My wife and I wanted to get a motion detector in our backyard. We had a backlight on the house already. The house was a new construction. The motion detector would be additional security. We estimated the price to be under $200.
When the electrician arrived, he talked with us about our needs and did a thorough inspection of the home. He came back with an estimate of over $600. He rationalized this price due to the configuration of our home and the difficulty of wiring this fixture.
My wife and I both wanted this motion detector. However, we were unwilling to pay the price for this addition. Thus, we needed to redefined the problem. We wanted this motion detector as extra security for the home. We asked the electrician what it would cost to change out the light fixture. He mentioned less than $80. The motion detector was about $50. By redefining or refocusing the problem, we were able to carryout a better solution.
In search of more lucrative markets, today’s companies are looking for more opportunities across the globe. The United States is a land where dreams come true. Individuals from across the globe come to this country for possible opportunities. Yet, companies fail every day in the marketplace.
According to one study, the failure rate for new startups is about 46%. Botch understanding of your business competencies and market opportunities may put to be fatal. On the contrary, businesses that provide value to customers by solving their pressing problems are rewarded.
By solving someone’s challenging problems, individuals are compensated very well. Thus, solving ‘wicked problems’ could yield greater rewards. In this session, we will discuss the concepts of wicked problems and introduces how organizations can solve them with effective leaders who provide a burst of innovative thinking.
As companies continue to wage war with global competition and attempt to figure out their next steps due to advanced technologies, organizations are dealing with unpredictable change that is disruptive. In fact, disruptive change is impacting everyone in all walks of life, from Wall Street to entertainment. The casualties of disruptive change are evident.
In a statement to the Associated Press about joining a Silicon Valley boardroom, Serena Williams said, “I feel like diversity is something I speak to. Change is always happening. Change is always building. What is important to me is to be at the forefront of change and to make it easier for the next person.” we will examine disruptive change and what leaders can do to navigate the resulting uncertainties.
Disruptive change is wrecking traditional thinking of industries and institutions. Long-standing organizations have long attempted to maintain the status quo, allowing flagship institutions like Harvard University and Princeton lead the pack. Non-traditional institutions, like the University of Phoenix, were frowned upon by academics because it was a for-profit university growing by using non-traditional models like online learning.
Global affairs are often unstable. This month, Japanese stock market falters again, capping its worst single-week performance since the global financial crisis in 2008. Japan is not alone in its underperforming markets. Yet, globalization has connected countries through various elements. Financial markets are not an exception. This article explores issues of change in a global environment and discusses the merits of change agents in today’s organizations. Continue reading →
In life, sometimes it is the simple things that count, despite modern technology. In the next few months, I will be able to see 3-4 of my books published. Traditionally, it takes most large publishing houses 12-18 months before their books are published. As an independent publisher, I learned that the speed of products to the market place is a good way to beat a large competitor.
In fact, my success relates to a simple website called Elance.com, a freelance website that allow customers to solicit work from a variety of outsourcing services, which include programmers, designers, office support, translators, marketers, researchers and many other disciplines.
Elance.com allows a business to post a job opening and invites freelance workers who believe they have the requisite skills for the job to make a bid. The company charges a $10 fee to each business to post a job and also takes a small portion of what gets paid to contractors. Through this website, I have found some of the most talented individuals from across the world. For these services, it is a buyer’s market. Some people would argue that it is all about buying cheap labor for profitability.
In this scenario, developed countries appear to be exploiting underdeveloped countries. This is not always true. I have paid more in the past for the best talent. With that said, potential employers see a website that attracts over 500,000 talented freelancers. For the freelancer, there is an opportunity to bid on 48,000 jobs, worth $480K.[1] Therefore, a differentiating strategy can defeat a low-cost strategy on a global playing field.
Technology must be a management tool that is used strategically. Clayton Christensen, author of The Innovator’s Dilemma, provides a framework for understanding the interrelationship between technology changes and a business success. Christensen demonstrates how successful companies have been overtaken by small disruptive technologies.
The cell phone, undermining the profitability of the established communication networks such as AT&T, further showcases the impacts of disruptive technology. Sadly, more executives are unwilling to think strategically due to the wrath of their investors and financial pundits.
For example, Amazon’s revenue grew in 2012, but the details were lacking. Amazon.com’s revenue rose to 17.4 billion (35% increase) in the fourth quarter. However, it fell short of Wall Street predictions. According to VentureBeat, Amazon sold as many as 6 million Kindle Fires and its older tablet prototype.
