Archive for category Disruption

Credibility Leads to Success

It really doesn’t matter what it is you do in life, to find long-term success in your chosen field or business you have to have the skill set to adapt and find solutions to the problems you and your business face. To be able to continually build on successes and achieve goals that you’ve set for yourself, or those that your boss or board-of-directors have set for you and/or the business, is key to finding long-term success. That then earns you credibility.

 

canstockphoto19545601

How do you achieve credibility? There are a lot of ways to do so, but as a mentor once told me years ago, that way was to “fulfill the promise”. “Fulfill the promise” meant delivering on the budgeted fiscal year revenue and EBITDA that we developed for the company. The person who told me that was the President and Chief Executive Officer (CEO) of a multi-national company and I reported to him as President and CEO of the U.S. division. He taught me a great business and life lesson.

By surrounding myself with a talented team of like-minded individuals, together we fulfilled the promise year after year. That gave us credibility. Credibility provided greater influence in moving the business forward. Credibility also provided us flexibility to pursue new business opportunities, money for acquisitions to further the growth of the company and to build innovative software solutions that provided us with greater success. The key is that you have to work continually to fulfill the promise. It’s not an easy task but it’s the only way secure the future for yourself and the team.

Ultimately when you establish credibility, gain influence and flexibility in what it is you do you will find that new opportunities abound. It really doesn’t matter what it is you do in your life, if you have credibility it speaks to the ability to inspire others.

“In government institutions and in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to businesses.”

Janet L. Yellen, Chair of the Board of Governors of the Federal Reserve System

When you have credibility you gain influence. Your ideas and views have greater meaning and weight, which will help shape the direction of the company that you work.

“Leadership is not about a title or a designation. It’s about impact, influence and inspiration. Impact involves getting results, influence is about spreading the passion you have for your work, and you have to inspire team-mates and customers.”

Robin S. Sharma, Author

With credibility you also gain flexibility.

“What is clear is that business leaders must commit to champion change – to be transparent about their goals for change, to align their incentives systems to drive the change, and to make sure their work environments are flexible in a way that allows men and women who choose to work to be able to achieve all of their potential.”

Beth A. Brooke, Global Vice Chair – Public Policy, Ernst & Young

So working to gain and then maintaining credibility should serve you well in whatever endeavor you choose. Credibility is achieved when the actions you’ve taken allow others to believe in you as a leader.

Just sayin’.

 

EBITDA – earnings before interest, taxes, depreciation and amortization

, , , , , , , , , , , ,

Leave a comment

Employees vs. Robots

I was reading an article that appeared in Tuesday’s USAToday with the headline – “Amazon puts 15,000 robots to work on Cyber Monday”. 15,000?!?! The Kiva Systems robots do tasks that historically have been done by some number of Amazons 88,400 employees. Robots picking products that are purchased online by consumers that then need to be shipped to them from Amazon fulfillment centers across the globe cost some number of people jobs. Using Kiva robots obviously provides great value to Amazon shareholders since they don’t require a human resource department to oversee payroll, other benefits such as medical and dental plans, vacation days, sick days, etc.. But this can’t be good for union and hourly workers.

Automation Robots vs People

 

Robots are obviously taking over or facilitating any number of manual jobs that historically have been done by employees. Amazon’s use of robots brings the product(s) ordered online and stored in shelf bins to a packer for shipping. Once the purchased item is delivered to the packer the robot returns the shelf bin back to where it belongs awaiting the next task. These robots have certainly saved Amazon the cost of workers who provided this service. The article says that Amazon spent $ 775 million for the Kiva robots and that, “The robots are part of a complex software and hardware system that simplifies picking and packing at warehouses that contain literally millions of items.” The article doesn’t mention that each robot, and the systems that supports them, cost an average of $ 51,667. Payscale.com estimates that the average Amazon employee salary cost is in a range of $ 50,098 – $ 122,195. After Amazon’s initial investment in the Kiva robots there would be ongoing costs for maintenance, repairs, replacements and of course those whose job it is to manage the 15,000 robots, but Amazon obviously did all the internal analysis and studies to see that the return on investment was well worth the $ 775 million.

