Category: Management

Luxury vs Premium

Seth Godin has a nugget of a post in his blog about Luxury vs Premium. The post itself is small, and hence I am paraphrasing it here. All credit to Seth ofcourse.

Luxury goods are needlessly expensive. By needlessly, I mean that the price is not related to performance. The price is related to scarcity, brand and storytelling. Luxury goods are organized waste. They say, “I can afford to spend money without regard for intrinsic value.”

That doesn’t mean they are senseless expenditures. Sending a signal is valuable if that signal is important to you.

Premium goods, on the other hand, are expensive variants of commodity goods. Pay more, get more. Figure skates made from kangaroo hide, for example, are premium. The spectators don’t know what they’re made out of, but the some skaters get better performance. They’re happy to pay more because they believe they get more.

A $20,000 gown is not a premium product. It’s not better made, it won’t hold up longer, it’s not waterproof or foldable. It’s just artificially scarce. A custom-made suit, on the other hand, might be worth the money, especially if you’re Wilt Chamberlain.

Plenty of brands are in trouble right now because they’re not sure which one they represent.

[link to original article]

Anti-trust Intel ?

Intel has recently been slammed a huge fine by the European Union for monopolysing the market and filed anti-trust litigations against it. But, is this really wrong ? A company (say, such as Intel) establishes a good market, by being superior. The motto of capitalism is “May the fittest survive”. Intel was good, it survived, and AMD is getting better, and that is why coming up a second. No one else dared to get into that market, for fear of losing. Who asked them not to? Not Intel.

If Intel had done something (and the European courts had evidence) that, Intel went and killed competition by bribing the registrar of companies, (for example), to not accept their company registration, or if Intel went on a tarnishing advertising campaign against AMD, then you say that, it sounds unfair. Do note, I say ‘sounds’, and not ‘is’. What have your parents taught you? You should rise and shine, despite anything that your peers may say to discourage you. What did your cricket coach teach you about sledging. You, as a company, are supposed to weather all these roadblocks, if you want to succeed.

Do you think, Intel had a cushy road ahead to the place where it is. Intel had to convince human kind that desktop home PCs were real. At the time, when Intel came in the world, people only thought, they build room-sized computers to bomb the other side of the ocean. We have come a long from  there. Intel faced so many hard ships. It weathered several economic downturns. It captured emerging markets. It almost lost to AMD a few years ago, when their Itanium chips got delayed. AMD almost got over them. And then they recovered. Their reputation was severely hit, when the floating point bug hit them – which made some simple mistakes in arithmetic division. They weathered it. And now here, they are, chugging along.

I wonder what pseudo-socialist cause, this whole anti-trust game is serving. I now see a EETIMES article, saying, “Let us see how honest Intel is.” I wonder where honesty comes into the picture. If it is to see if Intel will go and haggle with lawyers and reduce the fine amount, in my opinion, that is not dishonesty either. That is good capitalist chops.

Go Intel! I (as an EDA engineer and Computer Engg PhD grad), have been proud of what you guys have been achieving. As a researc student, I followed your research. Now as a programmer/manager (and a part-time MBA student), I still follow your technological growth) ; and I will continue to do so.

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

Cisco’s curious week

HBR has a great article (I love HBR articles that get delivered to my email … small and crisp and full of information) on CISCO’s curious week – and how the giant has been playing around with Disruptive Innovation for quite some time. In a recent workshop I attended, I learnt that this is also called Paradigm Shift and it is well known that, paradigm shifts lead to leaders.

Cisco is not new to paradigm shifts. It originally started with usage of the Internet Protocol (IP). The giant has been making some pretty changes inside. Some of them as outlined in the article are:

Its purchase of linksys – an entry into the home router market. I think the Linksys routers are the best. I have one at home, and they are incredibly easy to configure.

Its purchase of WebEx seemed pretty logical to me. Networking giant + good conferencing company = Revenue.

It has also recently bought Pure Digital – which makes a popular line of flip handheld video cameras. (I have never heard of this one though!). But it is interesting to see the networking giant move into this market.

And ofcourse the biggest news of last week is CISCO trying to buy SUN, and enter the server market – directly getting face-to-face with IBM and HP and the likes.

But at a very high level, all this kinda makes sense to me.