Given this reality, the Fire would move ahead of Android tablets from Samsung and Motorola, making it only second to Apple’s iPad. Analysts were concerned that the $199 Fire would not make a profit. Additionally, Amazon.com is spending capital on clouding technology.
Maximizing profits on Fire as an industry leading tablet is a near-term strategy. However, CEO Jeff Bezos appears to have disappointed Wall Street with a long-term perspective instead of sacrificing shareholders with profits in the near term.
Innovators take note of disruptive change as positive turbulence in the market. John Gamble and Arthur Thompson, authors of Essentials of Strategic Management, explain, “Understanding the nature of competitively important resources allows managers to identify resources or capabilities that should be further developed to play an important role in the company’s future strategies.” Therefore, organizations which do not understand the importance of making sustainable growth by being more efficient will not be successful over the long-term.
Please discuss application of this topic in your organization and industry.
We can’t survive without technology. Are we too dependent on it? When the computer network is down in our office, it’s a pretty wasted day because we are paperless. Yet, you won’t find many modern organizations that can operate when their technology malfunctions.
This week we will focus on technology relevancy as part of the three practical applications (i.e. value modeling, technology relevancy, and human factor buy-in) in socio-technical systems.
Organizations must understand that technology needs to be relevant as it relates to benefiting the whole socio-technical system. Technology relates to the combination of skills and equipment that managers use in the design, production, and distribution of goods and services.[1]
Gareth Jones and Jennifer George, authors of Contemporary Management, argue the significance of technology forces on organizations: “Technological forces can have profound implications for managers and organizations. Technological change can make established products obsolete….” The graveyard of many businesses is littered with numerous failed opportunities of senior executives to understand market shifts and technology opportunities.
As an engineer myself, we are taught to use theory in order to build, design, and operate technical systems, whether mechanical, digital, or otherwise. Sometimes this creates a technical superiority over the other components of this socio-technical system.
Organizations should obtain input from employees to ensure that the organization has not only the best technology for its operations but the right technology.[2] This sharing of information can only come with mutual trust of leaders and followers. Gary Yukl, author of Leadership in Organizations, notes, “Empowerment is more feasible when there is a high level of mutual trust…Leaders can affect the psychological employment of followers in many ways, and participative leadership and delegation are only two of the relevant behaviors .”[3]
There have been numerous cases where organizations have purchased new technology to solve a problem or to become more efficient when a simple conversation with impacted employees would have produced better results at a lower cost. Therefore, organizations should invest their time in identifying the relevant technologies for their socio-technical system in a participatory manner.
Discuss the concept of technology relevancy for today’s organizations.
I received an email from Dr. Marcus Blakemore about a very fascinating website called Fiverr.com. At first, I was very skeptical because freelancers like technical writers and web designers were offering their services for $5. In fact, these services were listed well below market prices.
Yet, the site also offers bizarre services like someone writing something on his or her lips to a person dressed in a clown suit willing to send greetings to anyone. Loaded with my conventional wisdom of ‘you get what you pay for,’ I gave the website a chance. Through this effort, I found some vendors were outstanding while others were mediocre.
Amazingly, the owners of Fiverr.com had created a niche for themselves with freelance websites, such as Elance.com or Guru.com. However, a new value proposition was also developed.
For experienced sellers, Fiverr.com provides a promotional venue where they can sell more expensive services down the product line, newbie sellers can turn their hobbies into financial gains, and value-seeking buyers can secure some quality services well below market value.
With the pressures of globalization all around, organizations are finding that creating value becomes a necessity. This article examines the concepts of value creation in today’s competitive environment.
Twenty-first-century organizations can no longer implement value creation in a vacuum. Ken Favaro, author of Put Value Creation First, further suggests that placing a priority on value creation gives businesses two advantages over their competition: The first is capital and the second is talent. Favaro argues that successful value creators never suffer from capital shortage.
Value focuses on the relationship between the customer’s expectations of a product or service and the amount paid for it. C.K. Prahalad and Vemkatram Ramaswamy, authors of The Future of Competition, further reasoned that twenty-first-century corporations must adapt their value creation system to fit the global scale.
They noted the new system is an individual-centered, co-creation of worth between consumers and organizations. Few executives take the time to explain their values, but this will be increasingly important if companies hope to expand success in their global market.
