My Daughter

My Daughter
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Thursday, October 08, 2009

IBID

Sorry to serial-rant, but I should say that I think there is actually some hope in all of this....
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I should also explain that I used to work in one of those places where the incumbent technology was about 40 years old, the sales cycle for innovative products was about 10 years, because it is a basic-materials business that is pretty well commoditized, selling into a mature industry (the automotive supply chain, of course)....It's similar enough to the refinery business that I can figure out a lot of the economics....

In that kind of environment, it is pretty easy to build a nice career, and get a nice salary, by being an innovation killer. Here is how it works: Someone in engineering, or maybe customer service, has some idea about how to improve the product, or improve some aspect of service, delivery or logistics, and in one of the periodic communication meetings that happens would thoughtfully put out some kind of proposal..... Sometimes this happened informally, but from time to time, this would happen deliberately, and a lot of the planning and business modeling would be laid out in some detail.

Meetings would be held, the innovators were allowed to state their case, and it was at that point that the "counter-innovators" would come up with a lot of excuses for not doing it, question the base assumptions, and slow down, if not completely stop, the entire process. The reason that this was a successful career strategy is that it is easy to kill an idea, or starve it to death, because the default position, so to speak, let things go on the way they have, is risk-free. The basic assumption is, "that's the way it is... it's what made us successful all of these years...."

An innovation that fails, of course, makes the innovation killers look brilliant and the innovators look like idiots. It takes 100 times more energy and talent to innovate than it does to kill an innovation, so most of the time, the innovation killers have the odds in their favor.

Any changes to this massive-scale equipment was expensive, of course, and sometimes the business would have to make a pretty sizeable investment to make it work, so in a way, in the short run, they were right. In the long run, of course, it's a catastrohpe.

An offshoot of this, of course, is the Al Dunlaps and/or Nardellis of the world, who built their career on cutting..... reducing overhead and/or streamlining operations, which is a useful skill in and of itself because it improves economic efficiency, but is terrible from the standpoint of innovation, because by its very nature, innovation is messy and inefficient.....That was the subject of an earlier rant, that we can probably unearth....

The point of all of this is, that there gets to be a lot of tension between the innovators, who have ideas on how to improve the business and make it grow, and implement change, and the counter-innovators......and at least in the mature business that I was in.....It was particularly dangerous for an innovator to be put into any kind of position of authority, because the first thing he or she did was start to shake up the status quo.... which got people nervous....and violated Peter's first and foremost rule of organizational behavior: The Hierarchy Must Be Preserved....Typically, the innovation killers were the ones that were populating the higher levels....being as it was one of those mature industries....

And, of course it is the very reason, particularly in automotive and other manufacturing, that these companies refused to change, even in the face of catastrophe, and had to be bailed out by the government.


The bright side is, from time to time, the analysts and management figured out that the headcount was too high, so there was an overhead purge, and along with the skill-free yes people, occasionally the innovation killers that were running the place would use it as an excuse to get rid of some of the 1% of the people that ticked somebody off at some point........From the point of view of the organization, these people were a bit dangerous..... but from the point of view of the rest of the world, they are the ones who are bright, ambitious, determined, innovative, risk-taking, and not afraid to keep the ball in play even if they failed from time to time...Naturally they did not fit into the corporate structure.....especially in a mature industry where a "success" might take you five years... A lot of them even had cluttered desks... can you imagine?

With these seeds of creativity finally liberated from their protective pod, these people are free to develop new products, establish new business and industries, and generally make things better for the economy and society as a whole. Of course, there are plenty of failures that are liberated as part of this too.... and it's kind of hard to distinguish between the two in the early stages.... but that is not all bad...

Failure makes you smarter, provided you learn from it, and use it as a chance to change....

The point is, that situations like this have the potential free up a lot of human energy that, in maybe 1% of the cases, can sow the seeds of a new industry. It's definitely going to be rough for the 99%.....

BTW a side point: I think the current argument about universal health care completely ignores the fact that a lot of bright people right now are dumbing themselves down, and putting up with a lot of BS in a corporate type environment, so that they can work in a place that has health insurance, rather than going out and innovating......

1 comment:

annilkhan said...

see details
http://fc-bangladesh.blogspot.com/2009/10/goodbye-to-taching.html

Goodbye to Taching
CHINA’S THIRST FOR OIL

Geopolitical equations are changing with China's ever increasing thirst for oil, part of its quest for energy security. And, with the changes in class outlook to Mao's "On the Ten Major Relationships" Taching is no more a model to the ruling elites in Beijing with their increasing hunger for affluence.
A few news reports show the country's search for oil from corner to corner of this round earth: Brazil's president Lula visited China for strategic partnership, the Chinese National Petroleum Company (CNPC) opened Iraq's Al-Ahdab oil field in last March, China and Kuwait signed five agreements on areas including energy and finance in last May, an oil pipeline linking Russia's far east to China's northeast is set to start operation by the end of 2010, China and Russia signed seven energy cooperation agreements in February that included the pipeline, a long-term crude oil trading deal and a financing plan between China Development Bank and the Russia Oil Pipeline Transport Company, CNPC signed agreements with Costa Rica to upgrade Costa Rica's oil refinery and to conduct a feasibility study on a new refinery in November, 2008, CNPC to lend US $ 5 billion to the Kazakh state oil