The advent of using robots isn’t new, but with robots taking over responsibilities of human pickers at Amazon and the use of robots across countless industries and companies the potential loss of unskilled or low skill jobs could be devastating. Taking place at the same time is the strong push by some city and state governments to increase the minimum wage through legislation. Somehow there seems to be a potential disconnect.

Redwood.com compiled a report titled “The Top 10 Reasons Businesses Demand Enterprise-Level Automation”. Reason #2 in this report is:

“Happy and Productive Employees

Automated tasks keep people—who can get bored or irritated by doing repetitive tasks—free from drudgery. It also liberates them to do more strategic and valuable activities for the company. Automation lies at the core of all of our modern conveniences. Machines are made to do repetitive, boring tasks—without complaining.”

You can see where the use of robots and/or automation that is rapidly taking over or helping employees in their jobs providing cost reductions and greater shareholder value for companies who utilize them, but I’m guessing that most employees would prefer being “bored or irritated” and not “free from drudgery” versus not having a job. Certainly there are countless jobs that won’t be taken over by robots, but is your job completely safe from being replaced by a robot so that you can be freed to do something else? I’m guessing the Amazon employees that were picking products for packing at one time thought so.

If you’re a business owner or in management with responsibility for delivering shareholder value you have to continually be looking for ways to cut costs and increase value just as Amazon has done. There are countless jobs that aren’t going to be replaced by robots, but are there robots that can help you improve the productivity of your employees making their jobs easier and provide greater shareholder value? As companies compete against each other for business at a local, regional, national or international basis; looking for the slightest advantage against industry competitors the answer has to be yes. What are you doing to take any advantage available and ensure that you continue to grow and prosper in your industry?

Just sayin’.

 

 

 

 

Sources:

www.usatoday.com

http://www.usatoday.com/story/tech/2014/12/01/robots-amazon-kiva-fulfillment-centers-cyber-monday/19725229/

www.kivasystems.com

http://www.kivasystems.com/about-us-the-kiva-approach/

www.amazon.com

http://www.amazon.com/Locations-Careers/b?ie=UTF8&node=239366011

http://www.amazon.com/Inside-Careers-Homepage/b?node=239367011

www.payscale.com

http://www.payscale.com/research/US/Employer=Amazon.com_Inc/Salary#by_Yearly_Sales

www.wikipedia.com

http://en.wikipedia.org/wiki/Pick_and_pack

www.Redwood.com

“The Top 10 Reasons Businesses Demand Enterprise-Level Automation”

 

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

The Future in the Automotive Aftermarket Industry

For me, listening to keynote speaker Tony Aquila, CEO of Solera Holdings, Inc. at Auto Glass Week in Baltimore was most interesting. He led Solera’s purchase of LYNX Services, GTS and GLAXIS from owners Pittsburgh Glass Works LLC and PPG Industries, Inc. earlier this year. Tony’s accomplishments are considerable, especially considering that he grew up sweeping floors working in his uncle’s body shop and he has a 9th grade education. You have to be incredibly impressed by the guy.

The “Strategic Focus” web page for the company states, “Solera is the world’s leading provider of software and services to the automobile insurance claims processing industry.” (Link to corporate history) Solera will certainly be changing the world of auto glass repair and replacement (AGRR) with innovative software solutions that will simplify the claims handling process surrounding glass repair and replacement. The organization has the potential to affect the way all consumers and influencers ultimately buy AGRR products and services dramatically. Depending upon the vision and direction Solera heads automotive aftermarket parts and service providers, including the auto glass repair and replacement industry (along with the collision repair industry and parts distribution industry) could be in for some big changes. It’s all about taking out market inefficiencies and reducing costs associated with those inefficiencies.

Just look at the AGRR industry. To ensure that service level expectations of the consumer is ultimately met, any software program would need to have access to the real-time inventory level of any supplier or distributor warehouses in the area, the inventory levels of any AGRR shop or technician in the vicinity vying for repairs or replacements, along with the schedules of all technicians available to properly repair or replace the part.

Imagine when an auto glass replacement is required, if it would be possible for the software program to instantly search for the part determining which supplier(s), distributor(s) or AGRR shop(s) has (have) the part in stock; perhaps ranked by cost for the part while finding the best auto glass replacement technician suited to properly install the part; when and where the consumer wants it installed. With that capability you then have to start asking some questions like:

Once the software program has all of the information required to start processing an auto glass replacement, who or what company is directly buying and paying for the part(s) required?

