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Creative or Crackpot. How do you tell the difference?

the doctor has been called both. Thought leaders early in their career, including modern legends in science and business, have been called both. And anyone who pushes the boundaries in unusual ways will be called both. But how do you tell the difference?

It’s a tough problem. There’s such a thin line between genius and insanity, and even if the individual was a genius yesterday, who’s to say the genius hasn’t crossed the line and become a bonafide crackpot today.

But it’s one that should be tackled. the doctor could cross the line himself someday and the best way to prevent that from happening for as long as possible is to be aware of the warning signs and take proactive action. (Just like the best way to avoid dementia is through a combination of good eatin’, regular exercise, stress management, and regular mental activity.)

So the doctor did some research and found a pretty interesting article over on boingboing that provided some advice on the identification of the modern crackpot.

According to the article, written by Maggie Koerth-Baker, the science editor at boingboing and a Nieman-Berkman Fellow at Harvard University from August 2014 to May 2015 (which only accepts candidates with the potential for journalistic excellence), there are five indicators that, if present, might indicate the individual has crossed the line into the realm of the crackpot (or, even worse, has always lived in crackpotopia).

1. Is the story being uttered by the individual too feel-good?
(Like the Big News from Grand Rock.) Good educators care more about the evidence, technology, or practice than the story.

2. Is the proof being presented by the individual too self-evident?
If it really is obvious common sense, the individual is not as smart as he is making herself out to be. And if it’s not, there’s more smooth in the talk than there is substance, and that should set off a lot of warning bells. Proof generally requires explanation. Sometimes lots of it.

3. If the individual is trying to convince you that acceptance of the new idea will make you smarter than the official experts, be suspicious.
Very suspicious. Experts aren’t always right, but they usually are. Plus, at best, you should be as smart as the experts. Not more so.

4. If the studies the individual is using are (really) old, if there’s only a few studies, or if the individual is trying to use some weird meta-study across mostly unrelated studies (and ignore Pinky and the Brain’s lesson in statistics), dig deep. Really, really deep. What looks like truth when you look at five samples can quickly become completely untrue when you look at five hundred.

5. If you are told that you cannot trust any other source of information (because of some big, corporate, conspiracy or because such-and-such expert is a sell-out), then the individual is either the pre-eminent expert or a complete crackpot. (And we will leave it to you to guess which one is considerably more statistically likely.) An individual must know his or her limitations. There’s a reason SI tends to focus on some things (like optimization and analysis) and ignore others (like market speculation and merger benefits). That’s because the doctor is an expert in the first and not an expert in the latter.

This is not a complete or exhaustive test, especially since the greatest of geniuses who truly see the future years before anyone else will often only have a few studies to draw on, come up with proofs so logical that they seem self evident, require you to mistrust most accepted sources of information, and present a story that is truly exceptional. However, ground-breaking advances like this tend to only happen every few decades at most. So the test present by Ms. Koerth-Baker is a good one.

Risk Management in Migration to Low-Cost Countries, Part II

Today’s guest post is from Diego De La Garza, Senior Project Manager at Source Once Management Services, LLC, and Source One’s expert on sourcing in Latin America.

In Part I, we noted that efficient migration to low-cost countries has become a necessary, competitive trait because ignoring low-cost country sourcing within the corporate agenda is now a risk in itself. However, low-cost country sourcing has become so intricate that it carries significant risks if improperly managed. We already discussed that risk mitigation must begin with proactive and diligent research on risk potential before setting a comprehensive strategy for the migration process and discussed the quality concern and noted that where there is expertise in a well established industry, quality will generally not be an issue. But this is just one risk area.

As far as other risk areas, geography is a critical component that is ignored more frequently than it is acknowledged when selecting a low-cost location. Geography plays a dual role when managing risk. First, geographical risk can be assessed based on the proneness of one location to experience a natural disaster and its ability to recover. Secondly, geography should be assessed on the location’s accessibility to reach end markets quickly. Logistics and infrastructure play a key role here, but a strategic location is a competitive advantage that will nurture mobility.

Low-cost countries will also have different laws, rules, and regulations that permeate their business culture. Some countries will have strong intellectual property (IP) protection schemes but they may not enforce or penalize infringement. Others won’t have any at all, which in many cases has motivated corporations to exit low-cost locations. IP transgression may have huge repercussions to a company, especially if prosecution in a foreign country is favorable. Corporations must ensure that robust confidentiality agreements, contractual terms and conditions, and enforceable jurisdictions are in place with all entities that are engaged from the beginning.