(big router business) + (home routers) + (good video cameras for conferencing) + (good conferencing software) + (stable servers to handle the software) = Awesome $$.

The stable servers is probably a weak link in the above equation. But it is defenitely a good entry into a large revenue stream business. Here’s to CISCO, and lets hope they come out of this recession fine and dandy.

Note: I was in Silicon valley on a business visit in 2003, and going through some of the CISCO buildings near McCarthy Blvd/Tasman/Cisco way, and it was very disheartening to see some of the empty buildings (what was left of the DotComBust). But still CISCO lasted. And is surviving.

Did MBAs cause all the mess-up ?

The HBR editor’s blog has a small, crisp, and interesting write-up on the subject of the financial crisis, and who caused it? 

The one paragraph that impressed me:

But whether that’s true or not, they’ve certainly figured out that the MBA offers an attractive return on investment. That payback can happen in different ways. The low-risk option is to enroll in a relatively inexpensive program on a part-time basis (especially when tuition reimbursement is available from one’s employer). A higher risk, higher return option is to enroll in a top-ranked school, quit your job, move your family and pay maximum tuition for a chance to earn an elite degree. 

You see where I’m headed. The type of person who has the appetite for this second kind of risk-reward equation–plus the brains to excel in a rigorous academic setting–is the same type that Wall Street firms have been so eager to hire. 

And yes, sure enough, payback happened. Greed overflowed. And in the famous american lingo, sh** hit the fan!

Read the full article here.

Proximity Management

I just read an excellent article on “The real secret of thouroughly terrific companies”, by Peter Bregman. Bregman recounts and explains his terrific experiences in staying at the Four Seasons Hotel Chain. He sees what he calls “Proximity Management” being practiced. The managers know about their employees. There is a lot of trust within the different properties. There is open communication. There are monthly meetings, without any agenda, and the GM (Michael Newcombe) just engages in conversation. There are such meetings with all employee groups. 

Here is one anecdote, of how open communication solved a huge problem:

During his meeting with the front desk staff, he learned they were slower than usual in checking in guests because rooms weren’t available. Then, in his meeting with housekeeping staff, someone asked if the hotel was running low on king size sheets. Most CEOs wouldn’t be interested in that question, but Michael asked why. Well, the maid answered, it’s taking us longer to turn over rooms because we have to wait for the sheets. So he kept asking questions to different employee groups until he discovered that one of the dryers was broken and waiting for a custom part. That reduced the number of available sheets. Which slowed down housekeeping. Which reduced room availability. Which delayed guests from checking in.

Read the full article at The Harvard Business Blog here.

When payslips kill motivation

Shankar Vedantam over at Washington Post has a great article on how payslips and rewards actually intrinsic motivation, and often kills creativity.

It happens all the time: Two guys in a garage come up with a cool new technology — and dream of making it big. A thousand people take time off work to campaign for a visionary politician because they feel they are doing something to change the world. A million kids hit baseballs — and wonder what it would take to become a pro.

Then the brainiacs, volunteers and Little Leaguers grow up. What they did for fun becomes . . . work. Paychecks and bonuses become the reasons to do things. Pink slips and demotions become the reasons not to do other things.

Read the full article here.

[banner and excerpt courtesy: Washingtonpost]

Managing men

Now, I am not a male chauvinist, neither am I a feminist (last time I checked, I am still of the masculine species). But this really sent me rolling in laughter. The above snapshot is from the course listing of an executive MBA distance education program offered by the IICT, Lucknow. Is there something special about managing men ? Maybe frustrated wives can also take this course? How about managing women? Is that a specialization subject as well ? I cannot stop imagining all the possibilities ! ROFL.

The Wipro Story

EEtimes has a write up on the Wipro story. Very very well written. Talks about how it all started, and how it metamorphosed to what it is today. My favourite exerpt:

The government policy shift led Wipro to extend its expertise in designing printed-circuit boards to developing its own semiconductor blocks and ASICs, in order to address the needs of its new telecom and PC customers.

“ASICs were new to us, but we figured there was no magic to it,” said Valavi. “We put a group and tool flow together, started some basic designs for standard interfaces, and implemented them in such a way that people could put them in their chips, so we could license the blocks to others.”

Within 18 months, Wipro had USB and FireWire blocks it could license to other companies or use in its own ASICs. It has nearly 90 FireWire licensees today.

Read the full article here.