It could be:

  1. The AGRR shop or technician facilitating the replacement or
  2. Maybe the customer’s insurance company or
  3. If it’s a cash job the consumer could pay.

Which of the three above pays for any part required is important to determine the all-in price to be paid for replacement parts, along with the price paid for required installation supplies and labor.

So which organization determines the pricing level for the various scenarios outlined above?

Who is buying and paying for the part and installation supplies required?

Who is paying for the technician to install the part?

Answers to these and many other questions will give you an idea as to where the industry could be heading. There will be changes coming and margins are probably going to change in the AGRR industry in the near future. And probably not for the better.

What is it you’re doing to be prepared for the future?

Just sayin’.

140707.safeisrisky

Courtesy of TomFishburne.com – Marketoonist.com©

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Vehicle Miles Driven Improving?

You may have seen statistics recently relating to the increase in miles driven in July 2014 versus July 2013. Seemingly great news for any business in the retail automotive repair industry as miles driven is one of the key drivers that affect the industry and any increase is a positive indicator. As shown on the United States Department of Transportation Federal Highway Administration web site[1],

Travel on all roads and streets changed by 1.5% (4.0 billion vehicle miles) for July 2014 as compared with July 2013.”

Region

Total Travel

Percentage Change

North-East

38.3

0.0

South-Atlantic

55.4

2.4

North-Central

61.1

1.3

South-Gulf

53.4

2.2

West

58.6

1.3

o    Estimated Vehicle-Miles of Travel by Region – July 2014 – (in Billions)

o    Change in Traffic as compared to same month last year.

Great news it would seem. The governmental web site further shows that,

Cumulative Travel for 2014 changed by 0.6% (10.1 billion vehicle miles).

That sounds like continued improvement and more great news for the industry, but perhaps not…..

In the Thursday, September 18, 2014 edition of the USAToday™ a small graph was shown in the USA SNAPSHOTS® section on the front page with the header “USA’s driving stalled” (click link). According to Advisor Perspectives, the organization that provided the information shown on the graph, miles driven in the United States:

 

 “Adjusted for population growth, January to June miles driven this year are down 8.5% since 2007 peak”

 

Down 8.5%! That certainly isn’t great news for automotive retailers. You can read the article titled “Vehicle Miles Driven: A Structural Change in Our Driving Behavior“, that was written by Doug Short for Advisor Perspectives that was the source of the information on the declining number in its entirety by following this link (click here). The article takes an in-depth look at how miles driven are being affected by gasoline prices, changes in driving behavior, the effects of an aging population, unemployment trends and changes in the ways we interact with one another due to ever changing improvements in communication technologies.

 

Miles driven, along with weather and the economy are the three key drivers[2] for the automotive retail industry. How have these three key drivers been affecting your business? Based on Mr. Short’s perspective on miles driven, automotive retailers will have to rely on improvements in the economy and favorable weather to offset a real decrease in miles driven to help drive growth. You’re going to need to take greater advantage of your push and pull marketing strategy to attract customers.


If you have a desire to continue to grow your business (and who wouldn’t) into the future; it would seem advisable to work hard on ways to differentiate and separate yourself from your competitors. The decline in the miles driven has certainly had an effect on volumes to date and will unquestionably continue to influence the automotive retail industry going forward. With declining miles driven the opportunities for replacing or repairing damaged auto glass, for collision repairs, for tire replacements, oil changes, etc. will also obviously continue to decline. It’s critical for smaller retailers to find new ways to attract customers just as the large market leaders aggressively pursue those same customers with name brand awareness campaigns. Now is not the time for complacency.

 

Just sayin’.

 

complacent brands

Courtesy of TomFishburne.com


 

 

 

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Hobson’s Choice (a Free Choice or No Choice at All?)

I recently read the argument that attorneys for Safelite Group Inc. (Safelite) made relating to Connecticut’s Public Act-13-67(c) (2) in a glassBYTEs.com article. They argued that,

“it puts appellants Safelite Group Inc. and Safelite Solutions to a Hobson’s choice….”