Financial regulations, taxing structures and commercial activity compile an extensive bundle that may pose both risks and advantages. The best way to capitalize on tax breaks, financial incentives and even logistics benefits is by understanding the trading regulations and agreements low-cost countries have in place and how can they be leveraged advantageously. From subsidies, to temporary-tax-free importations, most low-cost countries today have mechanisms to incentivize investment. It will also be critical to understand which regulations can negatively impact the operation or may affect the Total Cost of doing business. Some good examples of this are anti-dumping laws and penalties that are applied to specific commodities and products, which will vary in time and form constantly.

Political and social instability are stigmas that often become associated with low-cost countries. In many cases this image is misunderstood or exaggerated by the media. The reality is that focused social issues may transcend the commercial barrier when unwarranted fear is passed onto potential investors. Social unrest is unpredictable and can easily scare away opportunities, but in many cases, specific industry sectors may be protected from it and may even be thriving in spite of it. The best way to manage something like this is to understand how the macroeconomic landscape behaves as a whole from the very beginning.

Some companies have shown interest in approaching migration on a “testing the waters” type of approach to mitigate risk, which may entail transitioning only a small portion of their volume to a low-cost country, or running pilots to ensure a safe migration. While this conservative strategy is common and could be effective, is not necessarily the most beneficial. “Testing the waters” may actually be very expensive in the short-term and may not provide the full benefits of a well-run migration strategy; in some cases it may even be considered somewhat “risky” since companies may incur in dead costs, expose competitive strategies and not leverage the full potential of the local network.

Strategic sourcing best practices are a key element on risk mitigation, as many of them include the evaluation of multiple dimensions of the offshoring and migration process. They also help understand suppliers and establish collaborative links with them and other local entities that can help define a clear picture of the local market, the networks and uncover the opportunities that may have not even been considered in the first place.

With all this in mind, low(est) cost should not be considered as the only metric on which to base a migration decision. Finding an ideal low-cost country with low risk will depend on its sustainability potential. In some cases the lowest cost may also come with higher risk, and so a well-balanced strategy that demonstrates long-term value is the best formula to keep both costs and risks down. A balanced combination can only be drawn through leveraging accurate data and expert advice on each of the risks areas of cost migration.

Thanks, Diego.

Procurement Trend #23. e-Procurement System Adoption

Twenty anti-trends still remain. As much as we’d like this series to end so that LOLCat can come out of hiding, this insanity has to stop. We have to shine the light on all these half-truths and lies and put an end to them once and for all. We will continue until each one is laid bare in the hopes that the backwater futurists crawl back into the muck from once they sprang and leave us alone to push forward.

So why do so many historians keep pegging e-Procurement System Adoption as a future trend? Besides brain cell inactivity, there are a few reasons, but among the top three are:

  • e-Procurement is still “new” in business software terms
    it’s only been around for approximately 15 years, and the sad reality is that, to many of these self-proclaimed futurists who just crawled out of the MRP cave, it’s new to them (so it must be new to you, right?)
  • most systems are limited to catalogs or punch-outs
    and users can only buy from a fixed, limited set of products that exist in the organizations catalogs or on sites that support the proper punch out technology
  • most systems are limited to a select group of users in the organization
    when they should be in the hands of everyone who needs to make a requisition or purchase on behalf of the organization

e-Procurement is Still “New”

Fifteen (15) years might be new in business terms, but given the rate of change we are all accustomed with as a result of the internet age, it’s not new at all. In fact, it’s ancient! With this metric, you’re still calling on analog cell phones while the rest of the world is on digital smart phones that can call, text, and video conference. Get the picture? (Oh, wait, you don’t have picture capability. Sorry!)

Catalogs or Punch-Outs are the Norm

Catalogs are good, punch-outs are better, but as SI explained in its B2B 3.0 Series way back in 2008, virtual, integrated marketplaces, which were available then, are better still! Read the classic series for more info:

Usage is Limited

This is usually because poor processes and policies limited rollout to “key” individuals, but often because people didn’t want to use ugly, clumsy systems that didn’t even accomplish their basic function. The answer is a modern e-Procurement system that is easy to roll-out organization wide, easier to use, and does what it is supposed to do. There might have been only two options 15 years ago. But now you probably have a dozen that would work. So get one!