of accountability
  • Provides accountability to service level agreements

The Art of Service Management

The Art of Service Management

There were a lot of presentations at INFORMS on services and services management, which only makes sense since services are the most dominant contributor to national GDP (making a significantly larger contribution then manufacturing), but the most interesting was P.T. Harker’s plenary session on Science and the Art of Service Management. In this talk, P.T. Harker discussed the evolution of service management over the last three decades and the technology you are going to need to keep up.

In the eighties, service was all about delighting the customer. The customer was always right … and you went out of your way to delight the customer! However, this strategy almost bankrupted a number of corporations that took it too far and then came the nineties with the corporate backlash strategy which said you should fire the customer – after all, all they do is complain and kill profits. Of course, this didn’t work either – we’re not whiners, schemers, or stupid – we just want a fair product or service at a fair price … and we started fighting back, taking our business to companies that didn’t treat us as whiners, schemers, or idiots. So now that we’re in the noughts, what’s the new strategy? Make the customer efficient. In other words, if you’re not able to delight the customer, at least be decent enough to not waste her time.

How do you do it? Forget CRM (Customer Relationship Management) – the new wave is CEM (Customer Efficiency Management). CRM is good – but if you have systems and processes in place where the customer can find the information and products they need by themselves, then CRM kind of becomes a moot point, doesn’t it?

The goal of CEM is to treat the customer as a true co-producer, manage their contributions by integrating HR and Marketing tools and processes into your traditional CRM processes and technologies, and harness their knowledge. After all, you’re much more likely to sell a product or service if it is in line with what the customer wants AND it’s not a hassle for them to buy it.

However, it’s important to note that the key to success lies in the balance. If you take it too far, two things could happen. You could end up on that slippery slope back to the delight the customer mentality, which is generally not profitable for the vast majority of service providers (there are exceptions, but they serve a marginal consumer, not the average consumer), or you could make the customer too efficient in such a way that you make your service invisible and this would weaken your brand as a side effect. (As far as I’m concerned, there is no such thing as too efficient, but you want to make sure the customer understands who brought them the heightened level of efficiency.)