Hobson’s choice[1] refers to a businessman by the name of Thomas Hobson who ran a livery in Cambridge, England in the 1600’s. Hobson required that every rider asking to hire one of his horses to always take the horse nearest the door. If a patron didn’t want to use that particular horse no other horse could be used. A “take it or leave it” choice. As another source on the origins of the phrase states[2], “A Hobson’s choice is a free choice in which only one option is offered.” I thought using “Hobson’s choice” in this particular instance an interesting one considering the origins of the term. More on that later.

This link to the summary of the act that was first introduced in the Insurance and Real Estate Committee of the Connecticut House and ultimately signed by the Governor of the State of Connecticut required that in the handling of any insurance auto glass claim in the State of Connecticut that:

“The act requires that a glass claims representative for an insurance company or its third-party claims administrator, in the initial contact with an insured about automotive glass repair services or glass products, tell the insured something substantially similar to: “You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know. ” By law, appraisals and estimates for physical damage claims written on behalf of insurers must have a written notice telling the insured that he or she has the right to choose the shop where the damage will be repaired (CGS § 38a-354).”

Fairly straightforward.

A public radio program called “A Way with Words” talked about Hobson’s choice on one of the program segments. One of the hosts of the radio program, Martha Barnette tells us:

“The phrase Hobson’s choice goes all the way back to 17th-century England. For 50 years, Thomas Hobson ran a stable near Cambridge University. There he rented horses to students. Old Man Hobson was extremely protective of those animals. He rented them out according to a strict rotating system. The most recently ridden horses he kept at the rear of the stable. The more rested ones he kept up front. That meant that when students came to get a horse, Hobson gave them the first one in line—that is, the most rested. He’d let them rent that horse, or none at all.”

Perhaps you see where I was thinking that Hobson’s choice was an interesting phrase for the attorneys to use in their argument. First, Public Act-13-67(c) (2) is a duly enacted Connecticut law so their client really doesn’t get a choice in deciding whether they wish to follow it or not. As is their right, they can dispute the law which is obviously why the company is filing the appeals to the act which provides Connecticut consumers a choice in what company repairs or replaces their damaged auto glass. It’s just that at his stable Hobson didn’t want the same horse(s) being used each time by his patrons. Hobson wanted his patrons to use only the horse(s) that he wanted them to use. You can understand why Hobson wanted to rotate his horses so that each got equal use. Safelite wants Connecticut consumers to only use the auto glass repair and replacement (AGRR) company that Safelite wants them to use. In this case it would appear that Safelite is Hobson.

By enacting Public Act-13-67(c) (2), the State of Connecticut took steps it deemed appropriate to protect consumer choice for residents of the state. There are any number of AGRR companies operating in the State of Connecticut for consumers to use when they sustain auto glass damage. So is it “A Matter of Self-Interest or Consumer Choice”? Isn’t it Safelite that is attempting to provide Connecticut consumers with a Hobson’s choice?

Just sayin’.

Take it or leave it

Another example of a Hobson’s choice would be from Henry Ford’s book titled My Life and Work and written in 1922 referencing options available for the Model T Ford.

Any customer can have a car painted any colour that he wants so long as it is black.”

 

[1] Merriam-Webster.com meaning of Hobson’s choice

[2] Wikipedia.org description of Hobson’s choice

Other sources:

http://www.glassbytes.com/documents/07302014SafeliteLettertoCourt

http://en.wikipedia.org/wiki/Hobson’s_choice

http://www.merriam-webster.com/dictionary/hobson’s%20choice

 

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

5 Comments

Just Sayin’ Blog – Rube Goldberg Machines and Business

I was recently sitting in an airport waiting for a flight and for 30 minutes I stood mesmerized watching an amazing sculpture designed by George Rhodes known as a ball machine. This wasn’t the first time I’ve seen one of these ball machine sculptures. The first one of Rhodes designs I saw was in the late 1980’s while walking through a terminal at Boston Logan Airport. I remember almost missing my flight watching and listening to the sculpture. This Rhodes sculpture at another airport attracted young and old alike. The sculpture really doesn’t serve any practical purpose, but is an intriguing piece of kinetic art. It’s hard to pull yourself away from watching all that is going on – a sculpture that often uses a combination of drums, cymbals, gongs and depending on your point of view makes either a virtual cacophony or euphony of sounds.