For many people, the concept of value creation is vague. An exact definition of value depends on the individual, but it could be defined as the net bundle of benefits the customer derives from a product or service.
According to Businessdictionary.com, value creation denotes ‘the performance of actions that increase the worth of goods, service or even a business.’ Consequently, value creation for customers encompasses developing products and services that customers find consistently useful.
Mark Johnston and Greg Marshall, authors of Relationship Selling, argue that an individual must understand the customer to establish value. Furthermore, Paul Peter and James Donnelly, authors of Marketing Management, argue that the starting point in the buying process is the consumer’s recognition of an unsatisfied need. The customer must remain the focus for any sustainable business success.
Value creation must also be a strategic and deliberate concept for professionals. Mark Johnston and Greg Marshall maintain that perceived value is in the eyes of the customer. Therefore, perceived value will vary. A professional’s biggest challenge is in selling this value with consistency. Being strategic about these business relationships is not simple. Organizations must clearly understand the external motivation within their market in order to create lasting customer value. The external environment is considered anything outside of the organization’s control. External environment factors include economic stability, legal-political shifts, technological growth, social-cultural norms, and natural changes.
With businesses losing market sharing to companies abroad, organizations must establish clear value propositions to their customers. Paul O’ Malley, the principal of Paul O’Malley Associates (Newton, MA), argues the crucial need of value creation for companies: “The most successful organizations understand that the purpose of any business is to create value for customers, employees, and investors, and that the interests of these three groups are inextricably linked. Therefore, sustainable value cannot be created for one group unless it is created for all of them.”
Furthermore, today’s professionals always need to provide value for their employers and customers. In tough times, organizations want to keep their best people. In order to sustain lasting success, value creation must be an important ingredient of corporate business strategies during economic turbulence.
Describe an opportunity or problem in an industry where a new product or service would be benefical to customers because it would provide new value for them.
The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.
Here’s an excerpt:
4,329 films were submitted to the 2012 Cannes Film Festival. This blog had 19,000 views in 2012. If each view were a film, this blog would power 4 Film Festivals
Reiko Farr & Noriko Chapman pose for new Japanese book.
There is nothing more flattering to a professor than a student taking his academic advice and being successful. This situation played out for me with one of my own MBA students this year. However, this week she took it to a different level.
For Noriko Chapman, it has created an international collaboration between a local U.S. nonprofit organization and a global leader in the automobile industry which led to the empowerment and economic independence of disabled workers.
Chapman, who is a DENSO production manager, had worked with the Tennessee Rehabilitation Center (TRC) in Maryville to help increase its operations efficiency as part of her MBA project. In 2009, the Maryville TRC was ranked at eighth in contract sales in Tennessee.
Its mission is to provide services that help lead individuals who have a physical and/or mental disability to employment and are designed to meet individual needs.
However, Chapman’s goodwill had many unintended consequences. She has had four versions of her first book published in one year, which is impressive for a beginning writer. She pledged 30 percent of the book proceeds to this organization. Chapman also helped to restore $75K of government funding to the Center. Chapman became connected to this organization. She observed, “I was inspired by the staff and by individuals with disabilities who were trying very hard to learn work skills and seek permanent employment.”
Through her first book, she was able to bring more attention by the media and the public in general to this disability cause. In fact, it landed the TRC’s director an expense-paid visit to DENSO in Japan.
DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier with customers that include all the world’s major carmakers. With more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan), DENSO had worked to assist the nonprofit organization with a contract that allowed disabled workers to earn income. In reality, DENSO was offering these workers a second chance. Chapman had made this relationship possible.
For the month of December (2011), Chapman is on an international book tour in Japan with her new Japanese version of her book. She hopes her new book and tour will help women in Japan too: “Japan is a male-dominated society. Even though the culture is gradually adopting to accommodate female workforce, the career advancement for women in Japan is still limited. The changes are not quick enough to satisfy thousands of bright, hard-working Japanese women.”
Chapman hopes to other corporations and organizations follow in DENSO’s footsteps and help provide second chances to those who need it around the world.
When I arrived at Southern University A&M, I looked forward to my new engineering journey. I had envisioned myself being like Scotty on Star Trek, providing Captain Kirk with life-saving innovative solutions for any galactic jam. However, I was quickly awakened to the systematic and predictable sides of engineering.