In a way these sculptures remind me of a Rube Goldberg machine. Wikipedia defines a Rube Goldberg machine as follows:

“A Rube Goldberg machine is a contraption, invention, device or apparatus that is deliberately over-engineered or overdone to perform a very simple task in a very complicated fashion, usually including a chain reaction. The expression is named after American cartoonist and inventor Rube Goldberg (1883–1970).”

An Example:

Rube Goldberg Guinness World Record by Purdue Society of Professional Engineers

________

Rube Goldberg and Business

While watching the steel balls that roll endlessly though the intricate Rhodes sculpture I started thinking about examples of how some businesses work effortlessly and continuously in a similar endless fashion. Businesses that provide the same exacting levels of customer service and delivery of a product (or products) over and over again that are a key to success. Some businesses have developed very simple processes to find success while other companies tend to overcomplicate processes in an attempt to achieve success.

While at the sculpture I was holding a Starbucks coffee and that company certainly comes to mind as a business that invariably delivers both simple and very complicated orders efficiently and effectively. This Seattle based company that got its start almost 40 years ago has today become the largest coffeehouse with over 23,000 locations in 64+ countries. I just order a Venti black coffee when standing in line at Starbucks. I can never tell if the barista is happy or somehow saddened by my straightforward order. A Huffington Post blog titled “The Most Obnoxious Starbucks Drink Orders“ details some of the complicated orders at Starbucks such as a ‘Venti Iced Skinny Hazelnut Macchiato, Sugar-Free Syrup, Extra Shot, Light Ice, No Whip’. Now that order would be a challenge to any barista fulfilling Starbucks “delicious, handcrafted beverages” mantra. It makes me smile when I hear someone standing in line ordering a similar concoction. It really doesn’t matter where in the United States or the world you place your order; Starbucks seems to always deliver the same level of consistent service regardless of the local. The company has obviously spent a great deal of time and effort in perfecting the delivery of consistent levels of service, but it all seems pretty simple to the casual observer ordering coffee. Everyone knows that you’re going to have to wait a bit when ordering one of the “delicious, handcrafted beverages” mentioned earlier versus my Venti black coffee order, but those who order the complicated drinks don’t mind. They know they are going to be rewarded with a delicious drink made to order by a barista that has perfected his or her craft. In plain sight the platform seems pretty simple. Do you think that behind the curtain there resides a Rube Goldberg machine? Doubtful.

Can you think of other businesses which deliver products consistently in a simple straightforward manner? Maybe FedEx, Amazon.com or even MacDonald’s could come to mind. Fortune Magazine lists 50 of the “World’s Most Admired Companies” and the top 5 are:

  1. Apple
  2. Amazon.com
  3. Google
  4. Berkshire Hathaway
  5. Starbucks

I’m sure you’d agree that each of these companies is the polar opposite of a Rube Goldberg.

I’ve worked in a business or two that have taken great steps to simplify business processes through employee training and the use of technology in an effort to reduce back office costs that keep company investments focusing on people and growing the platform. And I’ve worked in a business or two that seems compelled to use a Rube Goldberg machine mentality. I think that those who insist on making simple processes overly complicated could find greater success by streamlining operating procedures, but as long as shareholders are pleased with the return on investment, changes in operating styles aren’t likely to happen. In a highly competitive industry companies that are overcomplicated ultimately could be disadvantaged versus others in the same industry that have found ways to reduce the Rube Goldberg machine mentality.

Do you know of businesses in your industry which operate more like a Rube Goldberg machine (deliberately over-engineered or overdone to perform a very simple task)? I’m sure that you do. Noted management doyen Peter Drucker is quoted as saying:

“Only three things happen naturally in organizations: friction, confusion and underperformance. Everything else requires leadership.”

It has to be frustrating for people who work for companies that use complicated procedures or policies in an industry where other companies have found a simpler way of delivering the same service. I’m sure you can come up with some examples in your industry.

So, what’s it like at the company you’re working? Does your company operate more like an Apple, Amazon.com, Google, Berkshire Hathaway and Starbucks; or does it operate more like a Rube Goldberg? Imagine the potential for those companies that operate using a Rube Goldberg machine mentality that pivot to find a better way to provide the services or products they offer. If you look at your company and think you see an area of the business that might resemble a Rube Goldberg machine, perhaps you should seek ways to make it a little less complicated. Isn’t that what leadership is all about?

Just sayin’.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

1 Comment