In fact, faculty advisors would frown upon us deviating from the engineering catalog to take business or non-traditional courses. Sadly, it wasn’t until my senior year that I was allowed to use creativity. Yet, this reality was not out of the norm for most engineering schools.
Today, U.S. engineers are fighting to maintain dominance as engineering tasks are now being outsourced to countries all over the world. In fact, America is increasingly losing its pioneering edge because it lacks the human capital resources necessary for success.
Several key factors illuminate the downturn of America’s competitiveness across the globe: (1) several key agencies for U.S. scientific research and development will face a retirement crisis in the near future; (2) less than 6% of high school seniors are pursuing engineering degrees, down 36% from a decade ago; (3) the number of China’s undergraduate degrees in the hard sciences were 56% compared to 17% for the United States in 2000; and (4) in the next several years, China will likely produce six times the number of engineers as the United States.
Currently, there is a national loss of between 40% and 60% of undergraduates from science, mathematics, and engineering majors into non-science disciplines. Traditionally, engineering schools have taught engineers to build their skills in a linear fashion over time. Sometimes organizations can be too rigid in their organizational design; they lose their mission.
Therefore, the consequences of overly emphasizing structure can be dangerous. Universities cannot afford the same old strategies. An environment needs to be created where these working parts can co-exist in an information era.
Today’s engineering organizations, including academic institutions, must instill students and employees with innovation and creativity for a competitive advantage. Twenty-first century engineering and science departments must address the needs of students as they relate to globalization and future opportunities in an international market. In 2004, the United States graduated roughly 70,000 undergraduate engineers while other countries such as China (600,000) and India (350,000) are graduating far more engineers.
Creativity can provide this economic weapon. Creativity is defined as the “generation of novel ideas that may be converted into opportunities.” Gareth Morgan, author of Imagination, argues that empowering people in organizations stimulates imagination and innovation. James Gibson, John Ivancevich, James Donnelly, and Robert Konopaske, authors of Organizations: Behavior, Structure, and Processes, suggest that organizations can foster creativity in the following ways: (a) managers can look for ways to absorb the risks of creative decisions made by their employees; (b) organizations can give people time off to work on a problem and allow them to think through them; (c) managers can give half-baked or unsophisticated ideas a chance; (d) organizations can encourage everyone to think of ways to solve problems; and (e) organizations can let employees see and interact with many managers and mentors. New strategies like these need to be utilized to turn today’s engineering organizations into global innovators.
Describe how traditional organizations such as engineering organizations can infuse creativity into their organization and how to sustain these activities.
As I listened to the radio, I couldn’t believe the amount of grid lock in the Washington, D.C. area. Would both parties be so petty as to bring the nation to the brink of credit default?
There were many people depending on government official to survive. I turned the radio station to catch Dave Ramsey, national radio personality, go into a passionate appeal for Americans to take responsibility for their own lives and quit depending on the government. It sparked my attention. Yet, what Dave Ramsey suggested was no easy matter. How does an individual turn their ideas into a profitable venue?
Making money isn’t easy! People look for magical equations such as productivity equals outputs divided by inputs. Decrease your inputs and you can expand your outputs. Many businesses build their profitability on this simple equation.
Companies seek to reduce their inputs (outsourcing labor, better technologies) to obtain ‘more get.’ Yet, it’s pretty self-serving with little regard to the customer (places less value on employees too). Over the years, I have seen experts suggest that making millions is really easy if you have the right method.
Loral Langemeier, author of the Millionaire Maker, has created her own version of a Wealth Cycle Process. She notes, “You can make the decision to make a lot of money at any age and in any stage of your life….No matter who and where you are, wealth building is well within your grasp. You just need to step up to the plate.” Some of these processes may work. Yet, most are only ‘get-rich-quick’ schemes that leave people broken-hearted and empty pocketed!
Today’s profitability must be built on solving customer’s problems that have a financial value to them. What’s value? It depends on the individual. Value is defined as the net bundle of benefits the customer derives from a product or service. Value creation can be defined as an organization’s ability to convey the worth of its product or service to customers. Therefore, it goes to value, which focuses on the relationship between the customer’s expectations of the quality of a product/service quality to the actual amount paid for it.
Mark Johnston and Greg Marshall, authors of Relationship Selling, argue that understanding customer needs should be the primary objective for profitable businesses. Therefore, understanding the customer is the center point for creating value.
What has been your experience in turning ideas and concepts into profitable ventures?
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